Today is “Cyber Monday” and millions of Americans are purchasing holiday gifts online. This would have been the perfect day for the U.S. Supreme Court to give consumers a reason for seasonal cheer. Unfortunately, it seems the Justices are not in the holiday spirit. The Court announced today that it would not hear an important case dealing with the taxation of Internet purchases. This means that New York and a handful of other states can continue to tax retail transactions by utilizing a constitutionally dubious law.
The case, filed by Overstock.com and Amazon, was a challenge to a New York State law that allows the state government to tax transactions even if the retailer does not have a physical presence in New York. National Taxpayers Union and the Tax Foundation filed an amicus brief in September encouraging the Supreme Court to hear the case and overturn the law because it undermines the important physical nexus standard established by the Quill v. North Dakota case of 1992. This standard protects individuals and businesses from money-grubbing out-of-state tax collectors. With today’s decision by the Supreme Court, we should expect more states to pass similar laws to tax and harass consumers and businesses in other states.
For more information on the Internet sales tax, click here.