Supreme Court won't stop NY's Internet taxation

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On perhaps the busiest online shopping day of the year, the Supreme Court refused to wade into a dispute over state sales taxes for purchases on websites like Amazon.com, an outcome likely to prompt more states to attempt to collect taxes on Internet sales.

Monday's court action means "it might be the last Cyber Monday without sales tax," said Joseph Henchman of the Washington -based Tax Foundation.

It's all part of a furious battle -- also including legislation in Congress -- among Internet sellers, millions of buyers, aggrieved brick-and-mortar stores and states hungry for billions of dollars in extra tax revenue.

The high court without comment turned away appeals from Amazon.com LLC and Overstock.com Inc. in their fight against a New York court decision forcing them to remit sales tax the same way in-state businesses do. This could hurt online shopping in that state, since one of the attractions of Internet purchasing is the lack of a state sales tax, which makes some items a little cheaper than they would be inside a store on the corner.

And the effect could be felt far beyond New York if it encourages other states to act. The National Council of State Legislatures estimates that states lost an estimated $23.3 billion in 2012 as a result of being unable to collect sales tax on online and catalog purchases.

The court's refusal "allows states that have passed laws like New York's to continue doing what they've been doing," said Neal Osten, director of the Council's Washington office.

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