Internet Sales Tax

The US Supreme Court on the Cyber Monday (December 2, 2013) handed a raw deal to online retailers as it refused to hear a case that was filed by Amazon.com LLC and Overstock.com Inc. to appeal New York's state legislation to collect the state tax from online retailers. At the heart of the case is the business model that brick-and-mortars are at a competitive disadvantage with respect to online retailers who don't have any physical presence in the state, and how one defines the physical presence of an online retailer. New York passed a law in 2008 that would require collection of sales tax if any online retailer would have affiliate program such as an one-person blogs promoting the latest gadgets to companies that run coupon and deal sites. Amazon sued New York although it started to collect the sales tax in New York, while Overstock stopped its affiliate program. Amazon currently collects sales tax in 16 states, where it has warehouses and other forms of presence.

Separately, since 2008, Amazon and Texas fought over collecting the sales tax until they resolved their case in early 2012, and the internet retailer began to collect sales tax in Texas in June 2012. Prior to settlement, Amazon closed its Irving facility after Texas Comptroller Susan Combs estimated that the internet retailer owed $269 million in back due from local sales taxes from 2004 through 2009. After the early 2012 settlement with Texas, Amazon opened three fulfillment centers in Texas: Coppell, Haslet and Schertz.