Amazon.com Inc.’s (NASDAQ:AMZN) request that the U.S. Supreme Court weigh in New York’s state tax law regarding online retailers has been rejected, as the Supreme Court has decided not to tamper with a law requiring online retailers to collect sales tax from customers in the state even if the company has no physical operations there, according to a report from Bloomberg.
In September, Amazon decided to petition the Supreme Court to rule on a 2008 New York state tax law. Amazon believes that the requirement that online retailers pay sales tax even if the company doesn’t have physical operations in the state is unconstitutional. According to Bloomberg, that law and similar ones have been dubbed “the Amazon laws” because they only apply to large online retailers.
Amazon isn’t against the idea of paying sales tax at all — it already does in several states and has lobbied for the Marketplace Fairness Act, which will require all online retailers to collect sales tax in every state — just New York’s law in particular. New York’s policy on the matter was one of the first created in the face of the rise in online retail. The law requires retailers with affiliates in the state to pay sales tax, not retailers with physical operations in the state, which means that e-commerce sites can easily get around the law by authorizing their affiliates.