New York Court Rules Online Vendors Must Collect Sales Taxes

Will case make it to Supreme Court?

New York state's highest court today ruled that out-of-state online retailers must charge state tax on New York State customers. Now it gets interesting since the 4-1 judgment by the New York State Court of Appeals makes it all the more likely that the question will get an airing, sooner rather than later, in front of the U.S. Supreme Court.

Along with New York, eight other states have similar laws on the books ending the hidden tax break people got when buying products from companies on the Internet. Those statutes require the states in question to collect sales tax from out-of-state retailers when they had branch offices or affiliates, even when they didn't have a physical state presence.