Diverging high court rulings in New York and Illinois over 'Amazon taxes' point to a possible U.S. Supreme Court case to settle questions about the legality of states taxing online retail sales, lawyers said on Monday.
With Congress failing to take action on the issue, courts have been intervening case-by-case in a long-running struggle between state governments and major online retailers, including Amazon.com Inc, over sales tax.
On Friday, the Illinois Supreme Court voided a state law attempting to collect sales taxes from online purchases. A trade group representing Amazon and other online businesses had challenged the state's online sales tax in court.
In New York, though, the state's high court decided earlier this year that Amazon and Overstock.com Inc. could be compelled by the state to collect tax from online sales. Amazon and Overstock have appealed to the U.S. Supreme Court. New York has until Wednesday to file its response.
(Read more: Illinois throws out 'Amazon tax')