The fight over collecting online sales tax is especially heated this holiday season, as Internet retail sales hit new records—and taxes go uncollected.
A 1992 Supreme Court ruling stated that no out-of-state business could be required to collect sales tax in a state where it does not have a physical presence. There are multiple lawsuits as states fight for the right to collect. Online retailers, like eBay , Amazon and Overstock , stand on the other side.
In July, the New York Supreme Court dismissed Amazon's claim that it was unconstitutionally required to pay sales tax even though the company doesn't have a physical presence in the state. According to research by the Center for Business and Economics at the University of Tennessee, New York could have collected $654.9 million in online sales tax revenue. The state currently has a $1 billion budget shortfall. Amazon filed an appeal earlier this month. December.