Declining to review a state law on reporting internet sales taxes, the U.S. Supreme Court said nothing about internet taxation itself. But it was close, and perhaps a lucky break for internet businesses in the United States.
The High Court denied a petition to review Colorado's reporting law, which the Tenth Circuit Court of Appeals upheld against a legal challenge earlier this year. The Tenth Circuit said the state law, which requires out-of-state internet retailers to report tax liabilities for its Colorado customers, was constitutional. In its petition to the U.S. Supreme Court, the Data and Marketing Association said the state law discriminated against internet businesses that have only a virtual connection to Colorado
Although the petitioners' lost their battle to overturn the law last week, internet businesses are still winning the war against internet sales taxes in the meantime. The law does not require businesses to collect sales taxes in states where they have no physical presence.