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The Boston Globe

Business

Justices decline to stop state from taxing online purchases

WASHINGTON — On perhaps the busiest online shopping day of the year, the Supreme Court refused to wade into a dispute over state sales taxes for purchases on such websites as Amazon.com, an outcome likely to prompt more states to attempt to collect taxes on Internet sales.

Monday’s court action means ‘‘it might be the last Cyber Monday without sales tax,’’ said Joseph Henchman of the Washington-based Tax Foundation.

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It’s all part of a furious battle — also including legislation in Congress — among Internet sellers, millions of buyers, aggrieved brick-and-mortar stores, and states hungry for billions of dollars in extra tax revenue.

The high court without comment turned away appeals from Amazon.com LLC and Overstock.com Inc. in their fight against a New York court decision forcing them to remit sales tax the same way in-state businesses do. This could hurt online shopping in that state, since one of the attractions of Internet purchasing is the lack of a state sales tax, which makes some items a little cheaper than they would be inside a store on the corner.

And the effect could be felt far beyond New York if it encourages other states to act. The National Council of State Legislatures estimates that states lost an estimated $23.3 billion in 2012 as a result of being unable to collect sales tax on online and catalog purchases.

The court’s refusal ‘‘allows states that have passed laws like New York’s to continue doing what they’ve been doing,’’ said Neal Osten, director of the Council’s Washington office.

In Massachusetts, retailers with a physical presence in the state are required to charge sales tax on all sales, including online purchases. In November, Amazon began charging sales tax in Massachusetts under an agreement with the state that cited the retailer’s office in Cambridge and technology firm in North Reading.

The Supreme Court’s decision came down on Cyber Monday, expected to be the busiest day of the year for online shopping. Huge numbers of consumers head online on the first working day after the long Thanksgiving weekend in search of deals. Overall, Internet shopping has become more popular, with the National Retail Federation predicting more than 131 million people would shop online on Monday, up about 2 percent from last year.

Web retailers generally have not had to charge sales taxes in states where they lack a physical presence. But New York and other states say that a retailer has a physical presence when it uses affiliates — people and businesses that refer customers to the retailer’s website and collect a commission on sales. These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites.

Amazon and Overstock both use affiliate programs. Amazon has been collecting sales tax in New York, even as it fights the state over its 2008 law, which was the first to consider local affiliates enough of a presence to require sales tax collection. Overstock ended its affiliate program in New York after the law passed.

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