This Could Be the Last Tax-Free Cyber Monday

Get it while the getting's good, ye online shoppers: This could be the last Cyber Monday without an internet sales tax. In a blow to the online retail giants, the Supreme Court ruled today that it would not consider Amazon and Overstock's case against having to charge a sales tax for customers in the state of New York. It's a crucial decision in the ongoing internet-tax debate, and one that is bound to have ripple effects for the e-commerce industry as other US states follow suit.

Hungry for a new stream of tax revenue, states will likely be quick to follow in the footsteps of the nation’s financial capital. The US lost an estimated $23.3 billion last year as a result of foregoing sales tax on online purchases, according to the National Council of State Legislatures. Already an increasing number of states have legislation requiring online purchases include a sales tax; Amazon says it charges sales tax on 16 states including California (where eBay is based), Washington (where Amazon is based), Arizona, Massachusetts, New Jersey, Pennsylvania, and Texas.

The debate goes like this. One side—state governments—argues it's an unfair advantage for online stores not to charge a sales tax when brick-and-mortar shops do. The other side—the internet companies—argues there's no legal basis for mandating a sales tax if the company doesn't have a physical presence within state borders. Along with the internet companies, free-market advocates say a sales tax won't boost revenue; it will just decrease sales and even put small, local retailers out of business.

The non-ruling by the nation's highest court means the New York Court of Appeals decision that requires online sales tax will stand. It found that "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,” the Associated Press reported. “These affiliates range from one-person blogs promoting the latest gadgets to companies that run coupon and deal sites."

Still, Amazon and Overstock aren't giving up the fight, now turning to Congress to lobby for federal legislation to circumvent internet tax.

The whole issue could be moot, eventually, if Amazon's publicity stunt decision announced yesterday to launch a program for same-day drone deliveries comes to pass, because the company would mostly likely have to set up several warehouses in states across the country to deploy the robotic postmen.

However, a lot of hurdles must cleared before that futurist scenario becomes reality. Specifically, the retail giant will have to wait for Federal Aviation Administration regulations that legislate the use of UAVs in US airspace, set to hit in late 2015. So if not next year, maybe the one after that, Cyber Monday could look noticeably different than years past. Now maybe it’s time to give the "holiday" a better name.