The recent California appellate court ruling that Borders must pay state sales tax for goods sold online to California residents does not change the interstate sales tax landscape, according to the Direct Marketing Association, DM News writes. The California court held that Borders' California stores, through their various actions, acted as agents for Borders.com, which must therefore collect tax for the state. Others have said that the ruling might signal the advent of taxation by states of online transactions.

Online and catalog businesses aren't required to collect and remit sales tax to states where they have no physical presence, according to a 1992 U.S. Supreme Court ruling, Quill v. North Dakota. Quill held that collecting and remitting sales taxes on behalf of the 7,600 state and local taxing jurisdictions nationwide would be too burdensome on businesses.

"If a company is prepared to keep its internet operations truly distinct from its brick-and-mortar stores, this [California] ruling shouldn't affect it. The rules have not changed, in our opinion. Quill is still as much the law of the land after the [Borders] decision as it was before the decision," said Mark Micali, vice-president of government affairs at the DMA in Washington.