The court refused on Monday to hear an appeal from Capital One Bank and Geoffrey, Inc., a subsidiary of Toys R Us that licenses the company's giraffe logo and other trademarks.

Massachusetts tax officials say both companies make money in-state, and therefore should pay state taxes. The companies say that the Commerce Clause of the Constitution prohibits state officials from taxing out-of-state companies that do not have a physical presence in that state.

States normally are not allowed to tax out-of-state corporations who do not have a physical presence in those states. Massachusetts's top court ruled, however, that it could tax out-of-state corporations if they have a "substantial nexus" in a state.

CapitalOne banks are based out of Virginia, but offers credit cards that are used by people in Massachusetts and uses collection agencies in that state to go after delinquent accounts. Geoffrey, Inc., licenses the use of Toys R Us trademarks for its stores in Massachusetts.

The cases are Geoffrey, Inc., v. Commissioner of Revenue, 08-1207 and CapitalOne Bank v. Commissioner of Revenue, 08-1169.