Filed under: Business, News, Web services, web 2.0
Newegg says 'No' to NY sales tax law
At the beginning of the summer, a new sales tax law went into effect in New York State, requiring online retailers who have some sort of presence in the state (like shipping centers or affiliate programs) to charge sales tax on any item shipped to New York residents. Big e-tailers like Amazon.com and Newegg complied with the new law, although Amazon is still suing the state of New York, claiming the tax law is unconstitutional.Today, Newegg, a favorite shop amongst Download Squad's staff, has decided to stop collecting those taxes. According to PC Magazine, Newegg wrote an e-mail to customers, explaining, "After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax, effective August 21, 2008."
Although Newegg will no longer be charging sales tax on orders shipped to New York, New York residents may still be required to pay sales tax for those purchases (usually when filing annual income tax statements). Much of the rationale for the tax bill in the first place, as I understand it, was to force businesses to do what residents were not doing: paying sales tax on online goods ordered from out-of-state.
It will be interesting to see if Newegg's decision has any trickle-down effect on any other shops that are currently complying with the law. Although I can't see Amazon following suite -- that could potentially harm its legal case -- perhaps retailers like Overstock.com, which temporarily suspended affiliate-agreements with New York residents as a way of avoiding the tax issue, will re-evaluate the situation.
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Reader Comments (Page 1 of 1)
michas_pi said 6:24PM on 8-22-2008
This is why I fucking love Newegg, even if I do live in Ohio.
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Christina Warren said 6:26PM on 8-22-2008
Totally!
rodan32 said 6:31PM on 8-22-2008
This will last until we get a filibuster-proof Democratic majority in the Senate. Then anyone who cares about taxation is hosed.
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Virtuous said 2:27AM on 8-23-2008
Tax Increase = Properity
Tax Cuts = Recession
Bufsabre said 6:48PM on 8-22-2008
seriously, i hated reading that email, not for content, i love the content, but on the 20th i orderd parts to a new system and spent 40$ in taxes, i which i could get some of that back, maybe a free shipping code or something =)
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Christina Warren said 6:50PM on 8-22-2008
D'oh! And knowing Newegg, they already had your order shipped before you got the new message.
Bufsabre said 4:47AM on 8-23-2008
as a followup, i contacted newegg and they offered me 10$ worth of credits on my next purchase, if you had this happen to you maybe it would be worth it to send them off a complaint letter, its not a full refund but they could of just told me to shove it so 10$ is better than nothing, i do love newegg
Eric said 6:50PM on 8-22-2008
New York residents are also supposed to pay the difference between another state's sales tax and their own, if they travel out of state.
If the state expects people to do that, they should return all the taxes they collect from tourists in New York, Niagara Falls, and every other tourist attraction in between.
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bradwjensen said 8:59PM on 8-22-2008
I'm sick of these Unconstitutional taxes, like the Federal Income Tax. There is no law which requires us to pay the Federal Income Tax.. www.liefreezone.com
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Virtuous said 2:28AM on 8-23-2008
Jail Freeloaders!
Bufsabre said 4:51AM on 8-23-2008
so you dont recognize the 16th amendment?
Sixteenth Amendment (1913): Authorizes unapportioned federal taxes on income.
http://en.wikipedia.org/wiki/Sixteenth_Amendment_to_the_United_States_Constitution
THJ said 10:12PM on 8-23-2008
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
Although if you'd rather believe a web site that claims to have THE TRUTH about the 16th amendment, I have some Postal money orders I'd like to send you. Just cash them and send me half the money. Not a lie, it's THE TRUTH.
Anon said 12:08AM on 8-23-2008
New York is asking businesses to collect taxes for them. That in effect makes the businesses "tax collectors", and they should receive a salary from the State of New York. Whenever I'm asked to do someones work I expect compensation.
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cub3 said 1:02AM on 8-23-2008
I really dont care, im in Jersey and ive been taxes since i first ordered at Newegg. =/,
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Michael said 8:14AM on 8-23-2008
Go Newegg!
Go Amazon!
Beat Bloodsucker U.!
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Scott said 11:38AM on 8-23-2008
I carefully read the email I received from New Egg, and the articles I've seen on several sites, but nowhere have I seen anything describing why they believe they can get away with this. The email states: "After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax..." and "This decision was driven by your direct and candid feedback..." What does this mean? Are they simply taking a stand against the state of NY & waiting to see what happens, or did they dump their NY affiliates in order to circumvent the new law (a la Overstock.com), or did their lawyers find what they believe to be a loophole...?
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Bufsabre said 10:59PM on 8-23-2008
they have no ny affiliates. they can get away with this because theres no way to enforce interstate commerce from a singular state perspective. thats a federal job.
ken said 11:12AM on 8-25-2008
did you know california had to pay sales tax on online purchases!?!??
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Racetrack_Owner said 7:13PM on 9-18-2008
I work for a NY-based company, and those liberal greedhounds have been trying to collect partial income tax from their non-NY employees for several years now.
By my calculations I owe the state of New York something like $58,000 in income tax -- and I haven't lived there since I was about 4 years old, and haven't physically been there in more than 20 years.
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