NewEgg Tells NY Tax Collectors To Take A Hike
from the take-that dept
Earlier this year, we wrote about how NY state had passed a highly questionable law designed to force e-commerce retailers to collect sales tax in the state. As you hopefully know, retailers are only supposed to collect sales tax in states where they have a physical presence. The reasoning for this is pretty straightforward. The taxes are designed to help provide core infrastructure services for those retailers (roads, water, etc.). Without a physical presence in the state, the retailers aren't making use of those services, so it doesn't seem right to tax them for it. The NY state law was sneaky in that it changed the definition needed to establish a "physical presence" to include anyone who acted as an affiliate of the retailer. Most e-commerce sites have affiliate programs that allow others to get a kickback on sales for driving those sales. Affiliates are effectively advertisers, driving traffic to an e-commerce site. It's quite a stretch to suggest they represent a physical presence for the company. But, NY politicians did it because they wanted to get more cash out of Amazon.Different online retailers have reacted in different ways. Both Amazon and Overstock sued over the law -- and Overstock even banned NY affiliates while this law is in place. Online tech retailer NewEgg started collecting the tax, but has changed its mind. It sent a letter to customers saying that it's decided not to collect the tax. There isn't much more of an explanation, but it sounds like it's asking New York to sue it if it wants to get the tax at all:
As a result of recent changes in New York State tax law requiring certain out-of-state retailers to collect and remit sales taxes to the State of New York, we began collecting applicable sales tax for all orders shipped to New York addresses starting June 1, 2008.Your move, New York.
After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax, effective August 21, 2008. This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers.
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Filed Under: affiliates, new york, taxes
Companies: newegg
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Best PR EVAR!
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Re: Best PR EVAR!
The NY tax situation is ridiculous and what's more, they made the decision based on "direct and candid feedback". I've always liked NewEgg too, and now they are made of win.
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Cuomo is gonna smear them . . .
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Will they then refund the tax?
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Re: Will they then refund the tax?
Good question though, any details on this?
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Re: Will they then refund the tax?
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Re: Will they then refund the tax?
This raises the question of what are they doing with the tax already collected? I was seeking a refund of about $150 for purchases made within the timeframe that newegg was being 'compliant' with the Nazi tax law. I was basically told to stick it.
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Re: Will they then refund the tax?
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Good Move
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It's sick how the Government thinks they MUST tax everything, give us a damn break.
If they keep gettin' flak - there's a fix... move out of NY
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If she were elected president she would be in the forefront of applying this kind of stupid logic to all commerce in the US.
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Says the great oracle of delphi . . . what baseless tales of the future will his all seeing eye reveal for us next . . .
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Senators from New york state don't make laws for new yourk state, they represent new york state in making federal laws.
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Thank you commerce clause.
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This is about getting more money from small groups (business) to hand out to larger groups of people in exchange for votes.
In any other industry, politicians and their voters would be jailed for consipracy and conflict of interest.
There, I said it. Deal with it!
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Sales Tax
Technically it was the purchasers responsibility to submit the sales tax for any purchases made from out of state vendors. The state passed that lay because it is easier for them to go after major shippers than it is for them to go after every citizen for tax evasion.
When the state eventually does go after these guys they will use this as their defense. If the state so chooses they can ask for a list of customers shipped to and go after everyone of them for tax evassion...
So for those of you raving over their decission, hope that they don't provoke the state too much...
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Re: Sales Tax
Want to see what happens when thousands of customers are hit simultaneously for tax evasion?
The response won't be small, and you will see government back down.
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Re: Sales Tax
Hiring staff and lawyers to do this would negate any possible gains.
Let's say the typical NewEgg customer spends $2,000 in a year. At 6%, that's $120. Hardly enough to pay for the hacks hired to chase them. It's probably safe to assume that most customers don't spend $2,000, so the amount they'd collect probably wouldn't even pay for the certified letters they'd have to spend.
This is what happens in a state dominated by Democrats. They want to tax the hell out of every one and anything. It's like that here in Mass under our Obama-lite governor, Duval Patrick and the overwhelmingly Democrat house and senate.
If you don't like Republicans, fine, but if you want higher taxes, keep the Dems in power.
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What we need is a Democrat in the White House to ensure that the corporate tax loopholes get closed and our economy gets back on track. The billions that ExxonMobile should've been paying would do a lot more good than the tax on my Newegg purchases.
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FYI It is the Congressmen and Senators that write TAX Code not the President. They may consider what any given President would like to have as code - but in the end every one of the some 400 representatives controlled by the Lobby's that control them dictates Tax Law - I IRS only follows what is written in the Tax Law. Oh, about Exxon/Mobile - no one every cared about the years they did not make a profit - Just like Stocks, Real Estate, Medical and Prescriptions, Fed and State Taxes and Cabbage Patch Kids - all get their golden ring on the merry-go-round of life - stabbing the consumer. Time for another Boston Tea Party.
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FYI It is the Congressmen and Senators that write TAX Code not the President. They may consider what any given President would like to have as code - but in the end every one of the some 400 representatives controlled by the Lobby's that control them dictates Tax Law - I IRS only follows what is written in the Tax Law. "
How does a bill become law? I am pretty sure the legislative branch cant do it alone . . . LOL? The President MUST SIGN THE BILL INTO LAW and he has the power of VETO.
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Your getting desperate now . . . when was the last time congress over turned a veto (when was the last time a tax bill was vetoed . . . LMAO?) . . . yeah this should take a while hehe. You can let cowardly executives shirk the very repsonsiblity they asked you to give them and attempt to "pass the buck" on tax laws, spending or anything else if you like, but NO BILL BECOMES LAW in this country without thier WRITTEN APROVAL (in the form of a signature).
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- And you are the reason stuff keeps getting stirred up, by automatic jumping to a conclussion not supported by the evidence presented but by saying if "Obama-like" is negative its a racial thing...not a policy thing
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No it doesn't. It just means it's a watered down version of Obama. Like Miller Lite.
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Or my personal favorite, McCain is Bush Lite and no one likes the taste of that stuff LOL . . .
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I.e. judged by the content of their character, not by the color of their skin.
And no, this isn't a comment on the applicability to them, or the validity of, "tax and spend."
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It's not a matter of going after everyone, it's a matter of going after a few and setting huge examples...
Would you like to be one of the unlucky ones?
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Hey wasnt Mitt Romney once the gov of your state? I guess Mass didnt have any taxes back then . . . ohh wait, yeah it did? I dont understand, hes a repubilcan and you seem to think only democrats tax citizens (republicans just borrow to support thier big government plans)? Ohh nevermind, I am sure someone else put him up to it, a libral legislature maybe or evil lepricons or whatever . . .
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The end result is the same. Also, I fail to see how doing your part to support the country you love through taxes is considered being "cheated" . . . .
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Republications tax us as well, famous word from Bush Sr. No new Taxes became a lie. But the kicker is Repubs want to tax the middle class and give breaks to the rich. Dems want to tax the rich and give breaks to the middle class.
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Erm...
Despite the fact that the current state of affairs is problematic, eventually there will a normal ecommerce sales tax even in the US, just like in all other developed countries.
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Re: Erm...
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Controlling consumption? Like if we didn't have sales tax, our economy would be overwhelmed by rampant consumption? I wonder how the states with no sales tax deal with this.
IMO your claim makes about as much sense if you interpret it to mean that sales tax revenues go to the fight against tuberculosis.
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The claim that sales tax is used to control consumption is perfectly valid, there is really no question about it? The more you tax something, the less people will willingly use it. This has always been true and is one of the central doctrines on which our entire tax system is based. From subsidizing mortgages to discouraging smoking, the government uses the tax system to control consumption and behavior (as much as it is possible to do so). Just to be clear, I make no argument for or against this practice, I am simply stating that what he said is absolutely true and to some extent completely obvious.
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Re: Erm...
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So, there for the countries that do not tax internet sales is more developed from an Economics/Free system stand point than those that do.
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Something Not mentioned
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Re: JC
That logic is exactly what makes me want to go postal. You can't lose something you never had to begin with. Politicians would find a way to send every dime everyone makes, it's just that @ a 100% tax rate, no one would work.
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Huh?
Not from Newegg, they're not. I purchase from Newegg because the stuff I buy there isn't available at any store, anywhere. Believe me, I've looked as I'd rather physically look at something before I buy it.
Now that CompUSuckA is out of business, online retailers are about the only place left to buy computer parts. Best Buy is a joke, and they cost 2x as much for the trivial amount of parts they do carry.
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I know I had several hundred dollars worth of taxes collected by newegg during the last month and a half, I'd be surprised if any of this money actually gets turned into the state.
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+1 Newegg
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NewEgg
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Sales Tax
My $.02 dammit
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Well
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NewEgg
They have also always been awesome with any needed returns.
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No they are not, They were bought buy another great online merchant "TigerDirect"
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No they are not, They were bought by another great online merchant "TigerDirect" I have used them for years and never had any problems, I use "Newegg" also for the same reasons.
http://www.compusa.com/
http://www.tigerdirect.com/
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Tiger really is awesome. I'm a long time supporter of them. Another one is Pricewatch. Lots of deals on OEM/white-box products there.
http://www.PriceWatch.com
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Sales Tax always paid by Seller
Sale prices are only determined by Supply & Demand. If businesses could so easily shift a new sales tax to buyers in the form of higher prices --they would long ago have raised their prices, earning easy extra profit.
It's fundamentally illegal for state politicians to impose a sales-tax if the point-of-sale is outside their legal jurisdiction; though they often do so anyway
The out-of state sellers don't get to even vote in the taxing state {'Taxation without Representation'}... and do not benefit from the "local services" supposedly paid for by the sales-tax.
For internet sales, if the seller is physically located outside a given American state/municipality... then the seller is not under the legal jurisdiction of that government entity -- and can NOT be taxed. The point-of-sale is outside the legal tax district.
An internet point-of-sale is where the 'sale transaction' is actually conducted/recorded... normally at the seller's own computer servers -- if they are physically out-of state... they are not taxable. Interstate telephone/catalog sales worked that 'tax-exempt' way for many decades -- until politicians got greedy and ignored the "Commerce Clause" in the U.S. Constitution.
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Republicans don’t pay their bills, everyone knows that (ask anyone who ever loaned Tom Delay money). It's the party of vacuous talk (I mean how long have they been "pro life" LMAO yeah right – how stupid are those people anyway?), its totally symbolism over substance. Wear American flag pins, but don’t actually raise enough in taxes to provide soldiers with Kevlar vests or properly armored vehicles, waste millions interfering in a most personal and private family matter to save Teri Shivo from her loving husband and last wishes but god don’t try to actually fix the healthcare system. They rail on endlessly about the evil “homosexual agenda” (which I suspect has something to do with the GAP) then hire a homosexual prostitute to pretend to be a reporter and throw softball questions to the president (not to mention the endless “Craig” scandals on the right – ohh it’s the Gay Ole Party alright), on and on and on it goes. The truth is though, both parties are big government, big spenders, it’s just that the democrats are more honest . . . that’s really the only difference.
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