Newegg Defies New York Sales Tax Law

JagsLive informs us that the electronics retailer Newegg.com is defying New York lawmakers; it has suddenly stopped collecting sales tax from New York online shoppers. The "Amazon tax," which went into effect June 1, requires online merchants to collect sales tax if they have any affiliates in the state. Amazon is complying but has sued the state on constitutional grounds. Overstock.com dropped all of its New York affiliates and then joined the Amazon lawsuit. Newegg started out complying with the law on June 1, but stopped collecting taxes for New York on August 21. From Newegg's letter to its customers: "After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax, effective August 21, 2008," reads an email the company tossed at customers late last week, including at least one loyal Reg reader. "This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers."

Comments

"This decision was driven by your feedback."

[Schezar]

"This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers."

This is obviously just a publicity statement. There is no way in the world a large corporation would assume the massive risk of defying a law like this on the advice of its customers. Something else precipitated this.

Most likely, the law department in the company examined the law, and then the risk management division (or whoever it is: I have no idea how Newegg is managed) decided that the risk was worth taking. PR, seeing an opportunity for, well, PR, made up a fluff statement about how the dear customers were the reason.

Not that I'm complaining.

It is like every other tax.

[Shivetya]

If consumers, for that matter income earners, had a true understanding of their tax load they would be up in arms. It is one thing to ask for this, that, and the other thing, from your government when you don't know the cost.

So governments do what they do best, they hide the tax. What is the number way to hide the real tax from the taxpayer? Embed it. This means hide it in the cost of goods and services. Lets use an oil company like Exxon for fun, after all its accused of having WINFALL profits. In 2006, Exxon's EBT (earnings before tax) was $67.4 billion, it paid $27.9 billion in taxes (41.4% tax rate), and its NIAT (net income after tax), or profit, was $39.5 billion. So, where does that 27.9 BILLION dollars come from. The taxpayer. Exxon merely wrote the check for all the dollars it collected from you and me to pay it.

The politicians win on every front here, they can hide the true cost of the tax load on the American worker and vilify any corporation that makes big numbers as being against the poor, downtrodden, hungry, or my favorite "children".

Ignorance and envy are the two greatest weapons the politicians employ and from watching the current elections it really pays off

Re:Use tax = sales tax and you are supposed to pay

[pla]

With a mandated sales tax, it means YOU don't have to keep records for paying end-of-year taxes.

No, it means we can't ignore use taxes as an unconstitutional violation of interstate commerce. Pay if you want, but few do - And suggesting we make it "painless" by having the merchants handle the tax completely misses (and actually hides) the point that we shouldn't pay such taxes in the first place.



End this moronic madness now

And there, we agree (in word if not in spirit) - Let's entirely do away with the single most regressive taxes we have. Personally, I think we should also do away with "withholding" as well, and make everyone actually cough up $10-30k every April 15th - Watch how fast we get serious tax reform when people realize how much they actually pay, rather than merely bitching about it as a mostly-meaningless "rate" they don't really feel thanks to the government slowly boiling the frog.

Any tax revolt is a good one.

[tjstork]

How ironic it is, that, we hear a bunch of liberals bitching about those terrible people on Wall Street, in New York, and it turns out those terrible people on Wall Street took such a beating that the state is looking at a nearly billion dollar tax short fall. Thus, in New York we learn the ultimately failing of progressive taxation, just as we have learned nationally. If the rich do not make any money, the government is screwed.

I'm sick of hearing everyone try and talk about increasing taxes as "providing revenue". It's an insult to compare the activities of government to the activities of the private sector. Government is basically a collection of pie in the sky power mongers that use the power of the gun, cops directed by the legislature, to impose their financial will on people. By contrast, all a private company do is offer a good or a service in return, and thus they are compelled to offer something back.

New York, in particular, is disgusting. They have a tax policy that reflects decades of liberal orthodoxy and the stupidity of the results just staggers the mind. I mean, they raise taxes on cigarettes, and are suddenly horrified to find that people do not buy cigarettes in New York. Now, what do you think the enlightened liberals do up there? Do you think they set the tax at a more reasonable level? No... they call out the cops and pass even -more- laws designed to try and ban people from cigarettes from out of state.

Now, of course, they reach out and are suing, again, with the barrel of the legislative gun, trying to sue someone outside of the state, like a crab or a cancer spreading and grasping desperately for any piece of loot that it can steal.... and they call this revenue.

Re:I'll admit, I'm a bit confused

[wellingj]

Good thing all the mega corporations don't think it's fair either... They will end up fighting it instead of individual citizens.

Correction To the Email

[ghetto2ivy]

Correction : After careful consideration of how much how much our sales have dropped since the Amazon Tax, we have decided to stop collecting NYS taxes.

Welfare States

[Doc Ruby]

Actually, the "lazies" you're talking about are the "Red States", which all get more money back from the Federal government than they send it in Federal taxes. The "Blue States" like New York pay to prop up those Welfare States by sending more taxes to DC than we get back.

There are a few notable exceptions. New Mexico is the poorest state, with the most tribal population, and lots of large Federal military bases and labs, so its welfare goes mainly to big Federal contractors who don't spread it around the state much. Hawaii is another state with a lot of poor people, many of them tribal, and lots of large Federal military bases. Maine gets a little more than it pays, but again is overall pretty poor. Texas, that "Republican Paradise", is taxed and feeladen every which way, in a giant ripoff, getting just a little less than it pays. Florida is right near the breakeven, but at least it's paying to prop up a system it was #1 in ushering in with its 2000 election. New Hampshire somehow gets screwed, too.

But other than that, the other 44 states all demonstrate that voting Democratic does get you taxed to redistribute your wealth to the rest of the country - even when the redistributors are a Republican controlled Federal government. The list also demonstrates the myth that "the West is independent": other than NM and TX, all those Western states are subsidized by the rest of the country, as they have been since they were colonized.

That list represents the most valuable wealth redistribution programme ever undertaken. Run by Republicans, at the peak of their power. Even as those Republicans cut Federal taxes while running up the Federal expenses, both in record amounts. But evidently spreading the benefits along more or less strict Party lines.

Re:Welfare States

[Anonymous Coward]

Although it was poorly put, he does have a point. Cities naturally operate more efficiently, so while each citizen can afford to pay more taxes, they don't need as much taxes to operate. Some things the federal government pays for, like the highway system, are more keyed to land area than population. Places that are more sparsely populated will most likely get more money than they give.

Likewise, the Red/Blue State probability is linked to population density: people starting families tend to move to places of low population density, and they are highly correlated with voting Republican.

Now, is it a good thing that some states are supporting others? Ideally, every state would be equally efficient, but realistically they are not; no one is going to build a Manhattan in the Rockies. But could the more efficient states still benefit from subsidizing the less efficient ones? Ostensibly yes. For example: Minnesota and Washington both "pull their weight", but none of the states connecting them do. Still, the two benefit from having federally funded rail lines and highways between them, along with police, an educated populace, a number of national parks, etc.

All that said, "bridges to nowhere" greatly annoy me.

Re:I'll admit, I'm a bit confused

[Chaos Incarnate]

Are you taxing the sale, or are you taxing the use?

If you're taxing the sale, then you're interfering with interstate commerce.

If you're taxing the use, then you're discriminating in favor of goods sold in state, because they aren't being taxed for use as well.