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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."
Thats what we NY'ers are. Newegg is now back on the top of my to purchase list.
Could someone explain, isn't it required by (most) states' laws that individuals pay sales tax on goods purchased? I mean, people like "neglecting" to pay it, because it's easy to avoid, but ideally doesn't the New York law just shift the burden from the taxpayer at tax time to the retailer at time of purchase?
I guess what I'm asking is: is this whole problem arising from the retailers' desire not to be burdened with the logistics of collecting tax, and the consumers' desire to evade the tax? Or is there something else I'm missing here?
If I had a nickel for every time I had a nickel, I'd be richcursive!
Interesting to see that part of the article summary is a direct copy and paste from theregister.co.uk and not a link back to the original article?
"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."
New York estimates that the provision will generate $50 million in revenue for the state in the fiscal year. Tax experts look to other cash-strapped states to adopt similar measures if the New York law holds up in court.
Boy, I wish I could raise $50 million without providing any additional benefits to anyone. Is there anyway to donate to Amazon/Newegg's legal defense team? : )
-Grey
Silver Clipboard: Time Management Tips
"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.
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Late Night Radio for Geeks!
[quote]Overstock.com dropped all of its New York affiliates[/quote]
This measure was supposed to boost local businesses and lower unemployment. Do you think if Amazon and NewEgg drop theirs, the $50m in revenue will be paid out in unemployment?
I am disgusted by the government of my state. I moved from PA to NY for a better job, but literally everything is higher taxed and more expensive. The taxes don't make any sense either. I live near Rochester, NY. Depending on the locality you're in, you can pay 6% (Henrietta) to 10% (Greece) taxes on a variety of things but if you send a letter it's all Rochester, NY. And then there is the paper store, I mean government agencies. Everything needs a permit, paper, registration or a tax. You can't get a single piece of paper without paying at least $10 for it.
Custom electronics and digital signage for your business: www.evcircuits.com
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
* Winners compare their achievements to their goals, losers compare theirs to that of others.
After careful review and consideration, we are pleased to inform you that I have decided to stop paying my Federal and State tax, effective August 27, 2008.
This decision was driven by your direct and candid feedback and our continued commitment to you as our valued collection agency.
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.
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.
This is my sig.
http://forum.abestweb.com/showthread.php?t=108986
"A few months ago, New York State made changes to its tax law which potentially require out-of-state internet retailers to collect and remit sales taxes to New York State.
Since then, New York State has issused a memorandum indicating that an internet retailer would be presumed not to need to collect New York sales tax as long as: (1) its contracts with its New York-based affiliates prohibit the affiliates from engaging in solicitation activities which refer New York customers to the retailer, and (2) the New York-based affiliates sign an annual statement confirming that they have not solicited New York customers for the retailer. ..."
Your rates in Wisconsin is just the half of it...
Towns in AR are incorporated around county land. The town has 1% added to already 5% making 6% - FOR THE TOWN LAND. Post Office makes these two lands appear as 1 so the only choice is charging the 6% for the county land. Military Bases and Parks also fall into these traps.
Washington state has MTA the follow the boundaries elementary school districts. Again you do not know for a given address if it is in or out school district.
Mobile AL has MTA so EVERY postal code two rates.
Texas has multiple rates that can add up to 3% over the state rate, but they are added in order so that if the full rate can be used (ie going over 3% total) then it skipped and you add the next rate.
Memphis Area has sales tax rate ONLY for the first $2500 then it drops to 0.
In most states Sales Tax is charged at the point of consumption (ie Where is the Cash Register). But that can also mean "Where is the customer's mailbox" since the goods are being delievered to customer, no consumption occurred until delivery. Texas just changed theirs back to be where the business is located, to help delivery companies (like flower) from having to figure out all the local tax rates.
Even the large tax rate companies are not being of help. They need a system that does Address Correction and Tax Rate following geo-boundaries.
Its not called the Empire state for nothing!
As a NewEgg customer and a New Yorker, I'm glad they finally quit playing along with our rogue Attorney General.
This is the same attorney general that convinced major ISPs to block access to newsgroups because they might be used to transmit child pornography.
I can't wait until he's up for election, personally.
I live in upstate NY as well and I see the tremendous issues NY has with attracting good paying jobs. NY is unable to attract new business' therefore they look to supplement their revenue by taxing the business' they can't attract here even if said business has no physical presence in the state. NY government has this view that they are entitled to a piece of the action. They are not. If they can't attract the business here they lose and should lose. The NY government is what is getting in the way of business' coming into NY and entrepreneurs starting new business'. I'm afraid you will see more of what Overstock did and thus hurt the NY economy even more. We in NY have politicians completely out of touch with the reality of the business world.
I find it amazing that when a government raises taxes they think the rich will pay it. The rich will just raise the cost of the goods they are selling accordingly in most cases.
sort of...
I do know that if you buy a car in a state with a sales tax of, say 3%. And move to NY a year or so later. They're going to want the difference (4%) when you go to register your car. So when you think your registration's going to cost $100* and it ends up costing $1000, it's a bit of a shock.
*Not sure what a registration costs these days. I've been living in Europe for the past 6 years. w00t!
Oz
...
Hasn't Reganomics been pretty firmly debunked by now?
Reaganomics has been adopted world wide and as such has produced the largest wave of economic expansion, on the planet, in human history. There's two problems with the USA right now. One is short term and the other long. The short term problem is admittedly part of some fiscal stupidity by President Bush, but the long term problem is by fiscal stupidity of liberals.
The long term and fundamental economic problem faced by most governments is that they have exploding costs for entitlements. In the USA this is social security and medicare and medicaid and the various state programs that compliment them. The liberal mistake here, is that they built these entitlements based on the idea that the population would rapidly expand, which is fine because everything worked when the population was expanding. But, then, liberals started passing out birth control and embarked on a program of women's rights, which is a good thing for women, for sure... but, its just, if you don't have a bigger generation coming in, you can't afford to spend lavishly on the previous one.
That's really our problem. We can choose between a lavish entitlements system, or women's rights, but we can't fiscally afford to pick both. To put it another way, if it costs $500 a day to put grammy in a nursing home for a month to get over a flu, then, you know, a single child simply cannot afford that at all... and, even if you did try and plug the gap by taxing the wealthy at exhorbitant rates, all you'd have is a country in total economic free fall because there would be nothing left to invest in the current generation or its children.
Extremely high taxes for the rich also aren't going to prevent them from getting wealthier. Sure, it makes them grumble, but even if you take a whopping 50% off of a $2 million paycheck, you're still left with a hell of a lot of dough
So basically, what you are saying is, that someone who works through college, grad school, works extra hours and gets ahead, or starts a business, now, has to carry the people that just smoked pot in high school and graduated through social promotion. Boy, that's not right. Why not cut some of the slackers on the bottom end loose?
The thing is too, is that, you have this notion that most people like this get a "paycheck". The paycheck they get is related to an investment and that investment has a return. If the return is really low, they aren't even going to bother. To put it another way, if someone has to spend 1.95 million to get the 2 million paycheck, and you just took have that paycheck, you've just killed the investment side and the jobs that went with it.
On the other hand, if your tax cuts for the wealthy really do cause them to spend considerably more, this could in turn induce a wave of inflation, which would absolutely devastate the middle and lower classes.
Actually, in this country, tax cuts for everyone has lead to an increase in the manufacturing capacity of the United States. Right now, USA exports are -higher- than they have ever been.
This is my sig.
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.
I do not think that word means what you think it means. In the context of taxes, it's not a meaningless epithet; the sales tax is not progressive, it is flat
Actually the sales tax is regressive.. but that's another story. I was really thinking more about how income taxes tend to be shifted to the rich. What happens now is that, because the taxes are stacked so much on the wealthy, the revenue stream for the government is wildly unstable.
The thing is, about Republican politics, is that, they haven't honestly told the whole story about how taxation is supposed to work. Really, to get the lowest overall rate, everyone has to pay -some- taxes. But what's happened over the years is that this has been translated into the idea of tax cuts and for the wealthy to get tax cuts, thus, the middle class has to get them, and right now, poor people aren't paying any taxes at all.
If you really wanted to maximize both the size and the stability of the tax stream against all other goals - in other words, without being "nice about it", you should probably have a federal sales tax to tax the poor and criminal classes and enough of one to also be an effective tax increase on the middle class, and then lower the tax rates on the rich so that effectively, everyone is paying the same overall rate. That minimizes the risk to the tax collection portfolio.. oh christ, there I go using that "revenue" term that i just flamed about, by spreading it to the most people.
Then, if taxes are too high for people, then you cut them, but you also have to decide what out of government you don't want. Realistically, at the federal level, this is going to mean BOTH a capping of the entitlements AND a cut to the size of the defense budget.
In the face of that, when you look at the candidates, you can see that both are pretty much retarded. Obama wants to raise taxes on the rich and then tease with a middle class tax cut and take the poor off the roles altogether, completely destabalizing the payment stream. McCain wants to lock in Bush's taxes, which is ok, but he also needs to think about a national sales tax, to hit the poor with. Both sides need to chop spending. In Obama's case, that means saying by by to his big social programs, and in McCain's case, it means that the army shouldn't get Future Combat System and the Navy might need just build more normal ships, and the air force might need to choose one kind of fighter rather than two.
This is my sig.
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.
--
make install -not war
"I know, there are evil rich people who pay 35% and you pay 28% but its not fair they still have more dollars. What has this country come to if we are so filled with spite and envy that we begrudge anyone doing better than us or set limits on how well any one person is allowed to do?"
I guess you're right. I'd be happy to get back to the good old days of the USA, when "the greatest generation" had a top tax bracket of 70%-94% all the way from 1936 to 1981.
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_progressivity_in_federal_income_tax
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes