Earlier this year, New York State passed a law which potentially forces non-New York State internet retailers to collect and remit New York State sales tax if the retailer’s marketing affiliates engage in certain marketing activities targeted at New York residents.
In response to this law, on June 1, 2008 Newegg.com (“Newegg”) began collecting sales tax on its sales to New York State residents.
Since then, New York State tax authorities have issued additional guidance as to the circumstances in which internet retailers would be required to collect sales tax. Based on this guidance, Newegg has restructured its affiliate marketing program in an effort to ensure that Newegg is not presumed under New York State law to have to collect sales tax.
What this means to our New York State customers is that, effective 12:00 a.m. Eastern Time on August 21, 2008, Newegg will no longer charge sales tax on its sales to you. However, please be aware that you may still have an obligation to pay New York use tax on your purchases. (Use taxes are not charged or collected by Newegg but are paid directly by purchasers to the appropriate taxing authority.) Newegg cannot offer you any tax advice, so if you have any questions about whether you have to pay use tax, please consult an appropriate tax professional.
Disclaimer: Nothing in this email shall be deemed an admission that Newegg has ever been legally required to collect and remit New York State sales tax on its sales to residents of that state. Newegg continues to challenge the validity of section 1101(b) (8) (vi) of the New York State Tax Law.
Newegg stop collecting sales tax: Additional Details [Schiffner]
PREVIOUSLY: Hooray! Newegg Stops Collecting New York Sales Tax
(Photo: Matt & The Camera)
In reality, I think Newegg will start getting a lot of affiliates that have PO Boxes in neighboring states where this law doesn't exist and affiliates will keep at it.
]]>Amazon is actually going to the root issue and is, along with other retailers, taking the state of New York to court. It sucks people are left in the interim; it does more to solve the long-term problem.
More information:
]]>Amazon needs to copy this ASAP!
]]>avoidance of Use tax is easy for the state to detect.
I get audited by my State every 18 months and all my major out of state sales are recorded by the auditor. MY State is allowed to share with your State and does actively share the information with YOUR State.
Is the State going to chase down a book with $0.90 in Use Tax or the $900 Use Tax owed on a new Rolex? Wave enough $ and the State will come running to fill their belly.
]]>Maine also.
]]>@varro: That is what Jersey is to NY for clothing! Since I work in Jersey, I do most of my clothes shopping there. (I also have my Amazon orders sent to my job!)
]]>When I lived in Florida, they had no income tax, so no returns. You were supposed to submit use tax payments MONTHLY! I have to admit that I didn't do this, and I never knew anyone who did.
What scares me about use taxes, if you were ever audited, it would be trivial for the auditor to look up your credit card bills for online retailers and stick you for fraud. But in Flordia, I don't know if anyone ever gets audited.
(I'm going to be unpopular for saying this) But it's within a state's rights to collect tax on this stuff. It's a lot more convenient to pay it at the time of sale rather than keep records and document it on the tax return.
If you don't like being charged use tax (and nobody does), take it up with your legislators. Or you can do like I did. I moved to Oregon! No sales tax, no use tax!
]]>@varro: Use taxes are and end run-around for sales tax. In WA State for example if you run a paving company, and that company paves your home driveway for you, you are obligated to pay a "Use Tax" on any materials consumed during the construction. Technically it is a completly different taxation than sales tax, here it just happens to be the exact same amount as sales tax. This is also applied to good purchased from outside the sales tax jurisdiction.
Essentially it boils down to if it is a consumer product, and you are the end consumer, and you didn't pay sales tax, then you owe use tax on it. I remember this being a big deal in WA when Gates purchased the Codex Leicester (then the Codex Hammer). He asked the state if they would wave the use tax on his 30.8 million dollar purchase if he put it on public display. The state refused, Gates paid, but the REAL hullabaloo came from other high-end art collectors who were pisswed at Gates for making the Use tax current information, and that the state might now try to collect on.
]]>I think NewEgg does have to charge CA tax because they're located here; even with that they have great prices.
]]>dragonfire81: Why this happens is really simple. All companies have to pay taxes on income after expenses. There is no getting around this. What companies do is to pay dividends to its shareholders, or salaries to its employees, or to invest in itself for research and development, or buy hardware, software, or any other of dozens/hundreds of different classifications of expenses. Sure, Verizon TAKES IN a bazillion dollars per year, but they SPEND that same bazillion (in salaries or buying things, or pensions or 401k or whatever) so that the effective amounts left in the bank (just as you balance your checkbook) at the end of the fiscal year is zero dollars.
]]>Most U.S. companies avoid paying taxes anyway, why should Newegg be any different.
]]>of course i'm ignoring the fact that quitting would cost me $0.00... but thats another story
]]>@Ihaveasmartpuppy: I buy something from out of state to give as a gift. Perhaps the gift recipient would be required to pay the use tax.
]]>@Git Em SteveDave displays attention-grabbing vanity: I think it would be awesome to somehow itemize enough porn to get a tax refund.
I'll buy someone a beer if they do it next year.
Too many warehouses in New Jersey; most online retailers are going to have a distribution center in New Jersey giving them a physical presence in the state.
]]>Gotta love Newegg. Lack of sales tax is the reason that Delaware is just going to be one long strip mall in a few years.
]]>Yeah, elder abuse isn't a topic we hear much about on Consumerist.
]]>@nicemarmot617: Is she single?
]]>Yes. Every state in the union with a sales tax also has a "use tax" on items that were purchased without paying state sales tax.
But you're responsible for declaring use tax on your personal tax return- an out of state retailer doesn't need to collect and remit a use tax.
]]>I always giggle at the section on my tax forms that asked if I "purchased anything out of state or on-line" and I say "no"
]]>Just more proof that newegg is the shizzle fo rizzle.. SnoopBlizzle, you here my nizzle!?
]]>This is what NH is to MA residents!
]]>(Was just at the Jantzen Beach/Hayden Meadows Big Box area, where Washington residents go over the Oregon border to avoid their state sales tax.)
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