Hooray! Newegg Stops Collecting New York Sales Tax

Reader Duke has forwarded us an email he got from Newegg explaining that as of yesterday they are no longer collecting New York state taxes. Hooray! Of course, you still have to pay your sales tax… but now it’s your responsibility.

Dear Valued Newegg Customer,
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.

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.

We appreciate your patience as we worked through this process, and would like to reiterate our commitment in offering our customers the broadest product selection, competitive pricing, fastest shipping, and award-winning customer service.

We look forward to continuing to provide you with the premier online shopping experience for all of your IT and consumer electronics needs.

Sincerely,

Bernard Luthi
Newegg.com
Company Spokesperson and
Vice President of Merchandising

Disclaimer: While Newegg no longer charges sales tax to its New York customers effective August 21, 2008, you may still have an obligation to pay New York State use tax on your purchases. Newegg cannot offer you any tax advice, so please refer to applicable law if you have any questions about use tax. Nothing in this email shall be deemed to approve the validity of any New York State law, including but not limited to section 1101(b)(8)(vi) of the New York State Tax Law, which purports to require Newegg to collect and remit New York State sales tax on its sales to residents of that state.

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  1. Hogan1 says:

    Newegg = Best company ever.

  2. Skybolt says:

    Newegg is great, but I don’t understand why this is good. If by law the tax has to be collected, aren’t they just shifting the problem onto the purchaser? If I have to have sales tax added on, I think I’d rather have Newegg do it up front than have to worry about it later.

  3. madanthony says:

    Wonder how they pulled this off. I know the NY law was based on the claim that if online stores had affiliates in NY, it counted as having a presence and they had to collect.

    I wonder if Newegg dropped all it’s New York affiliates, like Overstock did.

  4. phripley says:

    Anyone have any insight here?

    Does this mean they dumped their NY affiliates to avoid the NY nexus (as I believe Overstock did)?

    Or have they decided to fight it? If they fight and lose it could be very bad for New Egg.

    I hope that whatever New Egg did to escape this Amazon will be able to do as well.

  5. Diet-Orange-Soda says:

    This is kind of funny actually. You say “of course, you still have to pay your sales tax… but now it’s your responsibility” but the only reason people would get excited over this is because they’ll be happily “overlooking” last year’s Newegg purchases when tax cat comes knocking again.

  6. nicemarmot617 says:

    Sweet. I hate living in New York. You pay more taxes than anyone else in the country but since I live in the city we never see a penny of that tax money. Albany is a black hole into which money goes and NYC never sees again and DC ain’t much better. I believe the NY state government owes the NYC schools something like 2 billion dollars.

  7. dieselman8 says:

    @nicemarmot617:
    Actually, Chicagoans pay the most taxes–10.25% sales tax.

  8. Shadowfire says:

    @nicemarmot617: NYC still gets a bigger cut than the rest of the state, though.

  9. Mistrez_Mish says:

    I <3 Newegg! Looks like I’m buying a new computer today after all :D

  10. RandyReader says:
  11. nicemarmot617 says:

    @Shadowfire: Uh, I certainly hope so, considering that 70% of the state’s population lives in the NYC area! As far as I am concerned the rest of the state can live off their own damn tax revenues and leave the city’s to the city! It’s bad enough that the state doesn’t even really allow the city to govern itself. Whenever the city tries to change ANYTHING it has to get state approval – down to selling city property. And of course, the NY state legislature is evil and absurdly corrupt. This is just another game for them to get more cash for their own pockets and pork projects and I cheer any effort to screw them. Go Newegg!! Go Amazon lawsuit!

    @dieselman8: Seriously? When did that happen? I used to live in Chicago.

  12. Mistrez_Mish says:

    @Shadowfire: I used to teach art classes, K – 5, downtown in 2 nyc public schools (buying my own supplies ftw!). :(

    NYC got hit with some nasty school budget cuts not all that long ago. If we do get a little more than the rest of NY, we’re certainly not feeling it and it’s because of two words: population density.

  13. mayrc87 says:

    hooray!! Now Amazon has to stop charging taxes for NY too.

  14. schiff says:

    @nicemarmot617, I have lived in both Rochester, NY (western nys) and in NYC. Albany does not have money for anyone. The school budgets are never large enough, there is little or no tax relief for the elderly. Its a mess. Not to mention the budget never passes on time. Unfortunately what NYS needs is a total house cleanin which I fear may never trully happen.

  15. dieselman8 says:

    @nicemarmot617:
    It happened back in March of this year.

  16. Adisharr says:

    I’m so glad NY is getting screwed over this. We’re taxed enough here.

  17. zibby says:

    Now look…I know Albany is a mess, but we’ve got this new guy Spitzer as governor. If he cleans up New York State like he cleaned up Wall Street, we’ve got nothing to worry about.

  18. battra92 says:

    @nicemarmot617: Dude, what are you talking about? Have you ever been to upstate? They aren’t exactly sitting pretty. Take a trip to say, Brunswick or Buskirk or Greenwich or Fort Edward and understand it’s one big state.

    I will give your governor some credit though. He’s the first Democrat I can remember saying that we need to cut government spending and reduce social services.

  19. Admiral_John says:

    Sure, now that I ordered about $400 worth of hardware from them last week. :(

  20. EbolaVipers says:

    Did you steal this story from this blog . Man for someone you banned you sure love to take content off their own blog!

  21. schiff says:

    @zibby, You do realise that Spitzer resigned from his office after a scandal involving a prostitute right?

  22. cclarke4 says:

    @zibby: ummm–didn’t you hear? Spitzer is not our gov anymore. The jury’s still out on Patterson…

  23. nicemarmot617 says:

    @battra92: Oh I understand that upper New York State is in terrible shape. I just don’t see why I have to give them my money when the place I actually live is completely falling apart, infrastructure-wise. Does it seem wrong that the tax money I pay should pay for tax-funded items in my city? Or at least my general area? I guess it’s the state legislature who’s really the problem. Give them money and they’ll throw it away, not give it to anyone who needs it. I guess NYC should just secede…

    Paterson seems like a decent dude and he is certainly right that they need to cut spending. Even if I really love making blind governor jokes way too much now.

  24. schiff says:

    @cclarke4, The jury actually returned when he pardoned Slick Rick as his first official act as gov.

  25. Ein2015 says:

    I have spent THOUSANDS of dollars at Newegg… they’re one of my favorite places ever.

    However, they are almost like mini-TSA nazis when it comes to fraud prevention. Example below:

    I once placed an order, and it got rejected because my card sometimes likes to pretend that Newegg purchases are possibly fraudulent. I called the card company, told them to let any Newegg purchases go through, and they asked if I placed an order for $xxxx.xx and I said yes. Done deal? NO!

    Newegg tries again and then THEY reject my order by saying that my mailing address and billing address were not the same and the mailing address wasn’t a “verified address” on the card. Well, I tried their online chat help (which are always useless, it seems), and told them that they can call the card company if they need to check against fraud, because I called them myself and explicitly told them to let the order go through. They said the same spiel again about “verified address” on the card is required, yadi yadi, even though it IN NO WAY prevents fraud after I’ve already talked to the credit card company directly.

    Bah.

    It delayed my precious order by a few days, then causing the 3-day shipment to land on a Saturday, which meant I got it Monday. *le sigh*

  26. spazztastic says:

    @nicemarmot617: I believe the ‘Albany must approve’ rule came into being shortly afte President Ford told the city we could ‘Drop Dead’. It’s also when the law was passed requiring a balanced (or 0 deficit) city budget.

  27. zaq2g says:

    @nicemarmot617: Yeah, Chicago has the 10.25% sales tax, Orland Park, IL has 9.75% and the rest of Crook County has 9%. Glad I live close to Dupage County.

  28. LionelEHutz says:

    @nicemarmot617: Interesting, when the State bailed out NYC in the 70’s you didn’t hear all of the whining and complaining about Albany back then.

  29. LionelEHutz says:

    @zibby: FYI – Spitzer isn’t governor anymore, it’s David Patterson.

  30. Carl3000 says:

    “you may still have an obligation to pay New York State use tax on your purchases”

    Ha. I’d like to see what it would cost the state to round up thousands of nickel-and-dime purchases just to collect their $0.78 or whatever in sales tax from each person.

  31. ragold says:

    All over, the Northeast is pretty corrupt. It’s not just municipal and state governments but unions and individuals and businesses and court systems. A large majority of the people I know in New York get paid under the table. It just seems to go with the territory.

  32. nicemarmot617 says:

    @LionelEHutz: Uh, what? Admittedly I was not yet born in the 70’s but my understanding was that the state didn’t offer much help. According to Wikipedia and this Times article:
    [query.nytimes.com]
    it was the unions that bailed out the city. Not Albany.

    Not that there’s any excuse for the way the city was run back then. Or any excuse for the way it’s run today. But still, Albany is worse.

  33. poopmasta says:

    nobody got zibby’s attempt at sarcasm.

  34. Skybolt says:

    Well, after reading the comments up to now, I understand why people say this is good. But personally, my reaction to a company making it easier for its customers to break the law would not be “Hooray!” It’s more like, “How is that legal to begin with?”

    Anyway, taxes in New York State are not too high. They are malapportioned. People without pay too much, and people with pay too little. I live outside of Buffalo. It has certainly seen better days. But a lot of areas are way worse off.

    I miss Spitzer. At least he knew who the enemy was. If I wanted the governor to slash funding for services and make nice with the Republicans, I would have saved time by just voting for the Republican.

  35. ragold says:

    @poopmasta: This is a more serious crowd than Gawker… and therefore a little more susceptible to sarcasm and trolling.

  36. schiff says:

    @poopmasta, Now that i know it was supposed to be sarcastic I get it – Funny!

    *afraid to have too much fun*

  37. RevRagnarok says:

    The end legalese sounds like they are saying they don’t believe the law is valid (my highlight): “Nothing in this email shall be deemed to approve the validity of any New York State law, including but not limited to section 1101(b)(8)(vi) of the New York State Tax Law, which purports to require Newegg to collect and remit New York State sales tax on its sales to residents of that state.”

    IANAL, but as far as I am concerned, it’s not. Interstate commerce = feds. If I were a company selling from here (MD) to NY I would tell NY to f-off too, there’s nothing they can legally do to me. Yes, the “affiliate” stuff is grey area, but if I’m just here and the customer’s there – too bad.

  38. battra92 says:

    @nicemarmot617: Secession is possible and legal since it’s West Virginia or Maine style secession and not South Carolina style secession. :)

    Why don’t we trade? Republicans can get UP Michigan to secede to gain 2 senators and NYC can secede to gain 2 Democrat senators. The whole nation then gets 4 more useless senators and a few more useless Congressmen … hmm, doesn’t seem so great now. ;)

    I’d rather visit Albany than NYC though. Of course, I’d rather go to Saratoga than go to Albany. Of course, I live in Massachusetts so I don’t mind all the people of Albany flocking across the border to go to shop in Lee to save 3% on sales tax (and 8% if we’re talking clothing.)

  39. battra92 says:

    @RevRagnarok: Well, the commerce law is pretty clear and what pisses me off is if I drive across the border to NY and buy a light bulb and pay tax there, Deval Patrick thinks I should also pay Massachusetts 5% because I’m “using” it here.

    Total BS!

  40. TracyHamandEggs says:

    To those in NY complaining about money going elsewhere in the state, you do realize that about half your infrastructure isn’t in the city right? Power and water both come from outside the city… Plus the highway system that actually allows people and goods to flow in and out of the city. And the city schools somehow cost more per student then almost any other school system, even without having to pay for buses.

  41. Mysterry says:

    @dieselman8: Actually, Texas pay the most taxes and depending on where you’re living or shopping in, it can be lower or higher. I know it’s at least 12%

  42. allstarecho says:

    I hate it when companies that have no office, store or factory here in Mississippi, charge me taxes. Nintendo is my number one gripe. Buying Wii points. When the Wii first came out, and you purchased Wii points online using the Wii itself, they didn’t charge taxes. Then all of sudden, they started charging taxes. And I assure you there is not the first Nintendo office, store or factory here in Mississippi. But they charge taxes none the less.

  43. Tankueray says:

    @Lunaped: Where are you at? I’ve never been anywhere in Texas where it was more than 8.25%
    Hotel taxes run about 15% but that’s it.

  44. BearTack says:

    NJ has recently passed NY as having the highest State and local taxes per capita.

  45. HeartBurnKid, creepy morbid freak says:

    Yeah, suck it down, New York!

    While we’re at it, how about ISPs actually stepping up against the New York Attorney General’s office and not throwing the baby out with the bathwater on the Usenet thing?

  46. FromThisSoil says:

    I got the e-mail this morning. Needless to say, I’m pleased with this outcome.

  47. balilanai says:

    Slap in the face of NY State! This will help ensure other states, falling short on sales taxes due to poor decisions and over spending do not take the path that NY took.

    Regardless, since everything is expensive in NY City, this is good for their residents.

  48. admiral_stabbin says:

    Kudos to Newegg for being so responsive. I’ve made a lot of business and personal purchases from them over the past half decade, and, they’ve always been awesome to buy from.

  49. Calavera302 says:

    @nicemarmot617: Believe me, most of us in upstate New York wish that the city were separate as well. Here in Rochester, we pay ridiculous property and sales tax, and all of it goes to the city.

    The real problem is that New York is incredibly socialist. We spend far too much in the first place, on government programs which are not exactly known for their efficiency.

    I have never been so happy as when they divorced the city from the state for car insurance purposes. My insurance went from $900 every 6 months to $250 every 6 months overnight.

  50. Byzantine says:

    A private company telling the Tax-aholics in Albany were to stick it. I love it!

    Take away more tax revenue for NY and watch them speed up that budget reform they keep talking about.

  51. baquwards says:

    Newegg is my favorite retailer ever!

    I purchased a large screen LCD from them last year, when it came, UPS had destroyed it, I refused the shipment. I called Newegg to tell them about it, and told them how disappointed I was as I had been saving for this TV for a while. I told them to ship a new one if they could ASAP and charge my credit card if they needed to until they got the broken one back. They OVERNIGHTED me a new TV at their expense, and never charged me for the second one, they just took me at my word. They sucked up a $200 shipping charge to make a customer happy!!!!!!! I am loyal to Newegg, and tell everyone I know about them

  52. RevRagnarok says:

    @battra92: Here too. This is one example. Next time I need big furniture, I’m borrowing my buddy’s trailer and driving to Delaware (no tax).

  53. lingum says:

    How does David Patterson know he’s David Patterson? He look in the mirror or something?

  54. TomBrooklyn says:

    Outstanding. NYS/NYC sales tax be damned.

    NYS/NYC ought to get it’s act together by cutting expenses–starting with pork-belly supporting legislaters who also play the role of Santa Clause to special interests and the poor in order to get elected and stay elected.

    Why ought a California company give a hoot about what kind of tax NYS/NYC wants to impose on it’s citizens? Let NYS/NYC collect it themselves if they want to try that.

  55. ageekymom says:

    @dieselman8: That’s why, when I come to Chi-town to shop, I ship everything home.. it’s still cheaper than paying the sales tax!

  56. endless says:

    i’ll be curious to see how this plays out.

    i can only see it ending in the supreme court one way or another.

    i think it would be funny if new york starts trying to charge people who aren’t filing use tax on purchases.

  57. aristan says:

    I’m not sure about New York, but I know here in NC, there is a box on your income tax forms that asks if you made any purchases online where North Carolina State Sales Tax was not collected. If you have (and really, these days, who hasn’t?), you check a box and you’re billed $10 by the state for internet sales tax.

    Seeing as sales tax in Mecklenburg county is 7.5% (the state’s is 4.25%), that’s sales tax on around 130 bucks. (though it is 4am, my math may be WAY off lol) I spent far more than 130 bucks online last year, so I am perfectly fine with just giving them the 10 bucks.

  58. majortom1029 says:

    nicemarmot617 here on long island we have it worse then you do. Most of the taxes i ny come from long island we pay the most even out of the city but we get less tax dollars then even nyc does.

  59. Meathamper says:

    So what happens if I “forget” to pay sales tax?

  60. wooogie says:

    so when’s amazon gonna stop charging tax?

  61. luckybob04 says:

    “I just don’t see why I have to give them my money when the place I actually live is completely falling apart, infrastructure-wise. Does it seem wrong that the tax money I pay should pay for tax-funded items in my city? Or at least my general area? I guess it’s the state legislature who’s really the problem.”

    @nicemarmot617: You’re right, it’s not fair to see your money not going towards your area. But it’s not just NYC. Almost every upstate city is falling apart too. Cities like Buffalo are being crushed by Albany’s unfavorable tax climate for businesses and residents. People are sicking of it and can’t afford it, so they’re fleeing the upstate (as they have been for decades). And Albany sees the people leaving and the economy tanking…but instead of cutting taxes, they raise them to make up for the revenues that left! And the cycle starts over again…

  62. RifRaf says:

    I’m liking NewEgg more and more…I don’t even live in NY but that is awesome…less money on taxes means more money on beautiful gadgetry.