Amazon collecting Sales Tax in June

[RenationaL]

Items Shipped to New York State
Effective June 1, 2008, Amazon.com LLC will begin collecting sales tax on items shipped to destinations within the State of New York as New York has enacted a new law requiring out-of-state sellers to collect and remit sales tax based on advertising. Amazon has filed a lawsuit challenging the constitutionality of this provision. However, as required by the law, we must still begin collecting New York sales tax beginning on that date.

http://www.amazon.com/gp/help/custom...?nodeId=468512

[BiscuitSlayer]

Wow. Talk about taxing everything possibly immaginable. How rediculas is that?

[RenationaL]

Important Message to Our New York Customers

May 23, 2008

Dear Valued Newegg Customer,

As a result of recent changes in the State of New York Tax Law requiring certain out-of-state retailers to collect and remit sales taxes to the State of New York, we regrettably inform you that Newegg.com must begin collecting applicable state and local sales tax for all orders shipped to New York addresses on or after June 1, 2008.

Qualified business customers can continue to use the Newegg.com Sales Tax Exempt Form.

We value our relationship with you and all of our New York customers. We apologize for any inconvenience caused by this change in New York law and assure you that we will continue to work hard to offer you the best prices, fastest shipping and award winning customer service you deserve.

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

[dr.tran]

This is just plain stupid. They give us the economical stimulus and then they tax us?

The worst thing is that this is the first state for this to happen but probally not the last. I have a feeling other states are gonna follow.

[steven]

Originally Posted by dr.tran

This is just plain stupid. They give us the economical stimulus and then they tax us?

I agree that the state sales tax on purchases from out-of-state companies is improper, but I don't understand your statement. The "they" that setup the economic stimulus is the federal government, and the "they" that is collecting the sales tax is the New York state government. There is no connection.

Originally Posted by dr.tran

The worst thing is that this is the first state for this to happen but probally not the last. I have a feeling other states are gonna follow.

I fear you are right. I'm sure quite a few state legislatures are waiting with bated breath for the outcome of Amazon's lawsuit.


What I'm really curious about is how such a law can be enforced. What can the New York state government do to "punish" a non-compliant company that isn't within New York's jurisdiction? Since it is not a federal law, it seems like online retailers with no physical prescence in New York could (and should) just ignore it. It is going to be a bad precedent if the supreme court upholds a state law that is effectively governing companies/people in other states.

[dr.tran]

Originally Posted by steven

I agree that the state sales tax on purchases from out-of-state companies is improper, but I don't understand your statement. The "they" that setup the economic stimulus is the federal government, and the "they" that is collecting the sales tax is the New York state government. There is no connection.

Well u are right in that they are 2 things as federal and state. But I'm sure they both benefit from the economy doing better. So I think it would be better for them to work together rather than counter acting what one has done. So when I say they, I mean the government as a whole. Not federal, not state, but as a government that should be working with each of its parts to better the country as a whole.

[BiscuitSlayer]

Probably northern states close by to New York and then eventually California. The southern states don't impose taxes the same way those other states do.

[RenationaL]

This is based on a law that was recently passed by the New York State Legislature. Typically, in order for a state to be allowed to force a company to collect sales tax on its behalf, and not be in violation of the "taxation without representation" precept of this country's Constitution, that company has to be based in the respective state that the tax is being collected for.
About 15 years ago, states started forcing companies to collect sales tax on their behalf, even if they only had a "presence" in their state. Unfortunately, these rules have been upheld by certain court decisions.
The new law passed in New York, extends the definition of "presence" to include a web presence, and to include the web presence of an affiliate or otherwise related entity. That is why Amazon, for example, has to start collecting sales tax from New York customers. Even though Amazon is not based in New York, has not physical presence of any kind in New York, they do have "relationships" with other booksellers that sell through Amazon that DO have a presence in New York.
Needless to say, Amazon is taking this to court, to try to have the law overturned.

[smoq]

They say Albany invented this tax because they failed to make budget cuts- this is ridiculous-for example it'll be better for me to buy a computer on newegg for let's say $1000 and send it to my friend to NJ than to send it home, cause it is cheaper to go to NJ, pay for gas and tunnel than to pay tax around $80. And they're saying that it will be fair to companies located in New York who are selling things on internet- What a nonsense- I don't thing companies like adorama or b&H suffered that much. What do you think?