Newegg Defies New York Sales Tax Law 635
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."
I'll admit, I'm a bit confused (Score:5, Interesting)
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?
The Register copy and paste? (Score:5, Interesting)
"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."
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
No, that's exactly it. It save newegg the effort, and also increases their business from customers who intend to avoid paying the tax themselves.
It will even increase business from customers who DO intend to pay what they owe for 2 reasons:
1) Something you will owe later doesn't FEEL as costly to many people as something you have to pay now.
2) Many states (I'm not a new yorker, so I don't know if this applies to them) understand the difficulty in tracking your sales, and offer a flat tax option. If you intend to pay this way, then it's sort of like an all you can eat buffet. Once you've paid the flat rate, it's in your best interest to find as many retailers as you can that don't collect tax.
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Yes, but when you purchase something from out of state, the normally-unintelligible mess of tax laws become even more convoluted.
Many states have a "use" tax, which applies to items purchased from out-of-state by state residents. The burden of paying it rests on the individual, however, not the merchant (and very, very few people actually pay it except on items they can't avoid reporting, such as cars and boats).
The real issue here involves what constitutes a "presence" in a given state, as well as where the transaction actually occurs. Most states would like to claim the transaction occurs at the location of the buyer, but so far the federal government hasn't let them get away with that. More commonly, states limit their attempts to collect to vendors who have some physical presence in that state - Meaning they have some power to make life miserable for noncomplying vendors.
So then the question changes to "what constitutes a physical presence?". The largest online merchants such as Amazon have warehouses all over the country, but don't ever actually sell anything on-site, they just ship from there. So does that count as a retail presence, or not?
It's more than just user feedback (Score:3, Interesting)
http://forum.abestweb.com/showthread.php?t=108986 [abestweb.com]
"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. ..."
Re:Use tax = sales tax and you are supposed to pay (Score:5, Interesting)
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.
Re:Any tax revolt is a good one. (Score:2, Interesting)
Please America, stop calling Socialists by the name Liberal.
Makes Adam Smith look bad.
Finally (Score:4, Interesting)
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 [slashdot.org] because they might be used to transmit child pornography.
I can't wait until he's up for election, personally.
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Right.. but the Use tax applies to citizens within a state buy something from out of state. Of course I don't understand how that survived any Interstate commerce challenges. It seems to be that while indirect, it's still affecting Interstate commerce.
NY taxes (Score:5, Interesting)
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.
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
It doesn't even cope well with the paved world. If you buy a box of matches in Ontario County, NY, use half of the matches, drive to your home in Monroe County, NY, and then use the other half, you have to pay the difference between Monroe County tax and Ontario County tax on half the purchase price of the box of matches. Somehow you should get the tax difference on half the purchase price back if you do it the other way around, but good luck with that.
Just a way to make sure that they can arrest any citizen in the country on tax evasion charges any time they want.
Re:Any tax revolt is a good one. (Score:3, Interesting)
If you are any kind of economicist you would realize that no functioning economy in the world today taxes at a rate that exceeds the Laffer curve inflection point. Regeanomics is a ridiculous idea.
According to Nobel prize laureate James Tobin, "[t]he 'Laffer Curve' idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981."
Re:Any tax revolt is a good one. (Score:1, Interesting)
Hasn't Reganomics been pretty firmly debunked by now?
Nice straw man.
Where'd the GP post mention that?
New York is in a budget crisis, not because taxes are too high now, but because they were far too low for decades, and the state's infrastructure was left to rot. Now we're dealing with the effects (80 year old steam pipes exploding in NYC, and a power grid that can't support itself), and the costs to fix the problems are going to be high.
The infrastructure rotted not because the state government didn't have the money to maintain it. It rotted because the power-grabbers were spending the people's tax money on things that buy more votes (and power!) for themselves. "Vote for me and get a bigger welfare|Social Security|pay check!"
The infrastructure rotted by the CHOICE of a populace that voted bread-and-circuses for itself.
Now, it's time for that populace to pay the price of their greedy politics of envy.
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.
No, it'll just make them move somewhere else.
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.
Wow, you're working really hard to convince yourself your "tax the rich" wealth-redistribution scheme is really for the best, aren't you?
Riddle me this, Batman: When were the three longest periods of continuous job growth in the US, and what just coincidentally happened when they began?
Look that one up yourself. You may actually learn something.
Liberal economics genuinely to blame. (Score:3, Interesting)
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.
Re:It is like every other tax. (Score:3, Interesting)
Gallon of Gas Breakdown [wallstreetfighter.com]
73% - Crude oil
11% - Federal and state taxes
10% - Refining costs and profits
6% - Distribution and marketing
Note that its Refining costs and profits, not just profits. The average profit per gallon for the Oil companies is $0.09/gal. But lets look closer at that Federal and state taxes number. From a $4.00 gallon of gas, they are earning $0.44/gal. Put $100 in your SUV and Exxon made $9.00 dollars. At the same time, the government made $44.00. WAY more than the Oil companies. Do a little math and it comes out to be Billions more at the end of the year.
So you tell me... who is making out like a bandit here? Exxon or the Government.
Who is getting bent over the table from taxes? (go look in the mirror for the answer).
Why both candidates are retards. (Score:5, Interesting)
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.
Re:Liberal economics genuinely to blame. (Score:1, Interesting)
Clearly it's better for women to get cheap contraception than have extra kids. How much do you think medical costs are for childbirth? How about when there are slight complications, which is rather common? Now how about the benefits we'll have to pay for this extra child?
Your ideal also falls apart as soon as you lose the ability to be the cream of the income earners. You'll learn this when you grow up and see the shit that happens to people around you. After a while your insurance goes, you can't afford it either, yet you are in bad health. Your me-me-me attitude is the reason we have a complete fscked up health and education system in the US. Education and health should be free, after all, it is in every other western country. Of course, people like you think the world is wrong and we're #1, we're #1. I bet you lap up fox-news.
To improve the general living conditions and our county's health, we need to stop taking it up the ass every time a company bribes our elected officials and chooses to do as they're told by them instead of representing the interest of the people. It would also be a good idea to stop dropping bombs on different country every few years. Nothing improves because of it, other than lining a few individuals' pockets. After 12-15 years, we change the "enemy" and start over. Hardly progressive or in the interest of the nation.
Re:I'll admit, I'm a bit confused (Score:1, Interesting)
Even more fun with use tax: how about the states that don't have state income tax (and thus no state tax returns for individuals)?
In general, it appears that you're supposed to keep track and cut a check to the state tax agency every so often. Good luck on tracking that (it would cost more to try and police the populace in general than the state would make back in the tax).
Re:Any tax revolt is a good one. (Score:3, Interesting)
Everything I know about taxes and city management, I learned from Sim City.
For instance, once a city reaches a certain population, with enough private sector businesses, industrial and commercial, you can safely drop taxes. The burden on everyone is lessened because, despite the increased cost of running such a large city, you can still collect more than enough money between the large population and business base while continuously reducing the rate overall.
This calls for an example.
Let's say I have a city of one person -- we'll call him Jimbo. Since he's the only person in town, making about $100 a month, and it costs $50 to run the place, I'll tax him 50% of his earned income to make sure services are running just fine. Another person, Mary, moves into town, making $100 a month as well. If there was no change in infrastructure cost, I could safely cut the tax rate in half, to 25% per person, and still run my town just fine.
Now, here's the real magic in this -- even if city cost goes up with Mary's move into town, the cost of running the town doesn't necessarily double. Infrastructure that Jimbo was paying for is already in place, and the people who are being paid by Jimbo's tax don't necessarily get a fat bonus because of the new girl. Even if the cost of running things went up to $75, that would still only imply a tax of $37.50 per person, a strong reduction.
Sure, there are feasible limits to this -- anything whose cost remains fixed and goes up linearly per person won't impact the rate increase, and it also assumes that Jimbo and Mary are both making exactly the same amount of money and that neither of them is impoverished.
If Mary moved into town and only made $50 a month, while services jumped to $75, then Mary would be in the shortfall, taking home $25, while Jimbo leaves with $50. If the cost of living is $30, Mary is screwed, basically.
The three directions that can be taken: Tax Jimbo more for being rich, cut service costs and salaries, or just let Mary try to struggle by on her paltry wage.
If Jimbo is taxed 65% while Mary is taxed 20%, she takes home around $40 and he recieves $45, halving both their wages equally. However, since Jimbo is earning twice as much as Mary, yet only keeping about five dollars more, he'd become unhappy with this equation -- he could either move, earn less money, earn more money to compensate, or go to prison for not paying his taxes.
Now, if he quits his job and gets one paying $50, like Mary, the city suddenly finds itself running on 75% of wages earned, or a tax increase to 37.5 such as before. Jimbo's plan backfires, however, as he is suddenly taking home only about $13.34 a week, as is Mary. Suddenly the citizens are broke and will probably leave.
If he moves and the cost of services drops to $50 again, Mary is suddenly paying all of her earned income into taxes. Unless this is a complete social state and all of her needs are covered by the $50, then she will be forced to move, facing starvation.
Finally, if Jimbo suddenly gets a new job paying $150, the tax rate should drop for him, seeing as 65% of $150 is $97.50, way more than is needed from him. They need $65 from him, with Mary footing the bill on the last $10. He would now have an effective tax rate of a bit over 43%, both rewarding him for earning more while maintaining the amount needed to run the city.
The lesson learned here -- once the base cost is established and taxes reduced so that the poor may recieve a modest wage, the system can afford to award lower taxes to the wealthy, relative to the middle class. This system has one flaw, though -- either you're rich or you're poor. The Middle Class is forced to either earn more money or become Lower class, damaging the state. Maintaining an equal tax for Middle Class and Upper class might alleviate this, but simply taxing Jimbo a lot more than Mary is just going to drive him to greener pastures, hurting your economy more in the long run.
Re:I'll admit, I'm a bit confused (Score:3, Interesting)
Re:Welfare States (Score:5, Interesting)
Re:Any tax revolt is a good one. (Score:3, Interesting)
The economy did not fall on its ass because of progressive taxation. What happened was that the hot shots on Wall Street were engaging in a ridiculous business enterprise and the deregulation that conservatives fawn over stopped anyone from catching it on time. Progressive taxation had nothing to do with anything.
Moreover, your rant against taxes is retarded. Conservative neo-cons in the Bush Administration went for a little trip in Iraq that cost three trillion dollars. Now we have a budget deficit of $500 billion next year, and our national debt tripled to $9 trillion under the Bush Administration. This debt was incurred by the American people--and if you are a conservative, you probably supported it. The American people allowed this to happen, and now the tab has to be paid. Who are you going to tax if not the rich? The poor? Try squeezing more blood from a stone--that's a good idea.
Taxing cigarettes is not meant to bring in more revenue. It's meant to reduce cigarette smoking, which places a huge burden on the public health system. You want to talk about pointless orthodoxy, then let's focus on the conservative war against marijuana and other drugs. If you like smoking so much, why don't you legalize marijuana and save on the billions we've spent on the war on drugs? It'd also free up more prison space.
In short, your post was stupid.
Re:It is like every other tax. (Score:2, Interesting)
Which clearly explains why prices have been coming down for the last few weeks.....
There's no other way to explain the exorbitant prices that there are now. If they couldn't just charge what they wanted, the prices wouldn't be even as high as they are now, let alone what they were a couple of months ago. People would've revolted ages ago.
Why not?
FFS. I covered this. Gas is something that most people need. Not want, need. There are few enough oil companies that they can keep prices high and not worry about being out-priced by a competitor, and people will pay for it because they have to. They may as well be charging for the only supply of oxygen, that's how much leeway they have to do what they want.
I'm a lifelong Democrat but I'm getting tired of hearing people make "big oil" into the problem. Windfall profits tax? WTF is that? Since when did America punish people merely for being successful? And I gotta say that I love all of this talk about their "excessive" profits. The profit margin of the oil industry pales in comparison to the telecommunications and pharmaceutical industries. Why aren't we taxing them more?
I don't want to tax them more. That's retarded. They'll just pass the tax off to the consumer. What should be done is either some regulation, or trying to get some competition going. One of those might lead to lower prices.
And comparing oil companies to telecom doesn't help your argument at all. Saying that one bad guy is better than an even worse guy is meaningless. That's like saying "The flu rocks! I mean, think about it: we could have HIV! I'm so glad I have the flu and not HIV!". It's technically true, but meaningless, because both are bad.
Re:Welfare States (Score:2, Interesting)
No, by "those Western states" I mean Western states that are Red States. If that sentence actually meant what that response perverted it into, it would have said "all the Western states", not "all those Western states".
As usual, a Republican just took a statement they didn't like, ripped it from the clear context that gives it its sense, and selfservingly reinterpreted it in public into a fake attack on them to whine about, just because their version is grammatically, but not semantically, "correct".
Re:Welfare States (Score:3, Interesting)
The Red states provide exactly the services you guys need. You know, all those missile silos, huge military bases, over-subsidized agriculture, coal-fired power plants, and so on.
I can't think of a single "blue" mainstream politician in favor of reducing any of these...
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Wrong questions.
Instead you should ask, "what does my state do to make it easier to purchase through Amazon?" That's directly related to how much tax they deserve.
All NY taxes that should be paid (road taxes, etc) are being paid by the delivery vehicle owner, a fact which is represented by the shipping price.
Re:Taxed to death (Score:3, Interesting)
NYS has sent their thugs to malls in bordering states to pressure shoppers bearing NYS license plates to shop in NYS. They can take their mafia thuggery and shove it.
NYS has not attracted any new businesses in the LAST FIFTEEN YEARS and citizens are fleeing the state in droves to escape high taxes and are following the jobs leaving the state.
Business groups keep sounding the alarm, but no one in state gov't is listening.
Re:Welfare States (Score:1, Interesting)
In the case of New York it's particularly outrageous.
Not really. The biggest Federal expenditures are direct payments to individuals via Social Security, Medicaid, Medicare, and Welfare. A lot of New Yorkers retire some place warmer and cheaper than New York, taking their Federal payments with them.
For example, New York receives about 45 bn in retirement and disability payments, 37 bn in other direct payments (welfare, food stamps, low income housing assistance, federal loans, pell grants, etc), and 45 bn in grants, 11 bn in procurement contracts, and 9 bn in salaries and wages. Total non-defense Federal expenditures for New York is about 145 bn.
By way of comparison, Florida receives 52 bn in retirement and disability, 38 bn in other direct payments, only 22 bn in grants, 15 bn in procurement contracts, and 11 bn in salaries and wages.
Direct transfer payments are not "pork" in the traditional sense, and need to be taken out of the picture for a fair analysis of who pays what because that money will follow individuals around regardless of where they live. Example: a person that works in New York all their life and retires to Florida.
Most pork is buried in grants and procurement contracts. Florida has a population of 18 million, New York a population of 19 million. Roughly equivalent. But New York receives 56 billion USD in "pork" compared to Florida's 37 billion USD.
In other words, New York gets it's fair share of pork and then some. New York's per capita income is 22% higher than Florida's but their Federal pork is about 51% higher. Adjusting for population back of the envelope, that means that New York gets about 45% more than it's "fair share" compared to Florida.
In other words, New York is not getting screwed.
Re:Welfare States (Score:3, Interesting)
It's closer to 85% in Nevada. Las Vegas is running out of room to grow...sounds ridiculous that that would be the case when we're in the middle of the desert, but the reason 3-story homes are being built on postage-stamp lots at 10-12 per acre (maybe more) is that the city is surrounded by land owned by Uncle Sam.
Re:Welfare States (Score:3, Interesting)
You realize that the "dust bowls, depressions, and bank catastrophies" were largely caused by urban centers - and by the federal government making really fucking stupid policies, resulting in the wanton destruction of things of food during famine, right?
You also realize that the vast, vast majority of federal dollars go to things like roads and infrastructure, right? They don't go to some redneck's bling collection. They go to roads and little else.