Newegg Decides Not to Tax New York Residents

Back in May we wrote about how Newegg was joining Amazon in charging taxes in New York. Newegg really had no choice but to comply with a bill that was signed in the state called the “Amazon Tax Bill.” Under that bill, certain out of state retailers are required to collect taxes for the state of New York if the state believes that the retailer has some type of “physical presence” in the state (e.g., affiliates). Newegg complied and sent a letter out to their New York customers in May apologizing and saying they’d start collecting taxes, but now they recently sent another letter with some good news!

The letter reads:

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 theState 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.

At the end they did include a disclaimer saying that while they may not charge taxes anymore in New York as of August 21st, residents may still have to pay those taxes on their own to the state, which is what they were to do before the Amazon Tax Bill was ever signed.

For those of you wondering if Amazon will soon stop charging taxes in New York as well, you won’t have an answer quite yet. Amazon is still fighting New York with a law suit. Their biggest argument, according to PC Magazine is that they “do not solicit or consummate sales on behalf of Amazon and are not authorized to act as Amazon’s agents.”