A company refuses to collect sales tax due to customer demands

[Twirlcan]

NewEgg!

Being a computer nerd and freelance computer professional this is one thing that made me stop shopping online at NewEgg but now I am going to continue.

For a bit of background, the New York State Legislature passed a law that gave them the right to collect sales tax from online retailers claiming it was unfair to brick and mortar businesses that had to collect the tax. Now one would hope that brick and mortar companies would refuse to pay as well but they have actual police jusidiction to face, so I can’t say I blame them for not trying.

Here is the e-mail I got:

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

I am quite happy about this as a believer in Austrian Economics and more importantly as a consumer. Now I can get that new load balancer.

[Byzantine]

It’s been years since I read any Commerce Clause cases, but it sounds like Newegg is betting that the NY law wouldn’t withstand such a challenge. Kudos to them, in any event.

[wombatron]

That would be quite a victory for free enterprise. I can hear the liberal statists whining already… [:P]

[David_J_Heinrich]

It’s unlikely they’re directly “violating” the law; they probably closed down their affiliate program in NYS, so that now even that liberal interpretation of having a “business presence” in NYS does not apply.

[Knight_of_BAAWA]

Unless I can’t find something at Newegg, that’s my main source for parts (except memory, which I get directly from Crucial).

I’m glad that Newegg has reversed that policy, even though I don’t live in NY.