I just received the following in an e-mail from NewEgg:
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.
There’s a good reason why businesses don’t charge sales tax to purchasers who are out-of-state, and the reason can be found on Wikipedia‘s Sales taxes in the United States page (bold text added):
Note: Taxes change, are added or eliminated frequently, so this article is prone to being out of date. If so, please change the page accordingly and cite a source if possible. There are private entities that distribute updates weekly regarding the rules in 11,000 different tax jurisdictions in the U.S.
New York State itself has 81 different sales tax jurisdictions (see this PDF). Complying with hundreds (if not thousands) of local sales tax laws is a huge burden that will have two effects, one direct and one indirect:
- retailers will incur additional administrative charges in order to comply with all the different tax laws;
- consumers will pay higher prices as retailers charge more for their products.
Perhaps it’s time for a national sales tax to replace the state/local sales tax rates, giving retailers the ability to streamline operations. After all, isn’t the purpose of government to facilitate commerce, not impede in it? (There are many sensible tax reforms which government chooses to ignore. You can read about them at the Cato Institute‘s Budget and Tax Policy research area.)
Of course, this (or any other tax reform) will likely never happen, because taxing people (and spending their money) is what government power is all about. I’d bet the house that you’ll see a national sales tax on top of existing sales taxes and income taxes before you see tax law getting simpleer.
After all, taking (and spending) your money is what government is all about.