Newegg reverses practice of charging New York sales tax

The electronics retailer in June started charging sales tax for shipments to New York to comply with new state law. But last week it joined the ranks of other retailers returning the tax-paying responsibility to consumers.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto

Online electronics retailer Newegg has stopped charging sales tax to its New York customers, according to a posting on the Consumerist.com.

The move by Newegg reverses action the online retailer took in June, in which it began to charge applicable sales tax for all shipments to New York, following passage of a new state law that required certain companies to charge sales tax on shipments to New York state.

Effective August 21, however, Newegg discontinued the practice and is leaving it up to New York residents to pay that sales tax themselves. That policy basically returns the responsibility of paying sales tax for online purchases back to the New York consumer, which was the case prior to the New York legislature passing its law earlier this year.

Newegg is not the only retailer taking a stand against the change in law. Earlier this year, Amazon.com filed a lawsuit against the state, claiming its law was "invalid, illegal, and unconstitutional." And online retailer Overstock has taken similar legal action. Amazon, however, has since said it will abide by New York law and collect the taxes.

Calls to Newegg were not immediately returned.