Don Satz questions CD Now's charging of tax:

>This is news to me concerning CDNOW.  I realize that their prices are
>higher than Towers, but I've never found any reason to think CDNOW charges
>tax.  Why would they do this if not required by law? How can Tower avoid
>the law? Could Dave please indicate how he knows that CDNOW charges a tax?
>I charge tax for my services but only because I have no legal choice.

This is a relatively new phenomenon at CD Now (as far as Texas is concerned
anyway).  I've yet to figure it out.  In the "Help" section of their site,
CD Now gives the following explanation:

   "We charge required local and state taxes for orders shipped to
   California, Florida, New York, Pennsylvania, New Jersey, Texas, South
   Carolina, Indiana and Illinois addresses.  Some APO and FPO addresses
   may be charged California state tax."

However, I don't know of any Texas law requiring that internet retailers
charge a tax.  Indeed, I've *never* been charged tax from any other online
retailer.  Go figure.  I thought about writing CD Now about this to ask
just what Texas law requires them to charge tax, but I figured I'd get a
half-hearted answer, so I've just taken my business to other online stores.
Obviously, unless an online store's base prices are really low, paying
shipping charges plus sales tax negates the whole purpose of shopping
online, which, for me anyway, besides the wider selection than any local
brick-and-mortar store, are the lower prices.

Michael Butera
Houston, TX

 [This often happens when the online retailer has branch offices,
 distribution centers, sales offices, etc. in the state in question.
 If this is the case, I believe that makes them a local company, not
 an out-of-state mail order company, and therefore subject to state
 and local sales tax laws for sales made within that state.  So CDNow or
 one or more of its parent companies, probably has a corporate presence
 in Texas, and therefore must charge sales tax on purchases made in
 Texas.

 I bought a Gateway computer a few months ago, and was surprised when
 they charged me sales tax.  Though the order center I called was
 out-of-state, as was the manufacturing location where it was shipped
 from, because Gateway has offices in California, I was charged the
 local sales tax.  And this has gotten pretty far off topic.... -Dave]