Newegg customers are receiving tax bills from the DRS because Newegg didn't charge them sales tax

[91wow]

2 minutes ago, The Pikachu Mafia said:

 

The information in the article is pretty specific about being for those 4 states only. "Your state" isn't ambiguous at all nor was it meant to be, It's referring directly to the states of CO, LA, VT, and RI.

:Facedesks:

[Okjoek]

I bought my RX 460 on Newegg about a month after the 460 was released. If NY were to follow this path would they be able to charge me tax for my GPU I bought that long ago?

 

edit: Launched August 2016, so probably ~September 2016 when I bought.

[The Pikachu Mafia]

6 minutes ago, 91wow said:

:Facedesks:

Why is pointing out an obvious header to an article an occasion for a facedesk?

[AlTech]

Why not just have a federal level tax system whereby sales tax is included in the price/is paid at the time of purchase kind of how like VAT works in the UK?

 

E.g. Hypothetically I buy a new GTX 1080Ti for £840 on Amazon including VAT (so £699 before VAT) .

 

this way is easier for everyone...

[The Pikachu Mafia]

4 minutes ago, AluminiumTech said:

Why not just have a federal level tax system whereby sales tax is included in the price/is paid at the time of purchase kind of how like VAT works in the UK?

 

E.g. Hypothetically I buy a new GTX 1080Ti for £840 on Amazon including VAT (so £699 before VAT) .

 

this way is easier for everyone...

Sales taxes go to the State, not the federal government. While it might not be a bad idea, enacting a federal sales tax to eliminate state sales tax would inevitably lead to a reduction in state revenue.

[Kobathor]

The problem with things like "use tax" is that I'm sure 99% of people in the US (not exaggerating) have no idea what a "use tax" even means. People buy stuff online all the time and I'm sure 99% of them don't think at all about reporting it. It might technically be "willful tax evasion" but how do you expect the layman to read the whole tax code, or even a tiny amount of it?

 

I know it won't happen because of tax companies lobbying, but you shouldn't be responsible for finding out how much you owe the govt. I get things like reporting income, but keeping track of income is easier than logging every purchase. Keeping every receipt and sale written down is ridiculous. Especially keeping track of purchases online that the store didn't tax you for. This is why you have to pay money to pay more money in the form of hiring tax accountants as a private citizen. 

[Evanair]

4 hours ago, The Pikachu Mafia said:

You're working with the assumption that people are willfully evading taxes, which at least in my case is not true at all

But you are willing avoiding paying taxes.

 

ALL state tax forms have places for filling out your use tax. When you file your taxes for 2014/15/16, if you failed to report any purchases you didn't pay taxes on, you are guilty of tax evasion. 

 

This is NOT on Newegg. Ignorance of the law is not an excuse.

[Ezzy-525]

22 hours ago, Kierax said:

Why doesn't LTT setup their own tech supply chain? 

One thing at a time 

[The Pikachu Mafia]

5 hours ago, Evanair said:

But you are willing avoiding paying taxes.

 

ALL state tax forms have places for filling out your use tax. When you file your taxes for 2014/15/16, if you failed to report any purchases you didn't pay taxes on, you are guilty of tax evasion. 

 

This is NOT on Newegg. Ignorance of the law is not an excuse.

You can't willfully avoid something you have had no prior knowledge about. That's like saying small children willfully catch the flu when they have no concept of of germs or hygiene. I'm sure use tax isn't a thing that most people even think about, myself included up until a few days ago. Willingness requires prior knowledge of the action committed, that's basic ethics.

[Scionyde]

Snitches get stitches, Newegg...

 

Kidding. But man, I can totally see the state of New York doing something similar so RIP me. I fully understand the rationale though, even if avoiding the use tax is basically the jaywalking of tax evasion.

[2FA]

1 hour ago, 91wow said:

MOST states DO have an "Amazon Tax" is something you might not be getting. Actually only 5 states in the US have no taxation at all on internet sales. And MOST states require the retailer to do the tax work so that things like what is happening in Connecticut doesn't happen. Only 9 states have laws where regardless of foot print you still have to pay a tax on the sale. 45 states so all but 5 you have to pay taxes from a sale on Amazon. 26 from Newegg. 13 from Ebay.  

Sauce?

[TenThousand]

Tax is pretty retarded. You earn money? Give us some of that. You spend money? We still want some of that.

 

This is why cryptocurrency suddenly got huge. It promised anonimity. Of course, the reality isn't exactly like that (with exchange sites buckling like newegg did) and that's why it went down a bit. But that's how you can tell that no one likes the system.

[CoffeeBlack]

5 hours ago, The Pikachu Mafia said:

You're working with the assumption that people are willfully evading taxes, which at least in my case is not true at all. Newegg never had a disclaimer that CT residents had to claim items bought on their site when completing taxes (despite having such a disclaimer for Colorado, Louisiana, Vermont, and Rhode Island) and I wasn't aware that they didn't collect sales tax until I received my letter. Furthermore Newegg betrayed consumer trust by handing over private sales data when they were not legally required to do so.

 

I'm not saying Newegg should pay for my taxes, and I'm more than willing to pay the principle amount that I owe, but the fact that I can't shake off the interest is ridiculous. It's just that the whole way the DRS and Newegg went about this process seems shady at best, no other state has retroactively gone after taxpayers in this manner before.

It is not Newegg's responsibility to teach you tax code. Use tax isn't new and didn't appear overnight. Willful ignorance isn't an excuse to blame others for your tax error. 

[The Pikachu Mafia]

18 minutes ago, CoffeeBlack said:

It is not Newegg's responsibility to teach you tax code. Use tax isn't new and didn't appear overnight. Willful ignorance isn't an excuse to blame others for your tax error. 

You're right, it's not Newegg's responsibility to teach their consumers about taxes. But it is on them to either protect consumer data or to alert the consumer that their sales records will be handed over to the state where extra taxes (such as the use tax) may apply. Again, they had these disclaimers for CO, LA, VT, and RI but not CT or any other state. Furthermore when Newegg voluntarily handed over the data they outright lied to their consumer base about what was happening. They claimed that CT passed a new law which required them to forfeit the data, when no such law had been passed. The following is a clip from an email that I received from them:

 

 

Note that they've finally provided a disclaimer on use tax only after lying to the consumer and years after the date of purchase. Newegg is not innocent here, there is no defense for their actions.

[91wow]

1 hour ago, DeadEyePsycho said:

Sauce?

The Verge  CNN money  Courant

[2FA]

3 minutes ago, 91wow said:

The Verge  CNN money  Courant

I meant on the stats for the "amazon tax," not that Amazon started collecting tax. I already knew that part.

[dtaflorida]

I wonder what Connecticut does if you use fake names and use paypal account with fake names that you have transferred money to via friend payments?

[Evanair]

45 minutes ago, dtaflorida said:

I wonder what Connecticut does if you use fake names and use paypal account with fake names that you have transferred money to via friend payments?

Banking under a fake name across state lines? Sounds like a good way to end up in prison.

[Lurick]

I hope everyone in this thread that says "Ignorance is no excuse" has paid taxes on all their steam games they've bought over the years.

[Zodiark1593]

1 minute ago, Lurick said:

I hope everyone in this thread that says "Ignorance is no excuse" has paid taxes on all their steam games they've bought over the years.

Wonder how many people at these tax agencies have Steam accounts, or a company Steam account to see what people are playing, and what to tax them for. 

[Jito463]

20 hours ago, Thony said:

I feel sorry for all US citizens who have to calculate their tax everytime before they checkout to actually see how much they pay for something. Sad...

Tax is automatically calculated at the end of a transaction, if tax is applicable.  We don't have to calculate anything.

19 hours ago, michaelocarroll007 said:

in the US the tax is not in the product price. if they are selling something for $10.00 its 10.00 + tax  so at checkout it will go to whatever the tax rate in your state is. for a total of Example $10.86 at the tax rate of 8.625%

Fun fact, many (if not all) states actually have a restriction on retailers advertising with the sales tax included.

19 hours ago, Blademaster91 said:

I'm not sure but it doesn't seem legal that Newegg is putting the tax on the customers when CT isn't listed in the disclaimer.

Newegg isn't putting tax on the customers, the revenue service of CT is.

18 hours ago, The Pikachu Mafia said:

(say you bought a video game or whatever in New Hampshire and brought it back to your state)

If you bought the product while in another state, you would have already paid sales tax to that state.  You only have to pay a use tax in your filing when you buy across state lines.

2 hours ago, Zodiark1593 said:

Wonder how many people at these tax agencies have Steam accounts, or a company Steam account to see what people are playing, and what to tax them for. 

Good luck to them on that.  My Steam profile is - and always will be - private.

[Lodmot]

Quite frankly, I'd say both Newegg and the state of Connecticut are at fault here for a couple reasons:

 

1) It is Newegg's responsibility to make sure that we are charged the appropriate amount of tax. Even if it wasn't, there's no physical way for a customer to manually specify the tax amount owed when they're buying a product from Newegg.com. So we're being penalized for something that couldn't have been avoided anyway. When you go to a grocery store, or buy gas for your car, does required tax ever get omitted from the cost? Not when I've made those kind of purchases (though admittedly I don't often go grocery shopping. XD) 

 

2) Connecticut has failed to notify Newegg customers of this matter for over 3 consecutive years, making this a liability on the state as well. Again-- not the customer.

[The Pikachu Mafia]

52 minutes ago, Jito463 said:

If you bought the product while in another state, you would have already paid sales tax to that state.  You only have to pay a use tax in your filing when you buy across state lines.

A) New Hampshire doesn't have sales tax.

 

B) At least in Connecticut, you still have to pay use tax on products purchased out of state if that state's sales tax is less than CT's sales tax. You can be credited the difference (for example if you bought something out of state with a 5% sales tax then the CT use tax is only 1.35%) but you still owe some tax amount. See the links for reference (the first one is for businesses and the second is for individual consumers):

 

http://www.ct.gov/drs/cwp/view.asp?A=1510&Q=270228

 

http://www.ct.gov/drs/cwp/view.asp?A=1510&Q=266708

[Jito463]

3 minutes ago, The Pikachu Mafia said:

A) New Hampshire doesn't have sales tax.

I meant that more in a general sense, rather than specifically referring to NH.

3 minutes ago, The Pikachu Mafia said:

B) At least in Connecticut, you still have to pay use tax on products purchased out of state if that state's sales tax is less than CT's sales tax. You can be credited the difference (for example if you bought something out of state with a 5% sales tax then the CT use tax is only 1.35%) but you still owe some tax amount. See the link for reference:

 

http://www.ct.gov/drs/cwp/view.asp?A=1510&Q=270228

Huh, learn something new every day.  CT must really be hurting if they're that desperate to get tax revenue.

[The Pikachu Mafia]

Yeah, again I believe use tax isn't something that most people are aware of. I had no idea of its intricacies or really even its existence before looking into it throughout this week. I'm not sure about other states, but in my opinion the way use tax is implemented in Connecticut is both impractical and absurd. There's a reason why the compliance rate is only 12% beyond just "willful evasion."

 

(Side note; our Governor has among the lowest approval ratings int the country below even Trump and our state has had budget issues for multiple decades now. It doesn't surprise me that they're desperate for extra revenue in the slightest.  )