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

[maartendc]

16 hours ago, TimeOmnivore said:

Well, this sucks. Hopefully, this will only be a thing in CT, as the whole reason I shop at Newegg is so I can save as much money as possible since there's no tax. Probably not though, I can see other states doing this same thing, which would kinda kill Newegg.

 

At least they still have their review system over Amazon (seriously, Amazon's review structure is complete dogshit, I shouldn't be seeing reviews for completely different products when looking at any tech item).

I know Amazon didn't used to charge Sales tax, they only started about a year or two ago. I never heard of anyone being asked by their state to pay "back taxes" on stuff they bought on Amazon though.

 

I don't even understand how all this sales tax works, because if you buy stuff on B&H for example, they only charge you sales tax if you live in New York. Apparently they aren't required to charge you sales tax if you live in other states?

 

Anyway: Who says this letter is not a hoax or scam? Taxes are usually handled annually, so it doesn't make sense that they are talking about taxes for 2015, 2016 and 2017. Unless Newegg got Audited and they started cracking down retroactively?

[SteveGrabowski0]

15 minutes ago, maartendc said:

I know Amazon didn't used to charge Sales tax, they only started about a year or two ago. I never heard of anyone being asked by their state to pay "back taxes" on stuff they bought on Amazon though.

 

I don't even understand how all this sales tax works, because if you buy stuff on B&H for example, they only charge you sales tax if you live in New York. Apparently they aren't required to charge you sales tax if you live in other states?

 

Anyway: Who says this letter is not a hoax or scam? Taxes are usually handled annually, so it doesn't make sense that they are talking about taxes for 2015, 2016 and 2017. Unless Newegg got Audited and they started cracking down retroactively?

Check the link from the Hartford Courant in the post I made immediately before your's. It's real.

[Ubleron]

Bought a bunch of hardware from Newegg, but since I'm not a US citizen and all of my purchases been forwarded by freight forwarding company I just kinda lol at this.

[SteveGrabowski0]

http://www.courant.com/politics/hc-pol-online-sales-tax-20180214-story.html

 

Kevin Sullivan, commissioner of the tax department, said it’s part of an effort to ramp-up collection of the use tax; Connecticut taxpayers are supposed to pay the state a 6.35 percent tax on any purchases made out-of-state or online where no sales tax is paid, but the vast majority do not.

 

“Usually we don’t have the data, but in several cases companies have said … we’ll squeal on our customers and you can beat up on them,” Sullivan said. “The people who sold to them have ratted them out.”

[maartendc]

3 minutes ago, SteveGrabowski0 said:

http://www.courant.com/politics/hc-pol-online-sales-tax-20180214-story.html

 

Kevin Sullivan, commissioner of the tax department, said it’s part of an effort to ramp-up collection of the use tax; Connecticut taxpayers are supposed to pay the state a 6.35 percent tax on any purchases made out-of-state or online where no sales tax is paid, but the vast majority do not.

 

“Usually we don’t have the data, but in several cases companies have said … we’ll squeal on our customers and you can beat up on them,” Sullivan said. “The people who sold to them have ratted them out.”

 

If this is true, that is very bad publicity for Newegg.

 

3 minutes ago, Ubleron said:

Bought a bunch of hardware from Newegg, but since I'm not a US citizen and all of my purchases been forwarded by freight forwarding company I just kinda lol at this.

I bought stuff from them as well in the past year and I live in the US, I have not received any letters in the mail however. But I don't live in Connecticut.

[Mutoh]

Don't bite the hand that feeds. 

[bcredeur97]

if I lived in Conneticut I'd understand the bill but they shouldn't be charging the customer's the fee. They should charge Newegg the fee.

The customers were always responsible for the taxes... I understand that. But newegg should def get those fees/fines.Tech News and Reviews

 

In fact if I were a customer I would send newegg an invoice for the fee amount. Because it is their fault. lol

[The Pikachu Mafia]

The letter is very much real, I just got off the phone with the DRS in fact. It really sucks, I'm definitely going to be calling my representative and Newegg has just lost a customer for their actions.

[AnonymousGuy]

Eh, if the figure was bad enough I would just sue and claim that the state has to prove the final destination for the purpose of assessing a use-tax was within CT.  Then assert that CT doesn't have the right to collect because of the interstate commerce clause anyways.

[Blademaster91]

25 minutes ago, bcredeur97 said:

if I lived in Conneticut I'd understand the bill but they shouldn't be charging the customer's the fee. They should charge Newegg the fee.
The customers were always responsible for the taxes... I understand that. But newegg should def get those fees/fines.Tech News and Reviews

In fact if I were a customer I would send newegg an invoice for the fee amount. Because it is their fault. lol

Newegg could have told them, no F off we don't even do business in your state, although since the CT DRS has info 3 years back they were probably willingly audited. Though I think Newegg taking the hit on those taxes would only cause them to start raising prices.

[CoffeeBlack]

The amount of misinformation and incorrect assumptions in this thread are astounding. If you live in the United States and don't pay use tax, it's your fault, not Newegg's. Every state in the US that has a general sales tax, has a use tax. It's not new, it's not a surprise (unless you're completely ignorant to what you're doing when you file taxes). Companies shipping from out of state are not responsible for collecting a state tax in which they do not have a physical presence. So the states have a use tax so they can collect the tax they're owed on purchases made online by their residents. I live in Utah. Until about a year or so ago, Amazon had no presence here, so no taxes were charged on purchases made and you were supposed to report those purchase on your state tax return. Now, Amazon has a growing presence here with facilities so they now charge tax when I buy online through them. Now, I personally have never paid use tax because I do not like taxation and will avoid it in any way that I can. But if I'm audited, I fully expect to pay back taxes for purchases made online through Amazon, Newegg, etc. 

 

However, Newegg isn't fully innocent in this. They should not have turned over their sales records to Connecticut so cavalierly. They are not obligated to do so until they are ordered to by a Federal court, since they have no presence in Connecticut and are therefore not governed by them. But, they are 100% not responsible for any penalties or fees owed as a result of your tax evasion. 

[CoffeeBlack]

48 minutes ago, bcredeur97 said:

if I lived in Conneticut I'd understand the bill but they shouldn't be charging the customer's the fee. They should charge Newegg the fee.

The customers were always responsible for the taxes... I understand that. But newegg should def get those fees/fines.Tech News and Reviews

 

In fact if I were a customer I would send newegg an invoice for the fee amount. Because it is their fault. lol

This is 100% wrong. Why should Newegg pay for their customer's willful tax evasion. 

[Murasaki]

What a yoke.

[plsno]

Good on Newegg. People should pay their taxes. 

[The Pikachu Mafia]

1 hour ago, CoffeeBlack said:

This is 100% wrong. Why should Newegg pay for their customer's willful tax evasion. 

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.

[Master Disaster]

 

[Thony]

20 hours ago, 91wow said:

Like someone in Illinois can't be taxed the same as someone in California on a sale. The person in Illinois makes less per hour than someone in California. 

They care about where u live ? What a BS. Tax should be tied to the place you buy from... The way it is is just confusing AF. 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...

[DoctorWho1975]

Newegg can shuck it long and shuck it hard

[2FA]

1 hour 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.

Try again: https://kb.newegg.com/Article/Index/12/3/?id=1932

[michaelocarroll007]

21 hours ago, yian88 said:

lol this should be illegal, the customer is not the one having to pay taxes on products, its the seller who includes them in the product price, i think a massive lawsuit should follow, but i know nothing about US laws so not sure what can be done

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%

[Lurick]

What would really grind my gears is they were supposedly told "Give us information or just start collecting it going forward and we'll forget the earlier stuff" and Newegg turned around and gave them the information. Is it really THAT difficult to add another state to the tax calculator during checkout?

 

Obviously the above isn't 100% confirmed but if it is, that's probably going to piss a ton of people off, not just those in CT either.

[michaelocarroll007]

1 hour 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.

But people are willfully evading taxes in this way. Your required by Law to claim the purchase of goods you didnt pay taxes on at the end of the year.  Newegg doesnt need a disclaimer its not them with this rule your state requires you to pay taxes.  Newegg was clear they dont charge tax. If your product was $20 and the checkout was $20 with 0 tax you know you didnt pay tax i believe it even shows no tax as a line item.  Many people over online internet ordering have been using online shopping to avoid paying tax on purpose and then not claiming it because they dont think the goverment will find out. 

 

If Newegg doesnt have a operating buisness in your state they dont have to charge sales tax and its up to you to claim all untaxed purchases.  No other state has done this yet but just because you or anyone else havent gotten caught doesnt make it right. I do however think the interest and or penalties should be minimal as it is the first state to actively do this and the first year to give some the benefit of the doubt. 

[DoctorWho1975]

2 minutes ago, Lurick said:

What would really grind my gears is they were supposedly told "Give us information or just start collecting it going forward and we'll forget the earlier stuff" and Newegg turned around and gave them the information. Is it really THAT difficult to add another state to the tax calculator during checkout?

 

Obviously the above isn't 100% confirmed but if it is, that's probably going to piss a ton of people off, not just those in CT either.

The quote from DRS is pretty damning:

 

“Usually we don’t have the data, but in several cases companies have said … we’ll squeal on our customers and you can beat up on them,” Sullivan said. “The people who sold to them have ratted them out.”

Either he is lying or this is in fact what the companies have done.

 

[DoctorWho1975]

I know. we should have a government number we can call to turn in someone who exchanged a good or service and possibly didn't pay a tax! "If you see a tax, squeal a tax"

[The Pikachu Mafia]

22 minutes ago, DeadEyePsycho said:

Try again: https://kb.newegg.com/Article/Index/12/3/?id=1932

 

How does that invalid what I said? I specifically said Newegg did provide a disclaimer for those 4 states, but not CT (CT = Connecticut).