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

[airdeano]

you'll wanna check with your state/county tax departments as here in arkansas it is publically unknown, but there is a small snippet in the tax code of the state which states all residences are responsible for all state taxes of purchased goods, regardless of sales origin.

so yes, you'd include it in any tax filing with the state/county treasurer.

walmart and amazon are next, watch.. they've been fighting this for a bit and not winning.

[Jito463]

3 hours ago, djdwosk97 said:

Well, Newegg only charges tax in NJ, CA, IN, and I believe one other state as that is where they have warehouses. Every other shipping destination is exempty from tax as there is no warehouse in-state. So there was probably some odd thing with CT (maybe there's a warehouse there, or maybe CT law requires taxes even without a warehouse), and they were just trying to avoid it (and breaking tax law in the process) and now just trying to shift the problem to the consumers?

State taxes are only charged when the entire transaction takes place within the state (meaning, both the business and the customer have a physical presence there).  Most states have a law whereby residents of the state are supposed to self-report any online purchases and pay sales tax at the end of the year, though it's typically completely voluntary.  It sounds to me like Connecticut is taking proactive measures to force people into paying sales tax on their online purchases.  I don't blame Newegg on this, as they're just reporting purchases made by their customers within the state.  If anything, I blame the revenue department of CT for being jerks about it, even if it's "legally" correct.

[Donut417]

3 hours ago, RKRiley said:

I still get confused by taxes in the US lol, why don't you just pay them automatically(included in the price) on goods?

Like here in the UK, anything you buy the price already has the 20% tax accounted for.

 

Or am i missing the point and that's what Newegg should have been doing anyway, but they failed to do so?

50 states, 50 individual tax laws. Its not like the UK where you have VAT. None of these taxes are Federal. Its hard for Michigan for instance to insist Newegg collects tax, when Newegg does not have any offices in Michigan. Then you got some states like South Dakota who have no sales tax, and states like Tennessee which offer a tax free weekend or week every year. Not easy for them to collect tax. In many states like Michigan unless they operate with in the states borders they dont collect sales tax, its up to the citizens of the state to claim the tax in their Income tax each year. 

[Taf the Ghost]

44 minutes ago, Donut417 said:

50 states, 50 individual tax laws. Its not like the UK where you have VAT. None of these taxes are Federal. Its hard for Michigan for instance to insist Newegg collects tax, when Newegg does not have any offices in Michigan. Then you got some states like South Dakota who have no sales tax, and states like Tennessee which offer a tax free weekend or week every year. Not easy for them to collect tax. In many states like Michigan unless they operate with in the states borders they dont collect sales tax, its up to the citizens of the state to claim the tax in their Income tax each year. 

You also have to add in DC and the other territories. Then, it gets really fun! A bunch of states have multiple Sales Tax jurisdictions. I can't find the stat right now, but I saw it listed as over 3000 total tax rates one time. That might be high, but it's at least well over 500.

[handymanshandle]

TAXATION IS THEFT REEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

Well I mean it is...

 

But Connecticut seems like a greedy state so it doesn't surprise me.

 

CT might have some rule that allows them to tax any goods that are shipped into the state. Hopefully MNDOR (Minnesota Department of Revenue) gets any bright ideas and decides to subpoena Newegg or Valve.

 

Wonder if the DRS is looking into B&H too lol.

[Donut417]

Im kinda surprise Newegg gave them the info. Its not like they operate in the state. The state cant block Newegg's website or stop it shipping packages to it. Interstate Commerce is under Federal authority. Even if a CT court issued an order, thats only effective in CT, not in California where Newegg is HQed. I personally would have told the state to blow it out its ass and said if they have an issue they can take it before a Federal Judge, as only the Federal courts have jurisdiction here. 

[descendency]

3 hours ago, Kierax said:

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

I hear they have a tech supply chain expert in house. . . maybe they could get a deal on one going under, say NCIX, and have one of their staffers run it... say Linus. 

 

Does that sound like a good plan?

[Zodiark1593]

29 minutes ago, wcreek said:

TAXATION IS THEFT REEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

Well I mean it is...

 

But Connecticut seems like a greedy state so it doesn't surprise me.

 

CT might have some rule that allows them to tax any goods that are shipped into the state. Hopefully MNDOR (Minnesota Department of Revenue) gets any bright ideas and decides to subpoena Newegg or Valve.

 

Wonder if the DRS is looking into B&H too lol.

Hmm...

 

*considers starting games-filled flash drive smuggling operation*

[Misanthrope]

Seems like a lot of effort for basically chump change in the grand scheme of things. Also I think Newegg could have at least let customers know they were either forced to comply or that they were ratting them out, bad move all around from everybody.

[Zodiark1593]

Just now, Misanthrope said:

Seems like a lot of effort for basically chump change in the grand scheme of things. Also I think Newegg could have at least let customers know they were either forced to comply or that they were ratting them out, bad move all around from everybody.

Sending a threatening letter isn't all that much effort tbh. Most people are likely to pay up instead of facing the prospect of facing the Taxman's wrath.

[NvidiaIntelAMDLoveTriangle]

5 hours ago, 91wow said:

Taxes are handled so differently on so many things in the US. You have state sales tax, you have federal tax, you have shipping tax, you have handling charges. So much changes and since we don't really have a federal minimum wage they can't just charge one universal fee that everyone has to pay. The quality of life changes dramatically across the different states. 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. It just wouldn't be fair. So some states have sale taxes and internet sale taxes, some don't have either. But, all states have internet sale tax if the business has a footprint in the state, so if I lived in Nevada I wouldn't pay any sales taxes on ordering from Newegg, but since they are located in California I do pay those taxes. 

Honestly that's a broken system. While on paper it may sound good, in reality it's bad.

[Misanthrope]

3 minutes ago, Zodiark1593 said:

Sending a threatening letter isn't all that much effort tbh. Most people are likely to pay up instead of facing the prospect of facing the Taxman's wrath.

Well I guess it depends on how much they spend but I doubt most people bought much all things considered. I guess we'd have to look at how many get intimidated about this 'Pay us 40 bucks of taxes on your GPU purchase from 2 years ago!" which I imagine would be he average and not many people are likely to bother.

[NvidiaIntelAMDLoveTriangle]

45 minutes ago, Donut417 said:

Im kinda surprise Newegg gave them the info. Its not like they operate in the state. The state cant block Newegg's website or stop it shipping packages to it. Interstate Commerce is under Federal authority. Even if a CT court issued an order, thats only effective in CT, not in California where Newegg is HQed. I personally would have told the state to blow it out its ass and said if they have an issue they can take it before a Federal Judge, as only the Federal courts have jurisdiction here. 

This is how it went down:

DRS: Hey give us all the info or pay this ridiculously large fine.

Newegg: Ok, here's all the info on everyone. Have a nice day.

 

[Donut417]

Just now, NvidiaIntelAMDLoveTriangle said:

This is how it went down:

DRS: Hey give us all the info or pay this ridiculously large fine.

Newegg: Ok, here's all the info on everyone. Have a nice day.

 

Newegg doesn't operate in that state. They cant compel shit. Newegg could tell them to pound sand. They would have to take Newegg to Federal court. Anything that crosses state lines tends to be a "Federal" matter.

[Zodiark1593]

1 minute ago, Misanthrope said:

Well I guess it depends on how much they spend but I doubt most people bought much all things considered. I guess we'd have to look at how many get intimidated about this 'Pay us 40 bucks of taxes on your GPU purchase from 2 years ago!" which I imagine would be he average and not many people are likely to bother.

The amount in and of itself isn't likely to cause alarm, so much as the fact that it is from a tax agency. I don't think many people desire to wind up in the crosshairs of a tax agency, even if the amount owed is of little consequence.

[NvidiaIntelAMDLoveTriangle]

2 minutes ago, Donut417 said:

Newegg doesn't operate in that state. They cant compel shit. Newegg could tell them to pound sand. They would have to take Newegg to Federal court. Anything that crosses state lines tends to be a "Federal" matter.

It doesn't matter if they don't operate in that state. When an agency of the government or a goverment comes to you with two options, you always pick the option that doesn't directly screw you.

In this case Newegg picked to give them the info rather than pay a lot of money themselves.

[SpaceGhostC2C]

7 minutes ago, Donut417 said:

Newegg doesn't operate in that state. They cant compel shit. Newegg could tell them to pound sand. They would have to take Newegg to Federal court. Anything that crosses state lines tends to be a "Federal" matter.

The thing is, the state government can sue them in Antarctica if needed, it's not like it's going to cost them extra money (nor that the person making the decision would pay it from her pocket if it did) or time. It's the tax collection agency, collecting taxes by all means necessary is what they do with their regular staff already. Meanwhile, Newegg would face whatever legal costs ensue from that, and for what? They are not claiming Newegg owes them any money.

"Sue me" may seem like a badass-edgy reply when that's the last thing you expect the other person to do. But if the other person will actually obey you and sue, then it no longer is such a great idea  

[Donut417]

Just now, NvidiaIntelAMDLoveTriangle said:

It doesn't matter if they don't operate in that state. When an agency of the government or a goverment comes to you with two options, you always pick the option that doesn't directly screw you.

In this case Newegg picked to give them the info rather than pay a lot of money themselves.

CT tax man cant cross state lines. They only have power with in their borders. They cant make Newegg Pay shit. In order for them do make Newegg pay something, they have to take it to Federal Court. 

[Taf the Ghost]

1 hour ago, wcreek said:

TAXATION IS THEFT REEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

Well I mean it is...

 

But Connecticut seems like a greedy state so it doesn't surprise me.

 

CT might have some rule that allows them to tax any goods that are shipped into the state. Hopefully MNDOR (Minnesota Department of Revenue) gets any bright ideas and decides to subpoena Newegg or Valve.

 

Wonder if the DRS is looking into B&H too lol.

Oh yeah, also, CT is really broke right now.

[Blademaster91]

52 minutes ago, Misanthrope said:

Well I guess it depends on how much they spend but I doubt most people bought much all things considered. I guess we'd have to look at how many get intimidated about this 'Pay us 40 bucks of taxes on your GPU purchase from 2 years ago!" which I imagine would be he average and not many people are likely to bother.

Some states greedy enough or in a severe deficit for money go to the effort of BS like this,my state complained and got into the tax loophole because oh no Amazon hurts local business too much we need to charge local tax, even though they have no Amazon operations in the state to collect tax on.

39 minutes ago, NvidiaIntelAMDLoveTriangle said:

It doesn't matter if they don't operate in that state. When an agency of the government or a goverment comes to you with two options, you always pick the option that doesn't directly screw you.

In this case Newegg picked to give them the info rather than pay a lot of money themselves.

The state government can't legally collect tax if the retailer doesn't operate in that state. If they really wanted small change from people who bought a few parts years ago,they would have done more instead of waiting to send out threatening letters.

[Eaglerino]

6 hours ago, RKRiley said:

I still get confused by taxes in the US lol, why don't you just pay them automatically(included in the price) on goods?

Like here in the UK, anything you buy the price already has the 20% tax accounted for.

 

Or am i missing the point and that's what Newegg should have been doing anyway, but they failed to do so?

Dear dog, 20%? My state's sales tax is 4%

[iamdarkyoshi]

6 hours ago, RKRiley said:

I still get confused by taxes in the US lol, why don't you just pay them automatically(included in the price) on goods?

Like here in the UK, anything you buy the price already has the 20% tax accounted for.

 

Or am i missing the point and that's what Newegg should have been doing anyway, but they failed to do so?

Because we're the US and like doing things wrong.

 

See:

Measurements

Date formats

Taxes

Spelling

Mains voltages

etc...

[Mihle]

6 hours ago, 91wow said:

Taxes are handled so differently on so many things in the US. You have state sales tax, you have federal tax, you have shipping tax, you have handling charges. So much changes and since we don't really have a federal minimum wage they can't just charge one universal fee that everyone has to pay. The quality of life changes dramatically across the different states. 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. It just wouldn't be fair. So some states have sale taxes and internet sale taxes, some don't have either. But, all states have internet sale tax if the business has a footprint in the state, so if I lived in Nevada I wouldn't pay any sales taxes on ordering from Newegg, but since they are located in California I do pay those taxes. 

Could still be included in the price by law it would just be more work for the stores and they have to know what state you buy from.

[Evanair]

I'm really surprised more by the responses here. When you file your taxes, there is a spot for items purchased out of state that you paid no taxes on and had shipped to you. 

 

Type in your receipt amounts and it calculates tax based on your home of record. 

 

It's the law, burden is on the purchaser, not the company. it's also spelled out on your receipts during purchase that certain state taxes are required to be paid when filing taxes.

 

This isn't just newegg and it's nothing new.

[gamerking]

this is why when i have stuff from amazon or any online shipping place i use Ship to "current " "resident " have fun NY state getting anything from that person . (they will try this i know anything to fill the confers) . really makes no sense order the same thing twice in a week and one gets charged tax other doesn't but both come from the same location . will laugh if newegg (Connecticut state)  sends me that letter already know what im going back instead . before anyone gets the wrong idea its only liquid ass .