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Newegg Shows It’s True Colors In Connecticut Sales Tax Furore

Newegg, Not Sales Tax Free

Pre-2014, I used to buy my tech from Newegg quite frequently, but stopped buying from the company in 2014, no-idea why, I just started shopping at Amazon and never looked back. And, I am so happy that I did, given the current anger at Newegg in regard to handing over customer details of people living in Connecticut, now Newegg shoppers from CT are being hit by a sales tax bill for 2014, 2015 and 2016.

To be clear, if you buy out of state and don’t pay sales tax, you need to declare the value of items you did not pay sales tax in your tax filings and pay any owed taxes. That said, I would guess the majority of people either think that tax is included or assumed that because it was bought out of state, it’s sales tax free. I fall into the former category, I come from a country where sales tax is always included in the price.

Newegg could have easily fixed this, by charging sales tax on all items sold on their website in future, but they refused to do that, instead giving the state of Connecticut details of all sales to CT residents from the tax years 2014 – 2016. This was based upon a letter from the state of CT, not a subpoena or legal document, selling their Connecticut customers down the river, this is why customers are so pissed.

Now, the precedent has been set, you can bet your bottom dollar that other states will follow suit, including the state of Kansas, where I currently reside. Thankfully, I stopped buying from Newegg prior to 2014, so I should not be affected by this, unless, of course, Kansas requests details of sales from before the 2014 tax year, I don’t know if there is a statute of limitation on back sales tax?

It would be so simple to fix this; we need a federal regulation that mandates that companies selling to US customers have to charge sales tax at the rate of the state or city of the delivery address. It will raise the overall price at the time of sale, obviously, but that’s better than spending, say $2,500 ex sales tax, and paying back sales tax of $187.50 years later, this would be an example of Kansas, which has a 7.5% tax.

I hope that Newegg customers decide to shop elsewhere as the company has sent a clear message that they don’t care about their customers, giving away your private information without any legal requirement instead of either fighting the information request or simply charge sales tax going forward.

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