[CT_Yank]

Must have missed this but CT DRS is going after online retailers to get 5 years of CT resident sales data. I don't shop Newegg much but they sent email to me stating they turned records over. I purchased a couple hundred worth of computer stuff in 2014. Guess I will wait this one out. Goodbye Newegg.

[nep321]

I am a sales and use tax analyst for a global top notch finance company. Please listen to me.

If an online retailer has any nexus (usually property or employees or other reasons) in CT, they are required to register for a sales tax permit and charge sales tax on customer purchases (on the invoice). Then, usually each month, the retailer will file a sales and use tax return and remit the sales tax to the CT Department of Revenue. If the retailer has NO nexus in CT, they are NOT required to charge and collect sales tax from the customer, even if the customer is purchasing items that would normally be subject to sales tax in CT.

Now, this does NOT mean that the customer should not pay the sales tax. The customer is STILL liable for the sales tax in the form of "use" tax. Use tax is the sales tax that a customer must pay (self-assessed) on any purchases in which the vendor did not collect sales tax for taxable goods or services. Therefore, if the purchase was taxable, you must pay use tax to the state of CT. You can report and pay the use tax on your annual individual income tax return for CT. There is a line for it. So let's say you bought a TV from Amazon for $1,000 and Amazon did not charge sales tax. Well, TV's are taxable tangible goods in CT and subject to the 6.35% rate. So you would have to pay $63.50 of use tax for the TV purchase to the state of CT on your tax return. That's how it works, but it's not strictly enforced. EVEN IF you buy something from another state and have it delivered to your CT home and intend to use the item in your CT home, you owe use tax, if the vendor didn't charge you sales tax. But you would be allowed a credit for the sales tax paid to the vendor if the sale occurred at a physical retailer location, thereby reducing your CT tax liability possibly to zero.

So, what I do is save my invoices from online purchases that didn't charge sales tax (for taxable items) over the course of the year. Then, at the end of the year, when I go to file my CT income tax return, I calculate the use tax due and pay it on my return. I just filed my CT return this week and paid $163 in use tax to the state of CT for items I bought in CT last year on Amazon.

That's how it works. It's not just a Newegg thing. It's the law!

[CT_Yank]

Thanks, nep. In the past, I shopped dozens of online retailers so not easy to remember which ones collected tax and which did not. I am almost all Amazon lately so I know they collect tax. Another thing for consumer to worry about and quite honestly low hanging fruit compared to waste and fraud everywhere in the state but that's CT - focus on small revenue than large spending.

[Smooth21]

This will be a fun one for me. I've made a handful of NewEgg purchases for work over the past five years, some on my personal card that I was reimbursed for and some on a work credit card. Nothing I've purchased from NewEgg has been for personal use. I guess I'm going to have to ask my company to further reimburse me for the taxes I'll have to pay.

[MrGompers]

Most likely there will be a way to appeal. I bought stuff from newegg during the last two years, but if I owe any tax it will be minimal.

[Scottamemnon]

Rather than being jerks about it and spending a fortune on analysis, why don't they just do what Massachusetts does and have an annual "look the other way" amount you can pay on your taxes based on your income. For the average worker, the line item is pretty small on your taxes.. i think it was like $20 for me the last time I had to pay it(before online started paying tax). Audits are expensive to get sales taxes out of citizens.

[BPt111]

CT hungry for new revenue

[MrGompers]

Originally Posted by Scottamemnon

Rather than being jerks about it and spending a fortune on analysis, why don't they just do what Massachusetts does and have an annual "look the other way" amount you can pay on your taxes based on your income. For the average worker, the line item is pretty small on your taxes.. i think it was like $20 for me the last time I had to pay it(before online started paying tax). Audits are expensive to get sales taxes out of citizens.

I'd be surprised if the DRS invested more than a days work in cross referencing the data. They would only have to cross reference the names and addresses on the first run. What ever bounces out will need more analysis, but they may even give up at that point, since it wouldn't make much sense to track someone down who moved to Texas to collect $15.

They will definitely go for the low hanging fruit first. Someone I know got some type of use tax bill from the DRS some years ago, it was for a camera he bought on amazon I think. He told them the purchase was a gift to someone out of state and he never heard from DRS again. That's why I think there will be a way to appeal, especially if the dollar amount is low.

When it really comes down to it, they can't prove you are using a product in state unless they come see it at your house (such as a computer). I don't think DRS has the staff for that.

[Scottamemnon]

Originally Posted by MrGompers

I'd be surprised if the DRS invested more than a days work in cross referencing the data. They would only have to cross reference the names and addresses on the first run. What ever bounces out will need more analysis, but they may even give up at that point, since it wouldn't make much sense to track someone down who moved to Texas to collect $15.

They will definitely go for the low hanging fruit first. Someone I know got some type of use tax bill from the DRS some years ago, it was for a camera he bought on amazon I think. He told them the purchase was a gift to someone out of state and he never heard from DRS again. That's why I think there will be a way to appeal, especially if the dollar amount is low.

When it really comes down to it, they can't prove you are using a product in state unless they come see it at your house (such as a computer). I don't think DRS has the staff for that.

I think you are grossly underestimating the amount of work involved. I guarantee you Newegg will send them the actual receipts, not their database. The database is a corporate trade secret and they would not be required to turn it over. So now you have thousands of individual documents. If I were newegg I would send them in paper form, just to stick it to the state for the amount of time and money they will need to spend to get the data together for them.. since we are talking 5 years.

So now you need low level clerks to scan the documents. Next you need IT to write some sort of code to scan for names and addresses and to collect them. This requires software testing. Easily probably 6 months of IT work since we are talking financial records and the potential for lawsuits if they screw it up being so immense. Even a single Agile team would be a huge amount of money spent on this project.

So how much money was spent on newegg in CT in the past 5 years? How much revenue will they find? This is a wild goose chase that will cost the state money, guaranteed. There is a reason why Massachusetts started that option, even with New Hampshire so close with its 0% sales tax.

[davwve]

Originally Posted by Scottamemnon

So now you need low level clerks to scan the documents. Next you need IT to write some sort of code to scan for names and addresses and to collect them. This requires software testing. Easily probably 6 months of IT work since we are talking financial records and the potential for lawsuits if they screw it up being so immense. Even a single Agile team would be a huge amount of money spent on this project.

Assuming their receipts all use the same structured format it should be less than 2 DEV weeks before having it out to validation testing. But, since it is a gov. agency 6-12 months sounds about right. If the documents are scanned then the quality of scan will be a dependent factor for OCR.