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Newegg Lied to CT Customers, Turned Over Customer Data to Tax Authorities


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This has been and will continue to be an issue. All states treat sales tax issues differently and online sales have been a major source of controversy. Generally, most states do not require online retailers to collect taxes unless they have a physical presence in the state. This is seen as an unfair price advantage to online retailers versus brick and mortar stores. I believe there are cases in front of the US Supreme Court on this topic. Some states require that you pay sales/use tax on your online purchases, Connecticut is one and is one of the most aggressive. It is interesting that this only went back to 2014, but a quick Google search shows Connecticut required Amazon to start collecting taxes in November of 2013.
A state can subpoena information, but they first ask via a letter. Lon seems upset Newegg did not fight this, why would they? Lon seems to admit that he knew he owed use tax but had not paid it.
If this is a literal quote, this person is a buffoon: 
“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 you read the entire story Connecticut is going after all major online retailers:
Instead of demonizing Newegg, I would encourage people to check how your state defines sales and use taxes. If Connecticut is successful, other states will follow their lead. Here is Minnesota’s:

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I haven't watched this clip yet Schoon but thanks for that insightful follow up. Very informative and encourages me to dig in a little bit.


Indiana has Amazon stores and warehouses as does Newegg so we have been used to sales tax. However, if a small business such as myself purchases gear for the business and tax is not levied, we are required to report and pay use tax. Not sure what was discussed there but that is a no brainer ultimately requiring the business to pay tax even though it was not charged at time of purchase.



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