I recently received an email from Newegg.com, telling me that they were required by Connecticut law to report the total cash spent by me on their site for a three year period. Here is their letter:
Dear Mr. (Name redacted),
IMPORTANT NOTICE TO CONNECTICUT CUSTOMERS.
A recent Connecticut law requires Newegg to disclose the amount you spent with us for the years 2014, 2015 and 2016. We do not collect sales tax on behalf of the state, but customers are required to file a sales or use tax form and pay tax on all taxable purchases.
During that three year period, you purchased the following amounts from us for use in Connecticut:
- 2014 total $3X.XX (Amount partially redacted)
- 2015 total $0.00
- 2016 total $0.00
In accordance with the new law, Newegg provided the Connecticut Department of Revenue Services with the total dollar amount of purchases made by you during these years, but no information about your purchased item(s) other than the dollar amount of the purchase(s) has been provided.
You may find details of how and when you must file your return at the Connecticut Department of Revenue Services' website: www.ct.gov/drs.
Thank you for shopping at Newegg.
Ina, this may be the beginning of an onslaught of similar notices to online customers of many, many more websites from a growing number of states. So far Newegg is the only online marketplace to have sent me such a notice, but I suspect this is just the first of many more to come.
What does this mean for the future health of online shopping? How serious will CT and other states be in collecting tax payments from customers, like me, who were turned in by out-of-state online marketplaces? Also, will penalties and/or fines for late sales tax payment be levied by the states? These are serious questions, especially for BIG online spenders!
Connecticut is teetering on the edge of bankruptcy with ever-growing spending and HUGE unfunded future liabilities, so I'm not surprised by this.
I wonder if other poorly run states are strong-arming online companies like Newegg into turning in their customers who, like me, won't buy from them ever again.
Do you think Connecticut's move to claw back use tax on online purchases going back to 2014 could adversely impact sales from frightened buyers? See more information in this article from yesterday's Newsflash.