Newegg and sales / use tax

[tfvc.org]

I don't know if any of you heard yet but Connecticut sent a letter to Newegg requesting customer sales records for several years, no warrant, no subpoena, and Newegg complied. Connecticut then sent letters to those customers with a tax bill. This is going to set a president and you are going to see more states doing this to more online retailers and I am sure that Oklahoma will be a part of this, so if you shop online and don't pay your use tax then start saving money for taxes now.

https://www.youtube.com/watch?v=kDUY1fxMcZk&t=487s

Apparently the [ YT ] tag doesn't work.

[oklip955]

Thanks for the heads up. I did buy a computer from them about 2 years ago. I guess I'll be one with the tax bill in the mail.

[Jersey Boss]

Keep in mind the so called use tax applies to all purchases made out of state where the tax is less than the Oklahoma tax. It is not only a mail order/ internet tax. It applies even if you make the purchase in person.

[ultimatesooner]

like our state politicians could stop worrying about their own pointless agendas long enough to do this

[Bunty]

Hopefully, a higher court, the U. S. Supreme Court, if necessary, will overrule it. I'd sooner online merchants be required to collect sales taxes. It's only fair, since local stores have to do the same thing.

[d-usa]

They can require stores to collect if they have a physical presence in the state. I don’t know if it would be constitutional to subject a business to a law if it isn’t physically located within the jurisdiction of the law.

[u50254082]

Keep in mind the so called use tax applies to all purchases made out of state where the tax is less than the Oklahoma tax. It is not only a mail order/ internet tax. It applies even if you make the purchase in person.

Huh? So if I travel to another state and buy various goods there (at a sales tax rate lower than in OK), then I owe use tax to OK?

[u50254082]

I don't know if any of you heard yet but Connecticut sent a letter to Newegg requesting customer sales records for several years, no warrant, no subpoena, and Newegg complied. Connecticut then sent letters to those customers with a tax bill. This is going to set a president and you are going to see more states doing this to more online retailers and I am sure that Oklahoma will be a part of this, so if you shop online and don't pay your use tax then start saving money for taxes now.

https://www.youtube.com/watch?v=kDUY1fxMcZk&t=487s

Apparently the [ YT ] tag doesn't work.

I'm curious what the legal requirement is for keeping track of customer purchase data? In other words, would other retailers like Overstock.com or Rakuten claim that they only hold onto 6 months worth of data to circumvent if/when states inquire?

[Jersey Boss]

Huh? So if I travel to another state and buy various goods there (at a sales tax rate lower than in OK), then I owe use tax to OK?

You sure do owe the use tax. I linked the form for your ease of use this year.

OAC 710:65 OKLAHOMA TAX COMMISSION
710:65-1-4. Presumption of taxability
(a) Sales tax. For the purpose of proper administration of the provisions of the sales and use tax laws, it is presumed that all gross receipts are subject to tax until they are shown to be tax exempt. The burden of proving that a sale of tangible personal property or enumerated service is an exempt sale is upon the vendor.
(b) Use tax. For consumer use tax purposes, it is presumed that tangible personal property sold, leased or rented by any person for delivery in this state is sold, leased or rented for storage, use or other consumption in this state. The burden of proving the contrary is on the purchaser. [See: 68 O.S. §1365]

https://www.ok.gov/tax/documents/SCU20004-12.pdf

[Jersey Boss]

http://www.tax-rates.org/oklahoma/use-tax
The Oklahoma use tax is a special excise tax assessed on property purchased for use in Oklahoma in a jurisdiction where a lower (or no) sales tax was collected on the purchase.

The Oklahoma use tax should be paid for items bought tax-free over the internet, bought while traveling, or transported into Oklahoma from a state with a lower sales tax rate.

The Oklahoma use tax rate is 4.5%, the same as the regular Oklahoma sales tax. Including local taxes, the Oklahoma use tax can be as high as 6.500%.

[Jersey Boss]

I'm curious what the legal requirement is for keeping track of customer purchase data? In other words, would other retailers like Overstock.com or Rakuten claim that they only hold onto 6 months worth of data to circumvent if/when states inquire?

Keep in mind this retailer submitted their customer data w/o a warrant or any other instrument to compel. The company also neglected to inform the customer they did this. The retailer could very well suffer the wrath and loss of business of future and past customers.

[u50254082]

http://www.tax-rates.org/oklahoma/use-tax
The Oklahoma use tax is a special excise tax assessed on property purchased for use in Oklahoma in a jurisdiction where a lower (or no) sales tax was collected on the purchase.

The Oklahoma use tax should be paid for items bought tax-free over the internet, bought while traveling, or transported into Oklahoma from a state with a lower sales tax rate.

The Oklahoma use tax rate is 4.5%, the same as the regular Oklahoma sales tax. Including local taxes, the Oklahoma use tax can be as high as 6.500%.

So then any OK resident who has ever bought groceries in TX and brought them back into OK is liable to owe use tax.

Which is absurd.

[bombermwc]

CT would have had to have had a reason to target Newegg though. For some reason they thought they had a large base to get taxes from. It's a highly inefficient method because chances are, that's not going to work again. Customer backlash would be harsh and so any company met with a request like this would force it from a legal standpoint in that it's not the company's responsibility to report it, unless the FEDERAL law says so (or the law of the company's home state).

In OK, you're technically supposed to report it, but you'll find already that the larger online retailers (and honestly the vast majority) are already collecting some tax. It may not be the full state/municipal amount though. If a law is ever put out to force online retailers to collect tax, then they have to start balancing international retailers too. The tax code just isn't set up for non-local purchasing. I dont know if a tax matrix exists for retailers to apply to their purchasing apps, but it would be unrealistic to expect them to keep up on all municipal tax code too. Personally, im betting that at some point we'll see a flat % tax for online retail goods that's paid through the existing federal tax, and the govt. would just filter that down to the state for the state to filter down to the municipalities. Direct tax from customer to municipality just isn't practical for online. But our time is coming folks. So those "tax free" online days are numbered.

[catch22]

I'll do it if they give me a tax refund if I purchase something out of state at a higher tax rate than OK

[stile99]

I think on my last trip through Texas, I bought a bottle of soda and maybe drank half of it on the way to Oklahoma, then the other half once I crossed the border.

Come at me.

[Mott]

So any out of state vacation would trigger the ‘use’ tax on money spent, whether you brought the item's home or not. But what about the taxes paid in that locale? Gambling in Las Vegas, dinner in San Francisco.

[stile99]

So any out of state vacation would trigger the ‘use’ tax on money spent, whether you brought the item's home or not.

No, it says purchased for use in Oklahoma. Dinner in San Francisco would not trigger it, ordering steaks from San Francisco to be delivered into Oklahoma would.

[Mott]

Thank’s for that!

[BBatesokc]

Another good reason to use cash for in person purchases.

NewEgg doesn't collect your SSN. CT is going to get your billing name and shipping address. Is it seriously worth the effort to try and match each and every sales receipt to a specific person and their tax history?

What if all they get is a name and a PO Box or a work address? How much effort are they going to put in figuring out who John Doe at PO Box 253 or who works at XYZ corporation is so they can get their $20?

Sounds like a good excuse to come up with as company that simply acts as a go-between for "anonymous" online sales.

[tfvc.org]

CT would have had to have had a reason to target Newegg though. For some reason they thought they had a large base to get taxes from. It's a highly inefficient method because chances are, that's not going to work again. Customer backlash would be harsh and so any company met with a request like this would force it from a legal standpoint in that it's not the company's responsibility to report it, unless the FEDERAL law says so (or the law of the company's home state).

In OK, you're technically supposed to report it, but you'll find already that the larger online retailers (and honestly the vast majority) are already collecting some tax. It may not be the full state/municipal amount though. If a law is ever put out to force online retailers to collect tax, then they have to start balancing international retailers too. The tax code just isn't set up for non-local purchasing. I dont know if a tax matrix exists for retailers to apply to their purchasing apps, but it would be unrealistic to expect them to keep up on all municipal tax code too. Personally, im betting that at some point we'll see a flat % tax for online retail goods that's paid through the existing federal tax, and the govt. would just filter that down to the state for the state to filter down to the municipalities. Direct tax from customer to municipality just isn't practical for online. But our time is coming folks. So those "tax free" online days are numbered.

Lon interviewed the CT tax commissioner and apparently they sent letters out to some of the largest online retailers so Newegg wasn't targeted specifically. Newegg just chose the easiest way out and also didn't inform their customers what they did, wich to me seems sarmy and makes me not want to do business with them.

https://www.youtube.com/watch?v=Jk1VWpLMx-g

[u50254082]

Lon interviewed the CT tax commissioner and apparently they sent letters out to some of the largest online retailers so Newegg wasn't targeted specifically. Newegg just chose the easiest way out and also didn't inform their customers what they did, wich to me seems sarmy and makes me not want to do business with them.

https://www.youtube.com/watch?v=Jk1VWpLMx-g

Unless you need to buy really specific computer related items, Amazon almost always has them beat on price (and delivery if you have Prime). And I guess a "benefit" is that you'll pay sales tax on Amazon so at least it's transparent.

[d-usa]

Newegg used to be a lot better, and you got great service and warranties for the higher prices. But that’s no longer the case.

[tfvc.org]

I still shop on Newegg, but I also price compare on ebay, amazon, and a few others. Newegg hasn't been the same since they started selling more than computer parts and let third parties in. Amazon has been slipping as well because they have let international sellers in and you can't tell if an item is coming from Asia. I have bought two items so far that came from China, and one took over three weeks to get (just got it today in fact) and I needed it three weeks ago, and I haven't found a way to tell if it is a US seller or not. I don't buy much online, especially from Amazon, so I don't feel the need to pay for Prime either.

[u50254082]

Tfvc you are correct that the non US sellers have started flooding Amazon. On eBay they often claim to be US based but still ship items from China. Or in some cases they have a small US based warehouse and have a cousin or someone ship the item out. This is slightly better but God forbid you have to communicate with the seller about a return or exchange.

I have stopped believing the sellers on all platforms and only buy if I can tell the seller is US based either because it has Prime fulfillment or the seller's business name references back to a US based commerce site.

All I can say is use that seller feedback rating on whichever site and let others know that they ship slow and it comes from halfway around the world.

[tfvc.org]

Tfvc you are correct that the non US sellers have started flooding Amazon. On eBay they often claim to be US based but still ship items from China. Or in some cases they have a small US based warehouse and have a cousin or someone ship the item out. This is slightly better but God forbid you have to communicate with the seller about a return or exchange.

I have stopped believing the sellers on all platforms and only buy if I can tell the seller is US based either because it has Prime fulfillment or the seller's business name references back to a US based commerce site.

All I can say is use that seller feedback rating on whichever site and let others know that they ship slow and it comes from halfway around the world.

Oh, I have been burned by that a few times. I will buy from China if time isn't of importance and I just want it cheap. If I have a need to have it in a ~week (don't get me started about those ultra slow smartpost shippers) then I will look for US sellers, anymore I will look to see if a state is listed or if it says anywhere USA and use that as a flag to move on and read feedback as well.

It also bothers me that there are ebay sellers that use Amazon as a drop ship service. Every time I have given them one star saying that I didn't want to buy it from Amazon.