Newegg Rats Out Consumers to Conn. Over Taxes

GURPS

GURPS

INGSOC
PREMO Member
Kevin Sullivan, commissioner of the tax department, said it’s part of an effort to ramp-up collection of the use tax; Connecticut taxpayers are supposed to pay the state a 6.35 percent tax on any purchases made out-of-state or online where no sales tax is paid, but the vast majority do not.

“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.”

A tax expert in Washington, D.C., said Connecticut is the first state to take this approach: requesting data from retailers about online purchases by state residents that were not subject to sales tax and checking to see if the customers made required tax payments.

An estimated $70 million of the use tax is evaded in Connecticut annually and compliance with the tax stands at about 12 percent, according to the department.

“The states at large have been reticent to pursue customers for use tax,” said Stephen P. Kranz, a partner and tax attorney at McDermott Will & Emery, a Washington, D.C. law firm. “It’s much easier from an efficiency perspective to get the retailer to collect the tax. But data makes it possible to pursue customers, and Connecticut is the first state to go down that path in a real way.”

Several taxpayers told The Courant they received letters from the Department of Revenue Services this week detailing information about purchases they made from Newegg, an online retailer of computer components and other electronics headquartered in California.



Connecticut Hunting Down Online Shoppers Who Didn't Pay Sales Tax


Well you get the Gov. you vote for ....
I'm waiting For MD to take up this tactic ....
 
GURPS

GURPS

INGSOC
PREMO Member
Connecticut Will Make You Disclose Personal Customer Data!


The Connecticut Department of Revenue Services (DRS) recently issued demand letters to many remote sellers requiring that they either: (a) provide electronic sales records for all individual sales shipped to a Connecticut address over the past three calendar years; or (b) register to collect and remit Connecticut sales and use tax. This action is consistent with statements made by DRS Commissioner, Kevin Sullivan, via a press release in March and more recently at a Federation of Tax Administrator’s (FTA) presentation on the topic two weeks ago. Sullivan’s comments at the FTA meeting indicated that state tax administrators “will move from hoping Congress will help” to taking action into their own hands.

For remote sellers with no physical presence in Connecticut that don’t wish to voluntarily collect and remit sales and use tax (consistent with the US Supreme Court’s precedent in Quill and Bellas Hess), they are given only one option–provide DRS with a semi-colon delimited text file containing 16 fields of data–including customer names, customer addresses, ship to addresses, item descriptions and quantities sold. But supplying such personal data about customers intrudes upon the privacy and First Amendment rights of the customer, and unconstitutionally deprives remote sellers of their property right in the data set without due process of law. Of equal concern, some sellers question whether DRS is appropriately limited in its ability to disclose or share the customer data it seeks.

First, disclosure of the records DRS is requesting from remote sellers would be a significant intrusion on their customers’ privacy. The records requested include disclosure of customer names, addresses, shipping state, sales price and specific product(s) purchased. This can be highly sensitive information. Merely linking a particular online retailer to a specific customer may reveal information about the customer’s health issues, political leanings, sexual orientation, personal tastes and financial circumstances. By collecting shipping addresses, DRS will learn when an individual has a gift purchase delivered to a different address, revealing what could be a personal (and highly private) relationship. Moreover, some sellers question whether Connecticut law adequately protects the confidentiality of the information DRS is attempting to collect, leaving the possibility that the information could be shared with other government agencies and potentially used for purposes other than collection of sales and use tax.

Second, for remote sellers that offer books, music, videos and other forms of expressive content, the DRS request violates the customers’ First Amendment protections. In 2010, a US District Court held that an online retailer’s North Carolina customers’ First Amendment rights were implicated by a similar content disclosure requirement on audit. See Amazon.com LLC v. Lay, 758 F. Supp. 2d 1154, 1169 (W.D. Wash. 2010). The First Amendment protects a buyer from having the expressive content of that buyer’s purchase of books, music and audiovisual material disclosed to the government. Thus, First Amendment rights are implicated when the government seeks disclosure of reading, listening and viewing habits. As a result, the North Carolina Department of Revenue was enjoined from requesting customer identifying information from the online retailer. The same prohibition upheld by the federal district court should apply to DRS here. Beyond the First Amendment, the Connecticut Constitution itself offers similar protections that speak against the state’s ability to obtain such information. See Conn. Const. art. I, §§ 4-5.
 
vraiblonde

vraiblonde

Board Mommy
PREMO Member
Patron
Wait, why should a state be able to collect sales tax on a product they had absolutely nothing to do with? Didn't produce it, didn't sell it, wasn't even bought in their state. Why should they get a dime of money from that sale?
 
GURPS

GURPS

INGSOC
PREMO Member
vraiblonde said:
Wait, why should a state be able to collect sales tax on a product they had absolutely nothing to do with? Didn't produce it, didn't sell it, wasn't even bought in their state. Why should they get a dime of money from that sale?
Click to expand...

Use TAX .... designed to 'level' the playing field if you purchase items out of state at NO Tax or Sales Tax less than your current state

a back handed way to encourage one to 'buy' locally instead of across state lines cheaper somewhere else
this used to be difficult or impossible to police, short of having revenue agents at the Best Buy across the state line, but computers and the Internet make it much easier



I think some states stake out those 'discount' cigarettes places near borders ...
 
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