Gadgetory

what's up everyone Jase $0.02 here we're gonna do a talking head video a very simple one with some important information that I want to get out there so I'm not gonna be adding music or transitions or any of that so you don't even need to look at this just minimize it and listen why you go on about your business because this this one's kind of important this could affect all of us especially moving into the future last Thursday while doing tech talk Jerry and I reached out to the audience asking if there was any topics they wanted us to talk about before we signed off for the evening and one user asked me Jay how do you feel about what Newegg is doing regarding collecting back taxes on sales for previous years I was like what are you talking about so we did a quick search we couldn't really come up with any concrete information but some of the users started telling us this was something going on in the state of Connecticut well fast-forward a few days my inbox my mailbox my Twitter feed everything blew up with people sending me links to articles and even links to pictures of the Connecticut Department of servitor Revenue trying to collect back taxes from customers who bought product from Newegg does a couple things with dimension before we talk about what happened and what this means for the future one I'm not a CPA I am NOT a tax advisor I am NOT providing you any financial advice I'm not providing you any tax prep advice that is all between you and your tax preparers and your CPA so do not take this video as an advice piece this is nothing more than an informational piece and now that I've covered my ass we could talk about what has allegedly happened I'm gonna say that word a lot because allegedly is important that's a legal term allegedly Newegg received a letter from the Connecticut Department of Revenue requesting user data from anyone who bought product from Newegg and had it shipped to the state of Connecticut the requested that data for tax year is 2014 2015 and 2016 the reason why having collected collected 2017 yet is because technically those don't have to be filed yet so what they're trying to do is recover a lot of the seventy million dollars a year that the state of Connecticut estimates they lose for people not providing sales tax or use tax on their tax returns what that means is if you buy something from out of state that does not collect sales tax then you have to pay what's called a use tax on that and that is based upon your state in its statues and because we have 50 states in the United States there are going to be variations of how this is collected and what you're on the hook for so that's why this is a very difficult video to see how it's gonna apply to all of you simply because if you live in the United States or even a US territory then it's going to be very very convoluted trying to apply this to everybody so that's why we're just sort of giving you a high-level video here on what's going on so back to what happened Connecticut sent a letter to Nu ake a letter not a subpoena now this is according to information I found online this was not an official subpoena which is required by court to send this information the state of Department revenue simply asked Newegg hey buddy buddy old pal do me a favor send me all the user data for people who bought stuff in the state of Connecticut through Newegg online so that we can go and send them letter saying hey you owe us taxes or now this is a big alleged here I found multiple sources saying this including some news articles that talked directly to the Connecticut Department of Revenue saying or forget all that just start collecting sales tax for stuff that gets sent to Connecticut we'll call it even and it will take care of itself in the future well apparently Newegg didn't want to set any of that up and did want to start collecting sales tax for the state so they rolled and provide all of the customer data for those three years to the state of Connecticut which then started sending tax collection letters to every customer who bought something from Newegg in Connecticut for those three years now based on the letters people have been sending me showing me with their name blurred out but showing me that all of the the forms I've seen dozens of these forms now the state is collecting either a hundred bucks 300 bucks in some cases a couple thousand dollars from people running businesses and stuff out of Connecticut buying stuff for their business through Newegg now suddenly collecting taxes on that now before we move forward let's talk about the states that knew a currently collects sales tax from that being California Washington Indiana New Jersey Pennsylvania and Tennessee that's more than likely because they have a nexus or it means they have a location in that state it doesn't have to be a brick-and-mortar that'll be a store you can walk into it buy something it simply means that company has a registered address in that state providing some sort of business more than likely these are their warehouses where they're shipping from different parts of the country California is obviously where New Vegas based so that one's pretty much a given but if you live in those states right now and you buy something from Newegg they're going to apply sales tax and it's gonna be based on your current zip code I don't know if you guys know this but there's a sales tax a flat rate sales tax and then each city or municipality can offer or even County can have additional taxes on top of that so here in California can range anywhere from seven-and-a-half percent all the way up to ten and a half percent depending on where so you plug in your zip code anyway calculates it it's based on where you live and where it's being shipped to that's how tax is collected furthermore there are states that actually require Newegg to supply the customer with a report of an annual report of what they purchased because you are still on the hook for use tax or the use tax is just another word for sales tax where the state says hey you bought something from out-of-state you owe taxes on what you bought sales tax and you're supposed to file it on your tax returns that is pretty much what a use tax is to put it in the perspective I bought my fs5 from a company in Oklahoma when I bought it they provided me with a tax form saying here is your form for your use tax and since that was bought through corporation obviously that was all handled on the up-and-up so the states that currently require Newegg to provide a report to the customer for their tax purposes is listed here Colorado Louisiana Vermont and Rhode Island but it even goes a step further Colorado specifically requires that Newegg not only send the report to the customer but also to the Colorado Department of Revenue so what that means is Colorado knows that you bust stuff from out of state it is expecting a use tax on your tax return and that could potentially trigger an audit if you don't report it if you live in Colorado do me a favor comment down below have you ever received that from Newegg have you ever received it from the state I'm kind of curious Rhode Island requires that you actually pay your to use tax monthly so instead of on the end of your annual tax return they expect every single month that you fill out the form that's available at Newegg to then pay the use tax due on the 20th of every single month so they obviously take it quite a step further now what makes Connecticut kind of unique is according to a Washington tax professional Connecticut is the first state actually reaching out to retailers requesting the customer data and that gives us now a branch in this argument versus ethics and legality on whether or not it's ethical for a customer data and for our information to be sent out via a retailer so that's obviously a whole nother topic a whole nother discussion that really has no bearing on today's video but it's definitely where the fork in the road has been regarding the front of this particular argument now the precedent that this sets is one new egg was not required by law or by court to provide this information although Connecticut could have probably subpoenaed new egg which then would have made it required but new exist rolled and provided that information which is why now approximately 3,000 of these text collection letters have been sent out since February now if you guys have received one you know exactly what I'm talking about suddenly you're hit overnight with like wow I owe 400 bucks 40 bucks I don't have I have told next week to pay it or I'm gonna pay a penalty on it well to be fair to be honest that is on you you did oh it all along now the difference is now Connecticut knows that he oh it were the difference in the past was it was an honor system you were required to report your earnings but if you didn't report it the state had no way of knowing so Connecticut being a very we'll call it a poor state because it's not doing too well financially is now require sent out these letters to apparently over 150 online retailers so if you basta from Newegg if you bought stuff from any online site major site let's say B&H photo let's say adorama if you've been buying stuff from these companies that have not been providing any of your use tax information you very well could not be getting a letter just from Newegg but you could be getting it from multiple sources making a hundred or 200 dollar tax bill now potentially thousands now again this is one of those things where technically you run the hook for that all along and if you weren't reporting it that's technically considered tax evasion but usually we're talking very small amounts of money that usually was overlooked but the problem is as we move into this very online world and people are conducting business from all over the world now and you're never having to necessarily buy something from your own state the states are hurting for this money and now they're finding more creative ways to do this and the president that's been set now is because companies like Newegg have rolled over and provided that data more states are going to follow so expect this to happen more and more now I don't know what the solution is going to be for those of you that oh the money I mean pay your taxes it's all I can recommend pay it don't fight the state the state has way more resources than you to fight that in win if you don't have the money work out an arrangement that's what I could that's that's what I would do if it was me if I didn't have the money I would work out an arrangement most states have plans and all of that stuff but expects moving forward as online retailers become more and more prevalent and become major retailers like Amazon expect to pay and have these letters coming from the state that you might consider be considered blindsided now most of the time on your step your state tax return there's a line on there that states have I purchased anything from out of state you're supposed to add that up and then it's like six and a half percent or something depending on on the states that you live in but here's a fun fact for you if I was to hanok a twenty dollar bill would you like that yeah you want twenty bucks okay well I'll give you twenty bucks but now you owe the government like four of it because that's considered a transaction and you owe taxes on pretty much any transaction you go to Craigslist and you sell something you take money I sell Nick this piece of iPhone he gives me four hundred bucks I'm supposed to pay taxes on that four hundred bucks that's the way it actually works and that's the letter of the law the letter of tax law states that the problem is obviously nobody does that and so you have billions of dollars across the country on the table that's not being collected and states are now fighting to collect that money because they've lost the revenue so I mean that's that's where we are with this so expect when you buy something now from a company like new egg or B&H photo or these major retailers and you go wow this is tax free it was never tax free to be fair it was never tax free it's just they had no way of knowing you bought it but as long as the retailers are willing to roll over and just send them the information then now they know so you might want to expect in the future when you go and buy something online because you could save the two or three hundred bucks in sales tax you're probably going to owe it down the line so that's just one thing to keep in mind I don't have any other notes here that's what's happening here it is uh or the forms that I'm talking about two of with new egg they are available on their website so you guys can go and find all of that but yeah that's that's where we are with this and I wanted to get that information out there I also wanted to talk about some setting some of the facts straight people are mad that new egg wasn't collecting state taxes new egg it wasn't up to them they don't have to that's the problem they don't have to Connecticut apparently offered them the - they turned it down and chose to just send the data to the state and let the state go after the money I don't know I don't know what the operating differences or cost would be for them to just collect it but this isn't just new wage involved guys apparently Connecticut sent it out to over 150 retailers and other states are going to follow suit because of the precedent the new wake set anyway guys I'm gonna go just want to do this video explaining some of what's going on again consult your CPAs consult your tax preps to find out what the laws are in your states and your counties I'm not providing you tax advice or CPA advice that is again on you pay your taxes all right guys I'm gonna go we've got a video coming up here you guys have been suggesting and requesting forever that I finally build in the loke ghost s1 I will be doing a build in that but it's not gonna be the fully custom water-cooled bill that I promised I'm doing that in a different version in this case they're sending a silver one with different top hats that I requested this is like an early engineering sample so that will be coming once that's available and fulfilled they're still fulfilling orders on that so I'm gonna go guys thanks for watching subscribe if you guys enjoyed today's video if you have any input on this I'm curious whatever laws in your States and have you received a letter and you don't live in the state of Colorado Rhode Island or Connecticut if you received a letter from Newegg if so what did it say put it in the comments below and as always guys I'll see you in the next one