Connecticut Department of Revenue Services (DRS) Commissioner Kevin Sullivan announced today that Newegg Inc., a California-based online retailer of computer hardware and consumer electronics, will collect and remit sales tax on sales made into the state. 

The company previously did not collect sales tax in Connecticut.  DRS began billing Connecticut taxpayers for use tax due on the sale of taxable goods because sales tax had not been collected by the retailer.  By agreement with DRS, Newegg will begin directly collecting tax on its sales effective July 1, 2018.  

Said Commissioner Sullivan, “This is exactly what we asked online retailers to do in the first place and I am glad Newegg has now agreed.  While DRS did offer Connecticut taxpayers a settlement opportunity to avoid two years of interest and penalty, we much prefer the simpler and fairer solution of retailers collecting the tax.  While this does not affect use tax payments billed prior to March 7, 2018, DRS has ceased additional Newegg-related use tax collection efforts based on future Newegg compliance on and after July 1, 2018.”

Added Sullivan, “DRS will continue taking steps to assure there is a level playing field for traditional retailers and those selling on line.  In the meantime, we are hopeful that the U.S. Supreme Court finally ends the argument for favored treatment of remote sales and assures a marketplace where all retailers play by the same rules.”      

Connecticut’s “use tax” is complementary to its “sales tax.” Together, the sales and use taxes treat purchases of taxable goods and services that are used in Connecticut equally, whether the goods and services are purchased within or outside Connecticut. Use tax is the tax consumers are required to pay when purchasing a taxable good or service in Connecticut on which the seller/retailer does not hold a CT Sales and Use Tax permit and did not collect and remit the tax to the DRS.