It has recently come to our attention that HostGator is required to be collecting an 8.25% sales tax from all of our Texas-based customers. Our records indicate that your account billing information is based in Texas.
This came to our attention after we received a letter from the Texas Comptroller of Public Accounts notifying us that we are being audited. After doing research on the issue and running a few numbers, we were forced to pay close to $500,000 dollars in back taxes on our Texas-based customers.
The good news:
This was our fault for not collecting taxes from day one so we will only be collecting the 8.25% tax going forward. This means you've had a pretty nice discount up until now, not having to pay the tax.
The bad news:
Starting in 30 days we will be adding a 8.25% sales tax to all of our customers based in Texas, including your account.
I really wish HostGator could afford to pay this tax on behalf of our Texas clients going forward, but unfortunately, with shared hosting having such low margins, this would result in many of our packages becoming unprofitable. I know this may sound greedy to many of you, but the fact is that in order for us to stay in business we have to make a profit. We aren't a multi billion dollar company without a soul that the government is going to bail out if we can't pay our bills.
I'm extremely sorry for having to collect this tax. If the law should change and we aren't required to collect we will immediately cease to. Until then it's as they say; "Nothing is certain but death and taxes."
Thank you for your continued support and business!