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CT Residents to Pay State Sales Tax on Amazon Purchases

What's more, Amazon.com will be building a new distribution center in Connecticut and will create up to 300 jobs over the next two years under a deal announced Monday by Gov. Dannel P. Malloy.

 

Starting Nov. 1, Connecticut residents who make purchases from online retailer Amazon.com will be required to pay 6.35% in state sales tax on each transaction, thus generating much-needed additional tax revenue for the state.

What's more, Amazon.com will be building a new distribution center in Connecticut and will create up to 300 jobs over the next two years under a deal announced Monday by Gov. Dannel P. Malloy.

The deal is expected to generate more than $15 million a year for the state, according to a press release from the governor's office. Amazon is yet to select a site for the new distribution center.

“All in all, this is a win for our state’s taxpayers, our main street retailers, and our workforce,” Governor Malloy said in the release. “Amazon’s multi-million dollar investment and the hundreds of jobs that will come with both the construction and operation of their future facility will unquestionably boost our local economy."

Under current federal law, out-of-state retailers are not required to collect tax on sales to Connecticut. Residents are required to pay sales tax on items they buy from online retailers, but in reality, most ignore the law. Currently Congress is considering legislation that would require online merchants to collect and remit taxes in the states where they do not have a brick and mortar presence, or "nexus."

Malloy said although Amazon's agreement with Connecticut to collect and remit sales tax only partially addresses the problem (i.e. not all online retailers are willing to make such deals with the state, and Amazon is one of the first), it is "a great step," and will have a secondary effect of allowing state merchants to compete more fairly against Amazon.

"We… look forward to working with Governor Malloy toward passage of the legislation now being considered by Congress that would finally resolve the sales tax issue, level the playing field for all retailers, protect states’ rights and allow states to collect the revenue owed," said Paul Misener, Amazon vice president, global public policy.

“With strong support from Governor Malloy, this has been one of our top priorities for over a year now,” said Department of Revenue Services (DRS) Commissioner Kevin Sullivan. “It’s a great result for our consumers and businesses, state and local revenue, new investment and new jobs. Amazon is a great company. Good tax policy can be good business policy too.”

Rational Wilton Mom February 05, 2013 at 12:28 AM
Got to love it. First, they don't require sales tax on Amazon purchases which not only affects the state budget in a negative capacity, but it also drives smaller CT businesses out of business because they cannot compete with the "great deals" and no sales tax on Amazon. Just ask the owner of the Wilton Open Book Store who had to close several years ago. And now they "brag" that Amazon is bringing 300 new jobs to CT...but, hey, we're going to get charged that much needed sales tax. Amazing...just amazing.
Cliff Cuming February 05, 2013 at 01:54 AM
“All in all, this is a win for our state’s taxpayers, our main street retailers, and our workforce,” Governor Malloy said " Utter nonsense...just exactly when is another tax a "win" for burdened CT taxpayers! They should focus on cuts to the excessive government spending that dug this hole.
Stop wasting money on Trackside February 05, 2013 at 01:49 PM
So the state will get more taxes. Just great! What this means is that the state will spend more. What do you want to bet that for every extra dollar in sales tax the state gets, the state will find a way to spend $1.50 of it.
Alethiologist February 05, 2013 at 10:28 PM
A taxing we will go, a taxing we will go, hi ho the darrio, a taxing we will go

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