.

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.”

KEVIN DILLON February 04, 2013 at 11:28 PM
So in essence another tax increase on Ct residents.
Igor February 05, 2013 at 10:45 AM
Malloy never ceases to amaze me. I guess when he leaves office he'll move to another state also.
Sandra February 05, 2013 at 01:11 PM
November 16, 2012 on Patch Gov. Malloy Says No New Taxes Despite Deficit
DM February 05, 2013 at 01:57 PM
Not a fan of Malloy here either but, its because Amazon is opening up a distribution center here in Ct. that they have to collect sales tax now. This would be true in any state.
Stanley Simpleton February 05, 2013 at 02:38 PM
DM - Amazon is only opening a distribution center in CT because the State has agreed to reduce their costs (i.e. fund the building and allow them to operate tax free). As a consumer, I can't understand why you would defend these actions unless you're simply a PR representative for the Malloy campaign, which is not unimaginable. I guess it's time for me to cancel my Amazon Prime membership - I will be sure to let them know why.
Andrew Graceffa February 05, 2013 at 02:40 PM
You can't really complain about having to pay sales tax via Amazon here. Annoying, yes, but according to the law you were supposed to be paying the sales tax on your own under the current situation. Which of course no one did and it wasn't worth the time to chase down. Now they are automating it and bringing it in line with brick and mortar stores who charge sales tax at the point of sale. Whether or not one should pay taxes for online goods (for a business who up until late 2013 won't have a physical presence in CT) is another thing.
Tucker February 05, 2013 at 02:53 PM
You're going to cancel your Amazon Prime account because you now have to pay sales tax on the items you order from Amazon? Sort of like how you pay sales tax on everything else you've purchased in the state for the last ... I don't even know ... decades? We all knew the tax-free internet commerce model was dying. And Sandra-As usual you're grossly oversimplifying the situation and trying to place blame on any politician that doesn't fit in your special little world. Knee-jerk idiocy.
KEVIN DILLON February 05, 2013 at 03:07 PM
This appears to be a quid pro quo. Amazon agrees to tax sales in Ct and Ct agrees to give Amazon a deal to open a center in CT. Malloy does this so he can raise revenue without anyone saying HE raised rates, he can also lay claim to producing jobs. At the end of the day, taxpayers in CT, already one of the top tax paying states in the free world, get just a little more taken out of their pay. This when Malloy is about to introduce a budget that increases spending and creates a deficit that he will cover through borrowing. 2014 can't come soon enough.
Stanley Simpleton February 05, 2013 at 03:09 PM
@Tucker - I'll cancel my Amazon Prime account because I can purchase items directly from other venders and continue to avoid paying State sales tax. As far as I'm concerned, this State sucks and then wastefully spends enough of my income. What ever happened to the "Temporary" (as it was initially billed) State income tax? Because the State can't live within it's means, like we all do personally, I'm supposed to make up the difference? To hell with that! If the State could responsibly spend my tax money, it would be an entirely different story. Instead, I continue to learn of waste, political curruption and unending social welfare programs for the less motivated (sorry, less fortunate) who don't get up at 5am to go to work each day like I do.
DM February 05, 2013 at 03:15 PM
Stanley, Show me where the state is funding the building? This actually helps everyone in CT. Small storefront business in Ct. cannot compete if you buy online to avoid paying taxes. Oh and im a republican. http://ctmirror.org/story/18996/amazon-will-collect-sales-tax-will-open-50m-distribution-center-here
Stanley Simpleton February 05, 2013 at 05:05 PM
This push is coming in-part from private companies like the one provided below, with offices in Norwalk, who are pushing our legislators to initiate an online State sales tax. With the revenues of the online transactions shared with this "faciliator" and the vendor. The funds are then recycled during the next election season to re-elect those in Hartford who voted for the change. As usual, the taxpayer gets hosed in the end. The Federal Tax Authority 162 East Avenue, Third Floor Norwalk, CT 06851-5715

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something