Tax-free Amazon shopping will be a thing of the past in Connecticut soon.
Online retailer Amazon and the state of Connecticut have reached an agreement on collecting sales tax for purchases made by Connecticut consumers.
This is a departure from Amazon’s official position on sales tax collections. Prior to this agreement, Amazon argued that it should not be required to do so without an actual physical presence in a state. NBC News points out that “under current federal law, out-of-state retailers cannot be required to collect tax on sales to Connecticut.”
Gov. Dannel Malloy claimed “this is a win for our state’s taxpayers, our main street retailers, and our workforce,” according to the Hartford Courant.
In exchange for agreeing to collect Connecticut sales tax, Amazon supposedly will build a $50 million fulfillment center somewhere the state at some point which will employ hundreds of workers.
According to AP, “Amazon will begin collecting the 6.35 percent tax on Nov. 1 and hand the money over to the state.”
In June 2011, Amazon ended its affiliate program in Connecticut over the sales tax dispute.
Amazon official Paul Misener made these comments about the sales tax agreement:
“We thank Governor Malloy for his strong commitment to Connecticut jobs and investment. These are good paying jobs with good benefits that will contribute to the fabric of Connecticut communities. We are delighted to make this announcement today, and 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.”
If you are a Connecticut resident, how you feel about being forced to pay sales tax on Amazon purchases starting next fall? If you live elsewhere, could your state be next?