Connecticut Governor Daniel P. Malloy announced on February 4, 2013 that the State of Connecticut and Amazon have entered into an agreement for Amazon to begin collecting the state’s 6.35 percent sales tax on merchandise purchased on Amazon’s website by consumers in the state. Such collection efforts will begin on November 1, 2013. The state expects to collect $8 million in sales tax for fiscal year 2014 and between $13 million and $15 million during fiscal year 2015.
At the same time, Governor Malloy also announced that over the next two years, Amazon would invest $50 million in the state and create hundreds of new full-time jobs.
“All in all, this is a win for our state’s taxpayers, our main street retailers, and our workforce,” Governor Malloy said in a statement. “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. Their agreement to begin collecting revenue is a great step, but federal action on this issue is still necessary.”
Paul Misener, Amazon vice president, Global Public Policy, said in an announcement that he “look[s] 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 state’s rights and allow states to collect the revenue owed.”
Current federal law follows a 1992 U.S. Supreme Court case (Quill Corp. v. North Dakota) which held that companies selling merchandise online cannot be required to collect sales taxes if they lack a physical presence – such as a distribution center – in that state. This case specifically noted that Congress can overrule this decision through legislation.
Connecticut now joins 15 other states where Amazon has begun collecting, or has pledged to begin collecting, sales tax on merchandise sold to customers residing in such states. The other states joining Connecticut include: California, Indiana, Kansas, Kentucky, Massachusetts, Nevada, New Jersey, New York, North Dakota, Pennsylvania, South Carolina, Virginia, and Washington.