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Amazon Reaches Deal with Connecticut

Retailer will start collecting sales tax in November.

Amazon buyers in Connecticut will have to pay sales tax, just like brick-and-mortar shoppers starting this fall.

That’s part of a deal the state reached with the retail giant on Monday. It provides that Amazon will collect sales tax from Connecticut residents starting Nov. 1 and that the retailer will invest $50 million in the state over the next two years.

That investment will create hundreds of full-time jobs and boost the economy, says Connecticut Gov. Dannel Malloy.

“All in all, this is a win for our state’s taxpayers, our main street retailers and our workforce,” he reports.

Under the current law, out-of-state retailers are not required to collect sales tax, though buyers are supposed to report their online purchases and pay sales tax to the state. However, few do this, leaving millions in uncollected sales taxes on the table and leading to complaints that online retailers have an unfair advantage over brick-and-mortar stores.

Malloy adds that Amazon’s agreement to collect sales tax is “a great step” forward, but says federal action regarding online sales tax is necessary.

Amazon has reached similar deals with other states, including California and Texas.

“We thank Governor Malloy for his strong commitment to Connecticut jobs and investment,” says Paul Misener, Amazon’s vice president of Global Public Policy. “… We are delighted to make this announcement … 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.”

About the author

Olga Munoz
Olga Munoz is editor of TheOnlineSeller.com. In addition to writing news and feature articles about e-commerce, selling trends, online marketing and other topics of interest to online sellers, Olga manages the site's social media efforts. A journalism graduate of Chico State, Olga says her favorite part of being a journalist is learning interesting facts that help put stories into perspective, attending industry events and meeting interesting people "that leave you smiling, even in tough situations." Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Susan

    So let me get this straight ~ Amazon will require its sellers to
    collect sales tax in states other than the ones in which they operate.
    This article is woefully inadequate. You have Amazon’s canned response,
    but where is the reaction of sellers? Will the sellers be required to
    file sales tax returns for every county in each of these states, or will
    Amazon do that? If it’s on the seller’s plate, I’d be waving at Amazon
    in the rear view mirror. Small sellers who can’t afford full-time
    accountants will be so buried in paperwork that either their customer
    service will drop or their inventory will lag. Something will have to
    give. If Amazon is taking on the time-consuming chore, are sellers
    concerned they will lose sales to eBay?

    I hope everyone will consider supporting We R Here, an organization working to stop Congress from imposing hefty new tax laws that will spell the death of tens of thousands of small internet businesses.



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