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.”
