SALT Report 2120 – Connecticut Governor Dannel Malloy announced that the state has reached an agreement with Amazon in which the online retailer will begin collecting and remitting sales tax on November 1, 2013. In addition, Amazon has agreed to build a state of the art fulfillment center which will reduce shipping times and create hundreds of new full-time jobs.
The agreement settles a two-year dispute between Connecticut and Amazon which began when Connecticut passed legislation requiring Amazon to collect sales tax even though federal law did not require that they do so. Rather than comply with state laws Amazon chose to shut down its affiliate program and remove itself from the state. Amazon has made similar moves in Illinois, Colorado, North Carolina, and Rhode Island in response to legislation passed in those states.
However, at a joint press conference, Amazon CEO Jeff Bezos said the company supports changes in federal law 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.” Bezos, who is a longtime supporter of the Streamlined Sales Tax Agreement, says this type of agreement would simplify the requirement to collect sales taxes among all states.
The agreement with Connecticut is very similar to agreements Amazon has made with eight other states, including California and Texas. And, by the end of 2013, Amazon will begin charging sales tax to customers in New Jersey and Virginia with customers in Tennessee, Indiana, Nevada, and South Carolina following suit in 2014.
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