State to tax Amazon purchases

What you buy on the popular online shopping site,, will subject to Connecticut sales tax later this year — just in time for online Christmas shopping.

Gov. Dannel P. Malloy made this announcement Feb. 4, and also said that Amazon would invest $50 million in Connecticut and create “hundreds” of new full-time jobs by building some sort of facility in the state over the next two years.

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

State can’t collect Internet sales taxes now

Under current federal law, out-of-state retailers cannot be required to collect tax on sales to Connecticut, leaving consumers with the burden of paying state-use tax and facing penalties for failing to pay the tax. But under the new agreement, beginning Nov. 1 — at the start of the two biggest retail sales months of the year — Amazon will start collecting and remitting state sales tax.

Paul Misener, Amazon vice president of global public policy, thanked Malloy for his support on Monday while highlighting the jobs Amazon will create in Connecticut. “These are good paying jobs with good benefits that will contribute to the fabric of Connecticut communities,” Misener said.

Misener added, “[We] look forward to working with Gov. 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.”

Was a top priority for the state

Kevin Sullivan, state Department of Revenue Services commissioner, said the agreement is a win-win for everyone. “ With strong support from Gov. Malloy, this has been one of our top priorities for over a year now,”  Sullivan said.

“It’s a great result for our consumers and businesses, state and local revenue, new investment and new jobs,” Sullivan said. “Amazon is a great company. Good tax policy can be good business policy too.” Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, Wash., began operating on the Internet in July 1995.