Amazon.com, under pressure by states throughout the country, has agreed to charge Connecticut sales tax on purchases by state residents starting in November. What does Amazon get for the potential loss of business? It’s opening a $50 distribution center in the state.
Local businesses undoubtedly like the sales-tax agreement — it’s one less advantage the online retailer has over the locals.
Here’s the report by The Courant’s Brian Dowling:
Amazon, the world’s largest online retailer, will begin collecting sales tax in the state this November as part of an agreement that Gov. Dannel P. Malloy says will mean hundreds of new jobs and a $50 million Connecticut distribution center.
It also means that residents will pay a 6.35 percent tax on every book, DVD, electronic device or tube of toothpaste bought and shipped to their doorstep from Amazon. And the tax will be paid when consumers click “Place Your Order” instead of at tax time, when state tax forms ask residents to declare online purchases. Many people have not declared those purchases and have not paid the tax, state officials say.
The agreement, signed Sunday and announced Monday, allows the state to address the long-standing issue over online collection of state sales tax and follows similar agreements in Massachusetts in December and New Jersey in 2011.