Sales Tax
1:30 pm
Tue February 5, 2013

Amazon Will Charge CT Sales Tax, Build Distribution Center

Connecticut residents will have to start paying sales tax on purchases from Amazon.com later this year. As WNPR’s Harriet Jones reports, the web giant has plans to site a distribution facility in the state.

Connecticut has been at odds with Amazon and other out of state web retailers for for more than a year, since the state passed a law attempting to force them to charge sales tax on purchases sent here. Amazon and others responded by cutting ties with small in-state affiliate companies, so that they could claim they had no presence in Connecticut, and thus avoid the tax. Now Amazon says it will build and staff a distribution center in a yet-to-be-decided location in the state. Catherine Smith, the Commissioner of the Department of Economic and Community Development says its a big win for Connecticut.

“Clearly the commitment to be here, spend at least $50m and build a great new facility that will employ a lot of people in Connecticut is a wonderful thing.”

Because of this promised physical presence, the retailer also says it will begin charging state sales tax, a move that Connecticut hopes will net about $15 million annually.... and that’s not popular with many consumers, like Marion Conklin from West Hartford.

"You know, who wants more tax? Amazon was a really good deal, still is a good deal -- with tax it makes it less of a good deal. I think it’s unfortunate that it’s just one more thing we’re going to pay taxes on. I pay a lot of taxes."

But small businesses here are likely to see it as a victory. Another West Hartford resident, Edward Basanese says he’s happy to see a level playing field.

“I think that it’s fair to local people that the online people are made to charge sales tax so that it’s an even field with local booksellers and so on. So I think that’s fine.”

Amazon says it will begin levying the tax in November. Governor Dannell Malloy says the company has not received any tax incentives to locate in Connecticut.

For WNPR, I'm Harriet Jones.