Internet sales tax may be enforced

Hartford (WTNH) - Do you save money by shopping online? If you count not paying the state Sales Tax in your savings that could soon be over.

Early on, the internet was tax free as a way to encourage its growth. Well, it's had a lot of growth and now local businesses and state government want to get in on the act.

By one estimate, the state of Connecticut may be losing as much as $500 million a year by not collecting the 6 percent sales tax on sales on the internet.

But It's not only hurting state government; it's hurting local retailers who are complaining loudly to state lawmakers.

"They're complaining that through the internet people can come into their store, try on clothing, compare products, then leave the store and buy it on the internet and they don't pay the sales tax," said Speaker of the House Chris Donovan.

"I got a letter over the weekend from a book store in Washington, Connecticut that said, 'Andrew, we're getting killed by Amazon,'" said Deputy Minority Leader Andrew Roraback. "And, it's very hard for us to stay in business when people can buy the same book on the internet and not have to pay a 6 percent sales tax."

It may interest you to know that legally you are supposed to pay taxes on internet sales.

"They're obligated to pay taxes. They're obligated to pay a 'use tax' on that however they don't," said Sen. Eileen Daily, of the Finance, Revenue & Bonding Committee.

Davis: "Their chances of getting caught are nil?"
Daily: "Oh absolutely."

The committee, that writes the state's tax laws, is looking to change all that to help the state and to help local business by joining several other states in having a streamlined uniform sales tax.

"One thing we do know is that internet sales are growing every year. More and more purchases are done over the internet, so it would make sense for us to get on board that now so that our revenue stream, on the sales tax, will increase over time," said Rep. Cameron Staples, of the Finance, Revenue & Bonding Committee.

"While I'm not enthusiastic about raising taxes, I am sympathetic to supporting local businesses and making sure that everyone's playing on the same playing field," Sen. Roraback said.

That's why leaders, in both parties, are urging members of Congress to hurry up and pass this because it will require a federal law to make this happen.

By joining other states with a Streamlined Sales Tax, Connecticut would be all ready when the feds decide to make it law. Streamlining just means eliminating certain exemptions that would make it technically more difficult to collect like the current exemption for clothing under $50.