Amazon to collect Conn. sales tax, ending dispute

WEST HARTFORD, Conn. (WTNH) -- The days of tax-free shopping on Amazon.com will come to an end in Connecticut on November 1. It's part of a big deal the state announced today with the online retailer that will also bring 300 jobs to the state.

It was two years ago that News 8 first told you about the so-called 'Amazon tax.' It went on the books in 2011 but Amazon never complied, but now they've changed their mind.

'Lux, Bond and Green' is one of the hundreds of Connecticut retailers that are rejoicing tonight because of the big deal with Amazon.com announced by Governor Malloy today.

"Amazon will, as of November 1st, 2013, begin to collect Sales Tax at the time of purchase leveling the playing field for local retailers," said Malloy.

It means that the huge online retailer will no longer always have the lower price advantage and will impose and collect the 6.35% Connecticut Sales Tax just like when you buy something at local stores like 'Lux, Bond and Green.'

And on higher priced items like watches, that can run well over a thousand dollars the sales tax is a full seven percent.

"In addition, Amazon is committed to spending 50 million dollars in our state to build a customer fulfillment center, which will employ at a minimum, 300 people," said Malloy.

Amazon's vice president for public policy issued a statement saying, "We are delighted to make this announcement today and look forward to working with Governor Malloy toward passage of the legislation now being considered by Congress that would finally resolve the sales tax issue.

Collecting the sales tax starting November 1 of this year will allow the state to cash in on online holiday gift buying this year. It's expected to produce at least 15 million for the state annually.

"The decision to have it apply in that first year, to that major shopping...online shopping season, which really starts early in November and then runs through the holidays means we get the benefit early on," said Commissioner Kevin Sullivan, Conn. Dept. of Revenue Services.

John Green, who owns and operates eight stores, says he has no idea how much business he loses to non-taxed, online websites like Amazon.com but he knows he does.

"I know people sometimes tell us 'well gosh, I can get it online and I don't have to pay sales tax,' but I just don't know how many people never walk in, knowing that," said Green.

The Governor and his tax commissioner seemed to indicate that with Amazon collecting the state sales tax other online retailers may soon follow.

"Even though Amazon is one of many online retailers, they're a big online retailer and to get them to collect sales tax Connecticut has great news," said Tim Phelan, Conn. Retails Merchants Assoc.

"Charging sales tax in the state of Connecticut is really good for all the retailers. No matter what Amazon is selling, all of us have just won a level playing field," said Green.