Amazon makes another tax deal

February 5, 2013 04:29 PM Inc. has agreed to begin collecting sales in Connecticut, and to do so in advance of the 2013 holiday shopping season.

Amazon and Gov. Dannel P. Malloy, a Democrat, announced today that the retailer, No. 1 in the Internet Retailer Top 500, will begin collecting sales tax from Connecticut customers on Nov. 1. Amazon has also agreed to invest $50 million in at least one new facilityin the state, creating hundreds of jobs.

“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,” says Malloy.  

Neither the state nor Amazon specified the nature of what Amazon’s plans to build, though such tax deals typically involve distribution operations. “It’s too early to discuss details,” an Amazon spokesman says.

Amazon and Connecticut officials have also agreed to work together in support of federal legislation that would allow states to mandate collection of sales tax whether or not retailers have a physical presence in a state. Under existing federal law, states can require collection and remittance of sales tax only by retailers that have in-state physical facilities such as stores or distribution centers.

Amazon has signed similar tax deals in several other states where it operates or plans to operate distribution centers or other facilities. In December, it agreed to begin collecting sales tax in Massachusetts, where it had acquired early last year warehouse robotics company Kiva Systems Inc. Amazon started collecting sales tax last year in California, Pennsylvania and Texas, and it plans to begin collecting sales tax over the next several months in Arizona, New Jersey and Virginia. It also collects tax in Kansas, Kentucky, New York, North Dakota and its headquarters state of Washington.

There are at least three versions of federal legislation that Amazon supports, each designed to give states the authority to mandate sales tax collection by all retailers, regardless of their in-state physical presence. But none has been put to a vote in Congress.

One bill, the Marketplace Fairness Act, received bipartisan support last year from Sen. Dick Durbin (D, IL), Sen. Mike Enzi (R, WY) and Sen. Lamar Alexander (R, TN), but was never put before the full Senate. A spokeswoman for Sen. Durbin says the three senators expect to re-introduce the Marketplace Fairness bill this month and are working with members of the House of Representatives in hopes of also introducing a compromise bill for both houses of Congress.




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