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This article was published on February 4, 2013

Amazon to start collecting 6.35% sales tax in Connecticut this November, plans $50m facility

Amazon to start collecting 6.35% sales tax in Connecticut this November, plans $50m facility Image by: Johnny Lye
Harrison Weber
Story by

Harrison Weber

Harrison Weber is TNW's Features Editor in NYC. Part writer, part designer. Stay in touch: Twitter @harrisonweber, Google+ and Email. Harrison Weber is TNW's Features Editor in NYC. Part writer, part designer. Stay in touch: Twitter @harrisonweber, Google+ and Email.

Connecticut state officials are reporting that Amazon has agreed to begin collecting a 6.35 percent sales tax on products bought within the state, starting November 2013.

As the San Francisco Chronicle reports, this news follows Amazon’s previously stern insistence that it is “not obligated to abide by the state’s Internet tax law because it does not have a physical presence in Connecticut.” Amazon is known for its skillful system of avoiding state taxes — the company currently pays such taxes in just a handful of states.

Clearly a hot topic for debate, supporters of the tax believe that Amazon has an unfair advantage over brick and mortar stores. Conversely, Amazon argues that there is no federal law that requires it to pay taxes in states in which it doesn’t physically operate. Instead, consumers in these states who buy items from Amazon are supposed to pay these taxes themselves when they file annually — obviously, that doesn’t actually happen.

According to a statement from Connecticut Gov. Dannel Malloy, Amazon is now planning to invest $50 million in Connecticut over the next two years; Amazon plans to build a physical facility in the state and plans to create “hundreds of new full-time jobs.”

With this struggle lost, Amazon may face similar situations in other US states.

Image credit: Thinkstock