From the above Link
Connecticuts Amazon Law
In the Spring of 2011, the Connecticut legislature amended the definition of retailer in Section 12-407(12) of the states sales tax statute, adding language to require larger Internet retailers with no physical presence in Connecticut, but meeting certain other conditions, to collect and pay Connecticuts sales tax. Similar laws have been at least considered, and sometimes enacted, in various states around the country. These laws are commonly known as Amazon laws. (As you might guess, the name refers to Amazon.com, which is a large, Internet-based retailer that does not have a physical presence in many states, and therefore, under the default sales tax rule, need not collect sales tax from customers in those states. As customers in those states often do not pay the corresponding use tax, Amazons sales, and those of other large online retailers, such as Overstock.com, are frequently understood to constitute significant lost tax revenue for those states.)
Under the new law, if an out-of-state Internet retailer has what is commonly known as a click-through arrangement with one or more persons located in Connecticut, and meets a few other conditions, the retailer must collect sales tax. More specifically, an out-of-state retailer needs to collect sales tax from Connecticut customers if that retailer:
Final Words
For most small online businesses, it is the long-established physical presence rule that provides primary guidance on collecting tax on sales to customers in Connecticut. However, the issue is contentious, as demonstrated by the Amazon law enacted in Connecticut last year.
A good place to turn for additional information about a Connecticuts Internet sales tax laws is the Department of Revenue Services. For more general information on taxes on Internet sales, see Nolo's article Sales Tax on the Internet. And, for information on the rules about collecting sales tax for Internet sales in any other state, see Nolos article, 50-State Guide to Internet Sales Tax Laws.
Connecticuts Amazon Law
In the Spring of 2011, the Connecticut legislature amended the definition of retailer in Section 12-407(12) of the states sales tax statute, adding language to require larger Internet retailers with no physical presence in Connecticut, but meeting certain other conditions, to collect and pay Connecticuts sales tax. Similar laws have been at least considered, and sometimes enacted, in various states around the country. These laws are commonly known as Amazon laws. (As you might guess, the name refers to Amazon.com, which is a large, Internet-based retailer that does not have a physical presence in many states, and therefore, under the default sales tax rule, need not collect sales tax from customers in those states. As customers in those states often do not pay the corresponding use tax, Amazons sales, and those of other large online retailers, such as Overstock.com, are frequently understood to constitute significant lost tax revenue for those states.)
Under the new law, if an out-of-state Internet retailer has what is commonly known as a click-through arrangement with one or more persons located in Connecticut, and meets a few other conditions, the retailer must collect sales tax. More specifically, an out-of-state retailer needs to collect sales tax from Connecticut customers if that retailer:
- has an agreement with one or more persons in Connecticut to refer potential customers to the retailer via a website link or otherwise
- compensates the person or persons in Connecticut for directing potential buyers to the online dealer, and
- the sellers cumulative gross receipts from such directed sales to Connecticut customers exceeds $2,000 during the preceding 12 months.
Final Words
For most small online businesses, it is the long-established physical presence rule that provides primary guidance on collecting tax on sales to customers in Connecticut. However, the issue is contentious, as demonstrated by the Amazon law enacted in Connecticut last year.
A good place to turn for additional information about a Connecticuts Internet sales tax laws is the Department of Revenue Services. For more general information on taxes on Internet sales, see Nolo's article Sales Tax on the Internet. And, for information on the rules about collecting sales tax for Internet sales in any other state, see Nolos article, 50-State Guide to Internet Sales Tax Laws.
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