HARTFORD, Conn., June 11 (UPI) -- Internet sales giant Amazon.com said it would cut and run regarding its physical presence in the state of Connecticut due to a new sales tax law.
The law passed by the General Assembly this week defines an Internet company's presence in the state as including bloggers who provide a link to Amazon on their Web sites. When clicking on a link on the Web site results in a sale for Amazon, the retailer gives a commission fee to the blogger, Hartford's TheDay reported Saturday.
As of July 1, Amazon would have had to pay state sales tax on purchases made in Connecticut, because its connection with bloggers -- called affiliates -- in the state defined it as having a physical presence there.
In a mass e-mail, Amazon said, "Unfortunately, the budget signed by Gov. (Dannel) Malloy contains a sales tax provision that compels us to terminate this program for Connecticut-based participants, effective immediately."
Connecticut also has a self-reporting law that requires residents to declare purchases made online and pay a "use tax," but it is rarely used, the newspaper said.
Kevin Sullivan, commissioner of the state Department of Revenue Services, said online retailers were not playing fair, given they can dodge state sales tax, while a store located in the state cannot.
"Instead of making a simple and inexpensive adjustment in their automated billing processes, Amazon and the others will do anything to keep competing unfairly and pass tax obligations along to unsuspecting state residents who then have to remit the resulting use tax," he said.
