The Connecticut General Assembly today introduced a flurry (pun intended—there is a lot of snow here right now) of proposed bills concerning sales tax. Two of these bills are directly related to collecting the taxes already due on purchases on internet transactions.
Proposed Bill Number 5545: Specifies that sales tax is due from an online retailer when the online retailer uses an in-state affiliate to sell its products.
Proposed Bill Number 5543: Works toward putting in place an effective system to collect sales tax from retailers who sell via the internet or the cloud.
Although the texts of these bills are not yet known, it is pretty clear that Proposed Bill 5545 is affiliate nexus (“Amazon tax”) legislation, along the lines of the bill just passed by the Illinois House and Senate and the bill recently introduced in California. We’ve analyzed the drawbacks of affiliate nexus legislation extensively in previous posts on this blog.
Proposed Bill 5543 sounds more promising. Perhaps Connecticut is going to enact legislation to conform to the Streamlined Sales and Use Tax Agreement, so that all businesses (internet, affiliates, and brick-and-mortar merchants) are required to handle sales tax collection the same way. Check back on this blog for updates.