Connecticut Governor Dannel P. Malloy and Amazon.com, Inc. (NASDAQ:AMZN) today announced that over the next two years, the company will invest $50 million in Connecticut and create hundreds of new full-time jobs.
The Governor also announced that an agreement had been reached under which Amazon will begin collecting sales tax revenue for online sales originating from Connecticut.
“All in all, this is a win for our state’s taxpayers, our main street retailers, and our workforce,” said Governor Malloy. “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. Their agreement to begin collecting revenue is a great step, but federal action on this issue is still necessary.”
Under current federal law, out-of-state retailers cannot be required to collect tax on sales to Connecticut . The state forced the issue by making local Amazon affiliates pay the tax. Amazon responded by cutting off all business relations with their CT-based affiliates.
Amazon is now prepared to set up a physical presence in the state in the form of a distribution center, and start collecting and remitting state sales tax starting November 1, 2013 – prior to the holiday season.
“We thank Governor Malloy for his strong commitment to Connecticut jobs and investment,” said Paul Misener, Amazon vice president, global public policy. “These are good paying jobs with good benefits that will contribute to the fabric of Connecticut communities. We are delighted to make this announcement today, and look forward to working with Governor Malloy toward passage of the legislation now being considered by Congress that would finally resolve the sales tax issue, level the playing field for all retailers, protect states’ rights and allow states to collect the revenue owed.”
Connecticut is expected to receive $15 million in additional annual tax revenues from Amazon. Also, the state did not have to offer any incentives to Amazon for the $50 million investment to set up a distribution center, and the 300 jobs the company is expected to create over the next two years.
“It’s a great result for our consumers and businesses, state and local revenue, new investment and new jobs,” said Connecticut Department of Revenue Services (DRS) Commissioner Kevin Sullivan. “Amazon is a great company. Good tax policy can be good business policy too.”