Amazon to collect Connecticut sales tax, ending dispute

Amazon agreed to collect Connecticut's sales tax, ending a two-year dispute over the tax that the online retailer had previously refused to charge its customers.

The retailer also promised to spend $50 million to build an order-fulfillment center at an unspecified site and create hundreds of jobs. Kevin Sullivan, commissioner of Revenue Services, said that Amazon will generate about $8 million in the first year it collects the tax and $13 million to $15 million in the second year. By agreeing to collect the tax, Amazon puts pressure on other Internet businesses to pay Connecticut's 6.35 percent sales tax, Sullivan said. Amazon will begin collecting the tax on Nov. 1 at the start of the busy Christmas holiday shopping season. The company previously insisted it was not obligated to abide by the state's Internet tax law because it does not have a physical presence in Connecticut.