Connecticut is stepping up efforts to collect state sales taxes that online and out-of-state retailers are not paying.
Current state law requires out-of-state sellers with a substantial economic presence in the state to collect and remit Connecticut sales tax, but the Department of Revenue Services estimates at least $70 million is being evaded annually.
DRS Commissioner Kevin Sullivan said it's unfair when only in-state businesses "bear the burden of tax collection and the pricing disadvantage of including sales tax" while out-of-state businesses offer the same goods and services, but sales tax-free.
Sullivan said DRS plans to close this loophole for big retailers doing business in Connecticut, not out-of-state companies doing a modest amount of business in the state.
“States have waited for decades in the hope that Congress would help, but that is clearly not going to happen. So it’s up to the states to assure the promise of the federal Commerce Clause that neither in-state nor out-of-state retailers will have an unfair advantage in the marketplace and in taxes paid to help maintain that marketplace,” Sullivan said in a statement.
The Connecticut Retail Merchants Association is supporting the effort.
