Politics Published: May 26, 2011 - 7:58 AM

Rep. Perone: State must reconsider new “internet taxes”

By Rep. Perone's office

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State Representative Chris Perone (D-Norwalk) believes the state should reconsider pending legislation that would impose taxes on online sales. Perone, who serves as Deputy Majority Leader and is the former Vice Chair of the legislature’s Finance, Revenue and Bonding Committee, was the only Democrat to vote against the bill (HB 6624) in a Finance Committee vote earlier this year.

The bill which passed 38 to 14 in committee would require retailers—even if they have no physical presence in Connecticut—to collect state sales tax if they make retail sales in the state.

“I voted against this tax because under the interstate commerce clause, attempts to collect sales tax are unconstitutional without Congressional approval.” Perone said. “This is a complex issue and I believe there should be, if online sales were to be taxed, a simplified streamlined approach of tax collection at the federal level. I don't believe that it is in the best interest of Connecticut to impose this tax unless all 50 states require online retailers to charge sales tax.”

Overstock.com and some smaller online retailers announced earlier this week that they are leaving the Connecticut market for online advertising, because of the proposed internet tax.

Amazon and Overstock.com have refused to do business with “affiliates” in states, like Colorado and Illinois, which have passed similar legislation. Perone noted that states which have passed such bills have not seen any real economic benefit to date and some states, including New York, have been dragged into lengthy court battles with online retailers.

“I believe this tax puts jobs in jeopardy,” said Perone. “We have already had one very large online retailer and many smaller ones end their relationships with our state’s businesses and more will follow if we force them to collect sales tax.”

According to the nonpartisan Office of Fiscal Analysis an “internet tax” would only generate about $9.4 million in revenue—a miniscule amount in Connecticut’s $19 billion annual budget. The bill will make its way to the full State House of Representatives for a vote in the coming weeks.

Perone has long been a champion at the statehouse for making it easier for businesses to invest and create jobs in the state. Last year, Perone sponsored sweeping economic development legislation to jump-start job creation, while laying a foundation for long-term economic growth. Incentives for entrepreneurship and innovation, infrastructure, and education are all contained in the bill.

He also serves as Vice Chairman of the Communications, Financial Services and Interstate Commerce Committee of the National Conference of State Legislatures (NCSL).

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