Taxes & Government Spending, Healthcare, Government Administration

CT Government Weekly Rundown—November 4

  • Nov 04, 2013

CT Begins Collecting Taxes on Sales
On Friday Connecticut joined a growing list of states that tax sales within the state. 

The new tax is the culmination of several years of negotiation between the Connecticut government and Amazon.  In 2011, the Connecticut General Assembly passed a law requiring online retailers to collect state sales tax for purchases made within Connecticut.  Amazon refused to comply, citing federal laws that exempt online retailers from state and local sales taxes unless they have in-state brick-and-mortar operations.  The state and Amazon resolved this dispute in February -- the company agreed to begin collecting the sales tax and to build a $50 million distribution center in Connecticut, plans for which are underway in Windsor. In exchange, the state agreed to not pursue back taxes on past sales.  

The Department of Revenue Services estimates the new tax will generate $8M in revenue this year and $13-$15M in annual revenue going forward.  

What It Means For You: Connecticut consumers will see a larger bill when shopping online through Amazon.  But traditional Connecticut retailers will benefit from the change – they understandably felt online retailors' exemption from state sales tax gave online retailors an unfair competitive advantage.  As far as the state’s broader fiscal challenges go, $13-$15M in additional annual revenue won’t make a substantial impact.  

Audit Identifies Mismanagement in Dep't of Public Health

The state auditor released a report this week criticizing the Department of Public Health for widespread mismanagement, including mishandling of medical inventory and a failure to properly monitor service providers the department licenses.  The audit covered fiscal years 2010 and 2011 and included 33 recommendations for corrective action.  The Department issued a statement that it agreed with the recommendations and has already begun addressing them.

What it Means For You: This is the third audit report in the last few months identifying mismanagement at a CT government agency or department.


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