As expected Connecticut legislators introduced their version of Internet sales tax. This bill is identical to the one that had been introduced last year. If you recall, there simply was not enough time left in the the session last year to finish work on the bill. At that time. legislators promised to bring it back.
Essentially it is similar to the New York version only the threshold is $2,000 in sales per year. That means nexus is established once an out of state merchant has sales of $2,000 or more to Connecticut residents that can be credited to Connecticut affiliates.
From HB 5481
and (L) every person making sales of tangible personal property or services through an independent contractor or other representative, if the retailer enters into an agreement with a resident of this state, under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet web site or otherwise, to the retailer, provided the cumulative gross receipts from sales by the retailer to customers in the state who are referred to the retailer by all residents with this type of an agreement with the retailer, is in excess of two thousand dollars during the preceding four quarterly periods ending on the last day of March, June, September and December. Such retailer shall be presumed to be soliciting business through such independent contractor or other representative, which presumption may be rebutted by proof that the resident with whom the retailer has an agreement did not engage in any solicitation in the state on behalf of the retailer that would satisfy the nexus requirement of the United States Constitution during such four quarterly periods.
HB 5481 was introduced on March 8 and referred to Referred to Joint Committee on Finance, Revenue and Bonding. A public hearing has been set for March 15. If it passes it will take effect July 1, 2010.
This may or may not be a tough battle. Last year the bill had quite a bit of support from both Houses and a favorable report from a Joint Committee and much of the groundwork has already been laid. By the same token, legislators are already familiar with the Affiliates perspective and understand our business (a little) so we have a head start. Connecticut Affiliates are urged to contact their legislators via phone and email to express their opinion on this bill. Please contact me if you need help in drafting an email or with talking points.
Begin contacting legislators today. If possible make every effort to attend the hearing on March 15. Affiliate Advocacy will continue to work on the issue and will help any one who needs it. Voicing your opinion to legislators does have an impact.
In addition to working on the legislation, make sure you have prepared your business model. I know many of you did so last year so it should be easier. Any affiliate who needs guidance on how to prepare should get in contact with me. Preparing will minimize the impact should the legislation pass.
