Yesterday (March 25, 2010) the Joint Finance Committee of the state of Connecticut has passed its version of the Internet sales tax bill (HB 5481) or the “act concerning the collection and remittance of the sales tax by remote sellers” (italics mine). There were 35 votes “for” versus only 13 “against”. Bill HB 5481 specifies “that sales tax is due when an online retailer uses an in-state affiliate to sell its products” (italics mine / full text here).
Melanie Seery of Affiliate Advocacy clarifies:
The next step is a final recheck of the bill (which should be quick as it is a repeat of last years bill) and it will then be assigned a calendar number. Once it has a calendar number it will go to the floors for full vote. The Finance Committee is a Joint Committee meaning it has members from both houses. Support for the bill existed among both Senators and Representatives.
Affiliates should continue to prepare for bill passing to minimize the impact. Identify replacements for any vulnerable merchants. A few merchants have gone on record as likely to terminate but there are solutions.
Termination of affiliates is never a good option. As noted elsewhere, a number of online merchants (e.g.: ToysRUs) have been collecting sales tax from Internet customers for quite some time already, and end-customers don’t mind. Both online merchants and CT-based affiliates should be on the alert, and prepared to adjust their business strategies depending on the way the situation develops further.