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Overstock Not The Only Company To End Relationship With State Companies

by | May 24, 2011 9:17pm () Comments | Commenting has expired | Share
Posted to: Business, Labor, Legal, State Budget

The Courant was the first to report that Overstock.com has pulled its business from affiliated companies in Connecticut due to the adoption of the so-called Amazon tax, but it’s not the only one.

Tom Caporaso, of Clarus Marketing Group in Middletown, said he’s been receiving notices from Internet sellers on a daily basis.

Here is a list Caporaso, who runs freeshipping.com, sent Tuesday evening:

HSN, 1800 PetMeds, Tog Shop, AppleSeeds, Steep and Cheap, Whiskey Militia, Chain Love, Bonk Town, Hayneedle, Indochino, Moonstruck Chocolate, Etronics, Dyson, Build.com, FaucetDirect.com, LightingDirect.com, VentingDirect.com, Handlesets.com, VentingPipe.com, Lamps Plus, Glyde, Casual Living, Luggage Online, Costume Kingdom, NBTY, CSN Stores, Cookware.com, Gardener’s Supply, Tea Forte, MotorMint, Design Linens Outlet, Buy Costume, Celebrate Express, Overstock.com, OfficeFurniture, Birthday Express, Costume Express, 1st Wishes, and Northern Tools.

“Did the representatives really think they weren’t going to do this?” Caporaso who warned lawmakers earlier this year that this would happen if they forced remote sellers to collect sales taxes for the state. “We are getting a couple everyday now and I am sure it will pick up as we get closer to July 1.”

Department of Revenue Services Commissioner Kevin Sullivan wrote this letter to Gov. Dannel P. Malloy’s Budget Director Ben Barnes in April warning him the state will have difficulty collecting the taxes from these companies.

Sullivan wrote that no state that has passed similar legislation has been able to collect the tax. But Sen. Eileen Daily, co-chairwoman of the Finance Committee, said there have been adjustments to the language, which will help Sullivan collect the tax. That language still needs to be drafted and approved by the General Assembly.

However, Sen. Andrew Roraback, R-Goshen, remained skeptical of the state’s ability to collect sales tax from Internet companies.

“Companies act rationally,” Roraback said. “I think there are going to be more companies leaving the state when the tax is enacted on July 1.”

He said he thinks Sullivan is a smart guy and if he says it can’t be collected, then it probably can’t.

“We’re supposed to be in shock and awe when everyone knew what was going to happen?” Roraback said.

But Daily said Roraback shouldn’t be so quick to judge. She said in the next few days Sears will be announcing its inviting people to contact them and are ready and eager to service any customer online. She said other companies are expected to follow and fill the void left by more fickle Internet retailers unwilling to collect the tax.

“This bill is doing exactly what we intended by strengthening Connecticut companies,” Daily said. “Now that a Utah company is pulling out we’re strengthening our own.”

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Comments

(9) Archived Comments

posted by: ... | May 24, 2011  10:44pm

...

Just to clarify, is this tax apart of the budget bill or a separate bill. If so I truly hope Malloy will veto it. This issue is a national one that we lost the race to getting fame for. Once the supreme court makes the right decision, we should act from there.

posted by: wmwallace | May 24, 2011  11:02pm

Senator Daily can’t see the writing on the wall when it is right in front of her face. All they had to do is look at Rhode Island, New York, North Carolina and Alaska to see what happened when those states enacted the same measure. The companies pulled out as they are in Connecticut.

posted by: gerardw | May 25, 2011  6:11am

This is a poorly written story. They are not pulling their business—folks can still buy from these merchants, right? They’re just severing relationships with business entities (e.g. bloggers) in the state.

posted by: Hebee | May 25, 2011  7:23am

We are open for business and our business is Unemployment. I would like to think that the voters of Connecticut will remember the irresponsible foolishness of this Legislature when they vote next year. They won’t. Other States have only one Fools Day on April 1st each year. Connecticut has two Fool’s Days; one on April 1st and the other on Election Day. We Fools keep voting in the same old Fools. It is embarrassing.

posted by: Disgruntled | May 25, 2011  9:02am

Don’t despair!
Connecticut is open for business!

posted by: OutOfOutrage | May 25, 2011  1:56pm

OutOfOutrage

Ah, I get it Eileen. The goal of this bill is to restrict the competition so that our businesses do better. That’s the dumbest thing I’ve ever seen! 

Not only does this law NOT benefit CT businesses, it harms them directly by removing referral links to CT businesses from sites like Amazon, Overstock, etc. Not to mention the fact that if any of these distributors ever had a thought of setting up a distribution center in CT, that is now long gone!  I honestly don’t know how this woman finds her way to the capital every day.

posted by: kevin47 | May 25, 2011  3:47pm

say what?!?! CT residents can still shop directly at overstock.com…..how does this strenghten CT companies? earth to senator daily - overstock is internet based…we don’t care where they are located, we can shop there whenever we want. they are not going to collect the sales tax. HELLO….

posted by: j2345 | May 25, 2011  3:49pm

Senator Daly clearly doesn’t understand her own legislation that she pushed through the system. Overstock will still be selling to CT residents, just like they do today… the only difference is by terminating advertising relationships they will sidestep the legislation enacted and will not collect any sales taxes- just as everyone knew would happen. How sad that our legislators don’t even understand the nature and impact of legislation that they are enacting. The end result? No sales tax revenue for CT, growing local businesses are harmed, and guess what… “our own” local retailers are in the exact same position they are in today.

posted by: Noteworthy | May 25, 2011  9:50pm

Eileen Daily is just stupid. Sears may service and collect the tax, but that’s because they have to. They have stores here. As consumers in Connecticut, we can still receive goods and services from these companies, it’s just that they will not be shipping our products to us from CT. And businesses here who used to ship to us, won’t and the companies who used to get referral dollars, won’t get those dollars any more. This is what happens when people like Daily think they are smarter than a 5th grader, that they understand business and commerce and the free market or taxation consequences. We really need to elect people to the legislature who have basic common sense and have the ability to add and subtract; and tell the truth about state spending. This bill was a needless assault on consumers and businesses in CT who are already bearing a heavy tax burden. Now, Daily and her brethern have made it worse.

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