AN ACT CONCERNING THE COLLECTION AND REMITTANCE OF THE SALES TAX BY REMOTE SELLERS.

OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 ↓ (860) 240-0200

http: //www. cga. ct. gov/ofa

HB-5481

AN ACT CONCERNING THE COLLECTION AND REMITTANCE OF THE SALES TAX BY REMOTE SELLERS.

Agency Affected	Fund-Effect	FY 11 $	FY 12 $
Department of Revenue Services	GF - Potential Revenue Gain	8. 4-9. 3 million	8. 4-9. 3 million

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill requires certain remote sellers who have no physical presence in Connecticut to collect sales tax on applicable Connecticut sales. This is estimated to result in a potential General Fund revenue gain of $8. 4 million to $9. 3 million annually beginning in FY 11, which is associated with additional sales and use tax collections.

The estimate is based on data from a comparable 2008 New York state law, and has been adjusted for differences in population and sales tax rate. It should be noted that retailers with affiliate programs in other states that have enacted similar laws have terminated such affiliate agreements, thus eliminating the legal basis for establishing nexus. The revenue gain described above assumes that the bill does not result in the termination of affiliate agreements.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.