Connecticut Introduces Affiliate Nexus Legislation.

Connecticut has introduced legislation that would require remote sellers with significant connection to an in-state seller to collect tax on sales into Connecticut. The primary purpose of this bill is to require Internet retailers with brick-and-mortar affiliates in Connecticut to collect and remit Connecticut sales tax. Remote sellers with the following types of affiliate relationships, who are involved in the processing of orders for customers located in Connecticut, would be deemed “engaged in business in the state.” If HB 6965 is enacted, the affiliate relationship under the new definition of “engaged in business in the state” would be created by a substantial ownership situation where either the remote seller has substantial ownership of an in-state retailer, or where the in-state retailer has substantial ownership of the remote seller. Also to qualify under the new definition, the in-state and remote retailers would be required to sell similar products using a similar business name, or the in-state retailer would need to be involved with advertising for the remote seller linked to in-state sales. If enacted, this bill would come into effect on October 1, 2005 and would apply to all sales occurring on or after that date. (HB 6965, Connecticut House of Representatives, introduced March 22, 2005)

Posted on March 28, 2005