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Amazon Rejects Connecticut Tax Abatements

  • Sep 16, 2013 | Gail Cole

Online retail behemoth Amazon is on track to collect sales tax in Connecticut beginning November 1, 2013. This news was shared by Governor Daniel P. Malloy in February 2013, when he also announced that Amazon would "invest $50 million in Connecticut and create hundreds of new full-time jobs" over the next two years. The governor called the arrangement "a win for our state's taxpayers, our main street retailers, and our workforce." Speaking on behalf of Amazon, Vice President of Global Public Policy Paul Misener said, "We are delighted…."

Amazon has taken the first steps toward creating a 1.5 million-square-foot distribution center in Windsor Connecticut. A purchase agreement for the 90-acre location of the center is in place, and developer KTR Capital Partners is working toward having the land-use permits approved. Yet according to The Courant, a Connecticut newspaper, "Amazon has withdrawn its request for tax abatements and reduced building permit fees." The abatements would have saved the company 80% in property taxes and 50% in building permit fees if approved by the town council.

But why?

Amazon's actions could have been prompted by Windsor Deputy Mayor Alan Simon's recent suggestion that "the town drive harder bargains concerning abatement approvals, including commitments to higher wages, local hiring and accountability clauses…." Mr. Simon argued that the town should gain something if it stands to lose some $4.5 million in thanks to abatements and lowered building permit fees.

It remains to be seen whether Amazon will continue to move forward in Windsor or chose to build a warehouse elsewhere in the state, in a town where tax abatements and reduced building permit fees flow more freely.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.