Amazon Seeks Tax Abatements in Connecticut

Printer-friendly versionPrinter-friendly version

While Amazon.com has agreed with the state of Connecticut to begin collecting and remitting sales tax in the state as of November 1, 2013, the online retailer is now seeking multi-year property tax abatements and other exemptions from Windsor, Connecticut, in exchange for opening a distribution center in the town.

According to the Hartford Courant, Amazon is seeking a five-year, 80 percent property tax abatement and a 50 percent reduction in building permit fees as part of its proposed 1.5 million-square-foot distribution center in Windsor. The article noted that officials for the online retailer met with the Windsor Economic Development Commission on August 27 to explain their request and to provide more details about the distribution center.

Steve Fischer, executive director of the New England Independent Booksellers Association, said that Amazon.com has offered Windsor a “lousy” deal. “After years of fighting to collect sales tax, as every other Main Street business does, Amazon is back with hat in hand asking for millions of dollars in tax abatements and cheap building permits,” he said. Regarding the value of such large concessions, he noted that “too many New England towns have made this sort of deal with large corporations only to realize a few years later the actual toll it took on their local citizenry. There is no historical evidence to suggest that if Windsor accepts these terms that they will have a different outcome.”

Amazon has agreed to spend $50 million on a facility in the state and would hire 300 people, said Kevin B. Sullivan, commissioner of the state Department of Revenue. Windsor is one of the “few finalists” for the Amazon.com facility.

Windsor Town Manager Peter Souza told the Courant that “Amazon officials proposed a 70 percent tax abatement, combined with an additional five percent tax abatement to offset the higher wages the company pays and another five percent for architectural and sustainable energy upgrades planned for facility.”

The reduction in permit fees would cost Windsor approximate $500,000 in revenues, Souza added.

Moreover, the Courant noted the Amazon abatements would “dwarf” the ones it approved for Dollar Tree, which built a million-square-foot distribution center in town last year. Dollar Tree was given a 40 percent abatement.

Democratic Mayor Donald Trinks noted he was in favor of the abatements tied to wages and architectural upgrades, though he added the town needs to weigh the overall impact. Any abatement must be approved by the town council.