State May Reach For Online Sales Tax Cookie Jar

Connecticut and most other states have watched for much of the past decade as Internet retail transactions increasingly have cut into their sales tax collections.

Though consumers here always have been required to pay tax on their online purchases, political pressures, a lack of direction from the federal government and even legal challenges from Internet retail giants have stalled efforts to collect that money.

But with a record-setting, $3.67 billion budget deficit looming just six months away, and new data showing online sales are bouncing back quickly from the recession, Connecticut officials may have no choice in the coming legislative session but to pursue a pot of online taxes possibly worth nearly $50 million per year.

"We can't afford it," Gov.-elect Dan Malloy said Wednesday, referring to projected $48.3 million annual loss Connecticut faces according to a 2009 study by the University of Tennessee. "My administration is looking at that (challenge) very seriously."

The Democratic governor-elect is not alone in pledging to review a long-ignored problem that has sparked bipartisan concern.

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