HARTFORD, Conn. -- Online discount retailer Overstock.com Inc. says it has canceled ad contracts with Connecticut affiliates rather than collect the state's sales tax recently extended to online sales.
The Salt Lake City-based company said Tuesday it believes the law requiring out-of-state retailers to collect sales tax is unconstitutional. Web sites that get a share of the sales price when an online customer buys a product through an Overstock.com link will no longer be paid.
The 6.35 percent tax, which applies to online sales for the first time, takes effect July 1. The state expects to raise $9.4 million.
Gov. Dannel P. Malloy was asked about Overstock.com's decision. He said he supposes the tax could have an impact on other businesses, but that he is not familiar with how much business Overstock.com does in Connecticut.