Connecticut Sales Tax Rates

Total Range for 2024

6.35%

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Connecticut Sales Tax Variations

While Connecticut has a general sales tax of 6.35%, some items have different rates:

  • 1% for computer & data processing services and some software
  • 2.99% for boats, boat motors, and related items
  • 4.5% for cars sold to active military stationed in CT
  • 7.35% for meals and certain drinks
  • 7.75% for luxury cars (> $50,000), expensive jewelry (> $5,000), and high-end clothing/accessories (> $1,000)
  • 9.35% for short-term car rentals (<= 30 days)

Why do you need to collect sales tax in Connecticut?

If you’re selling goods and services in Connecticut then sales tax might apply! To determine your obligation, you must understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Connecticut, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within Connecticut exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

In Connecticut, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.

Is what you’re selling taxable in Connecticut?

Here’s our quick overview of whether or not what you’re selling will be taxable in Connecticut, but remember that there could be and are always exceptions to these rules:

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How to register for sales tax in Connecticut

Here’s a breakdown of how to register for sales tax in Connecticut:

Online Registration:

  1. Go to the myconneCT portal: https://drs.ct.gov/eservices/_/ 
  2. Click on “New Business/Need a CT Registration Number?”
  3. Register for an account or log in if you already have one.
  4. Select “Sales Tax” as the tax type you are registering for.
  5. Provide the required business information
  6. Pay the $100 application fee electronically (direct payment from checking/savings or credit card with a convenience fee).

Mail-in Registration:

  1. Download Form REG-1
  2. Complete the form with your business information.
  3. Include a check for $100 made payable to “Department of Revenue Services – State of Connecticut” with your application.
  4. Mail the completed form and check to the address provided on the form.

How to collect sales tax in Connecticut

    1. Register for a Sales Tax Permit: Apply online through the myconneCT portal. Alternatively, mail a completed Form REG-1 to them.
    2. Determine the Correct Tax Rate: Most goods have a 6.35% sales tax rate.
    3. Collect Tax at the Time of Sale: Add the appropriate sales tax to the advertised price of your taxable goods or services.
  • Keep Accurate Records: Maintain detailed records of your sales, including taxable and non-taxable items, and the amount of sales tax collected for each transaction.
  • File and Pay Sales Tax Returns: Connecticut requires electronic filing and payment of sales tax returns through myconneCT.

Example:

Let’s say you run a small clothing store in Connecticut and a customer purchases a jacket for $75.00 (before tax). Here’s how to calculate the sales tax:

  • Convert the sales tax rate into a decimal:  6.35% / 100 = 0.0635
  • Multiply the sales tax rate by the item price:  0.0635 * $75.00 = $4.76
  • Item price: $75.00 + Sales tax: $4.76 = Total Price: $79.76

FAQs

Do you have a physical nexus in Connecticut?

A business has a physical nexus in Connecticut, which triggers sales tax collection obligations, if it has any of the following:

  • Physical Presence:
    • An office or place of business in Connecticut (e.g., store, warehouse)
    • Employees who are physically present in Connecticut for more than 2 days per year (traveling salespeople, representatives)
  • Inventory:
    • Storing goods in a Connecticut warehouse, even if they’re owned by a third-party fulfillment service (like Amazon FBA)
  • Real or Personal Property Ownership:
    • Owning land, buildings, vehicles, or other tangible property located in Connecticut
  • Delivery of Merchandise:
    • Using your own vehicles to deliver products directly to Connecticut customers
Do you have an economic nexus in Connecticut?

Connecticut, like many states, also has economic nexus laws. This means exceeding a certain sales threshold within the state (currently $100,000) can create nexus, even without a physical presence. Plus there is a transaction threshold of 200 sales, which if exceeded also triggers your nexus.

What is use tax in Connecticut?

In Connecticut, use tax applies to purchases made outside the state that you use within Connecticut. It ensures that you pay a similar tax to the sales tax you would have paid if you bought the item in Connecticut.

You owe use tax on any taxable purchases made out-of-state that you bring to use in Connecticut, unless you paid sales tax at the time of purchase at a rate equal to or exceeding the Connecticut sales tax rate (generally 6.35%).

Do you need a seller/reseller permit?

In Connecticut, a seller’s permit, also known as a sales and use tax permit,  is required for most businesses that will be selling at retail in the state. This applies to:

  • Individuals
  • Corporations
  • Partnerships
  • All other business entities
How to get a sales tax permit/license in Connecticut?

There are three ways to register for a sales tax permit in Connecticut:

  • Online: This is the preferred method and can be done through the Connecticut Department of Revenue Services (DRS) myconneCT portal: https://portal.ct.gov/DRS/Sales-Tax/Tax-Information
  • By Mail: You can download and complete Form REG-1, Connecticut Sales and Use Tax Registration Application, and mail it with a $100 application fee to the address provided on the form.
  • In-Person: Visit a Connecticut Department of Revenue Services field office to apply in person.
When are Connecticut's Returns Due?

The due dates for filing and paying Connecticut sales tax returns depend on the filing frequency assigned to you by the Connecticut Department of Revenue Services (DRS). This filing frequency is primarily based on your business’s sales volume.

Here’s a breakdown of the filing frequency and corresponding due dates:

  • Monthly Filers: If your business has a high sales volume, you might be designated as a monthly filer. In this case, your sales tax return and payment are due on or before the 20th day of the following month. For instance, the return and payment for sales made in February would be due by March 20th.
  • Quarterly Filers: For businesses with a moderate sales volume, the DRS might assign you quarterly filing. The due dates for quarterly filers are:
    • April 30th: Covers sales from January – March (Q1)
    • July 31st: Covers sales from April – June (Q2)
    • October 31st: Covers sales from July – September (Q3)
  • Annual Filers: Businesses with a low sales volume may be classified as annual filers. The annual return and payment for all sales made throughout the year are due by January 31st of the following year.
How to file sales tax in Connecticut?

Filing Process:

  1. File Electronically: Connecticut mandates electronic filing and payment of sales tax returns through the myconneCT portal.
  2. Log in or Create an Account: If you haven’t already, create an account or log in to your existing myconneCT account.
  3. Select “Sales and Use Tax”: Choose the “Sales and Use Tax” option within the myconneCT portal.
  4. Complete the Online Return: The portal will guide you through completing the electronic return (Form OS-114). Enter the required information, including your sales data and any deductions you may qualify for.
  5. Calculate and Pay Tax Liability: The system might calculate your sales tax liability based on the information you entered. You can then review and confirm the amount.
  6. Submit and Pay: Once everything looks accurate, submit the return electronically. You can also make a direct payment through myconneCT using various options (checking/savings account or credit card with a convenience fee).

Remember to file a return by the due date, even if you had no sales tax to report for the period. In this case, submit a “zero return.”

Is anyone exempt from sales tax in Connecticut?

In Connecticut, there are no exemptions for people themselves, but there are exemptions for certain types of purchases. Here’s a breakdown of who typically qualifies for sales tax exemptions:

  • Charitable organizations: Sales tax generally doesn’t apply to purchases made by qualifying charitable organizations for their regular charitable functions.  However, this exemption  does not apply to all their sales. There are exemptions for occasional sales, sales where part of the purchase price is a donation, and sales by certain school-related entities, but it’s best to check with the Department of Revenue Services (DRS) for specifics.
  • Government agencies:  Purchases by government agencies are generally exempt from sales tax.
  • Specific goods and services:  Connecticut exempts the sale of certain goods and services from sales tax. These include:
    • Food for home consumption
    • Prescription drugs and medical devices
    • Farm equipment
    • Certain types of machinery
    • Services (unless specifically taxed, like repairs)

Contact Yonda Tax Today

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