Connecticut Sales Tax Guide

SALES TAX RATE:

6.35%

MAXIMUM LOCAL & COUNTY RATES:

None

Read this Guide

This guide simplifies compliance with Connecticut's sales tax code by breaking down the process into four easy steps:

• Taxable Goods and Services
• Register for Sales Tax
• Collecting Sales Tax
• File Your Sales Tax Return

Use a Professional Sales Tax Service:

One such reliable service:

TaxJar helps entrepreneurs with ecommerce sites calculate sales tax at checkout ($17/month)

Which Goods and Services Are Taxable?

Determining whether or not the products or services your company sells are taxable in Connecticut is the first step in sales tax compliance.

Traditional Goods or Services

Goods that are subject to sales tax in Connecticut include physical property like furniture, home appliances, and motor vehicles.

Prescription medicine, non-prescription medicine, and groceries are tax-exempt.

Connecticut charges a 8.1% or 25 cent per gallon excise tax rate on the purchase of gasoline.

Some services in Connecticut are subject to sales tax. You can view this page for a detailed list of taxable services from the Connecticut Office of Legislative Research.

Digital Goods or Services

A digital good or service is anything electronically delivered, such as an album downloaded from iTunes or a film purchased from Amazon.

Connecticut requires businesses to collect sales tax on the sale of digital goods or services. The rate at which the sales tax is applied is at a lowered rate of 1%.

How to Register for Connecticut Sales Tax

If you have determined that you need to charge sales tax on some or all of the goods and services your business sells, your next step is to register for a seller's permit. This allows your business to collect sales tax on behalf of your local and state governments.

In order to register, you will need the following information:

• Business identification information
• Major business activity
• Business entity type
• All business owners and officers

Register for a Seller’s Permit

Register for a Seller's Permit online through the Connecticut Department of Revenue website

Fee: $100.00

Expiration: 5 Years after the date the permit was issued.

Save Money with a Resale Certificate

With a resale certificate, also known as a reseller's permit, your business does not have to pay sales tax when purchasing goods for resale.

Download Resale Certificate

Download the Resale Certificate through the Connecticut Department of Revenue

Instruction: Present the certificate to the seller at the time of purchase.

Collecting Sales Tax

After getting your seller's permit and launching your business, you will need to determine how much sales tax you need to charge different customers. To avoid fines and the risk of costly audits, it's important for business owners to collect the correct rate of sales tax.

When calculating sales tax, you'll need to consider the following kinds of sales:

• Store Sales
• Shipping In-State
• Out-of-State Sales

Recommended: Use our Sales Tax Calculator to look up the sales tax rate for any Zip Code in the US.

Store Sales

After getting your seller's permit and launching your business, you will need to determine how much sales tax you need to charge different customers. To avoid fines and the risk of costly audits, it's important for business owners to collect the correct rate of sales tax.

When calculating sales tax there are two kinds of sales you'll need to consider:

• In-State Sales
• Out-of-State Sales

In-State Sales

Calculating sales tax on goods sold in Connecticut is easy. Simply charge the 6.350% flat sales tax rate on all items whether selling in store or shipping across the state.

Out-of-State Sales

Connecticut businesses only need to pay sales tax on out-of-state sales if they have nexus in other states. Nexus means that the business has a physical presence in another state.

Common types of nexus include:

• A physical location, such as an office, store, or warehouse
• An employee who works remotely or who is a traveling sales representative
• A marketing affiliate
• Drop-shipping from a third party seller.
• A temporary physical location, including festival and fair booths.

File Your Sales Tax Return

Now that you’ve registered for your Connecticut seller's permit and know how to charge the right amount of sales tax to all of your customers, you are all set to file your sales tax return. Just be sure to keep up with all filing deadlines to avoid penalties and fines.

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How to File

Connecticut requires businesses to file sales tax returns and submit sales tax payments online.

File the Connecticut Tax Return

File with the Taxpayer Service Center of the Connecticut Department of Revenue website.

How Often Should You File?

How often you need to file depends upon the total amount of sales tax your business collects.

• Annual filing: If your business collects less than $83.33 in sales tax per month then your business should elect to file returns on an annual basis.
• Quarterly filing: If your business collects between $83.33 and $333.33 in sales tax per month then your business should elect to file returns on a quarterly basis.
• Monthly filing: If your business collects more than $333.33 in sales tax per month then your business should file returns on a monthly basis.

Note: California requires you to file a sales tax return even if you have no sales tax to report.

Filing Deadlines

All Connecticut sales tax return deadlines fall on the 31st day of the month, unless it is a weekend or federal holiday, in which case the deadline is moved back to the next business day. Below is a list of this year’s filing deadlines:

Annual filing: January 31, 2020

Quarterly filing:

• Q1 (Jan. - Mar.): April 30
• Q2 (April - June): July 31
• Q3 (July - Sept.): October 31
• Q4 (Oct. - Dec.): January 31

Monthly filing: The 31st of the following month, or the next business day, e.g. April 30th for the month of March, or May 31st for the month of April.

For a complete list of deadlines, check out the Tax Filing Calendar on the Connecticut Department of Revenue website.

Penalties for Late Filing

Connecticut charges a late filing penalty of 2% of the recorded sales tax due if the filing is not more than 5 days late. After 5 days, the rate increases to 5% of the tax that is due. This rate applies if the filing date does not exceed 15 days; after that, the penalty increases to 10% of the sales tax that is due.

Connecticut charges an interest of 1% every month for the amount that is due on the sales tax return past the due date of the return. After the 1st month, the late filing penalty has reached the maximum rate and is now 110% of the original tax that was due. This value is what will be charged with 1% compound interest every month until the date of payment.