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Connecticut has just one sales tax rate of 6.35 percent for retail sales and services. None of the jurisdictions have an additional local sales tax. However, according to tax laws, the state has several separate taxes for certain industries, including leasing motor vehicles, sales of motor vehicles, and certain drinks.
Types of taxes
Some of the various types of sales and use tax Connecticut levies might change more often than the state’s sales tax. Check the tax rates frequently to ensure you charge the appropriate sales tax rate.
Sales and use tax
The state sales and use tax rate has several exceptions, including:
- Rental or leasing of passenger motor vehicles for 30 days or less: 9.35 percent.
- Sale of most motor vehicles for more than $50,000: 7.75 percent.
- Jewelry, whether imitation or real: 7.75 percent.
- Clothing, footwear, and accessories including luggage, handbags, umbrellas, watches, and wallets: 7.75 percent.
- Computer and data processing services: 1 percent.
- Motor vehicles to a nonresident member of the Armed Services and resident members of the Armed Services and their spouses, if they are stationed in Connecticut and are full-time active duty: 4.5 percent.
- Vessels, trailers to transport vessels, and motors for vessels: 2.99 percent.
- Meals and certain drinks: 7.35 percent.
Business taxpayers can claim sales tax and use tax, including these exceptions, on a combined sales and use tax return. Businesses that purchase goods for resale need a resale certificate so they do not have to pay taxes upon purchase.
The business must collect taxes on the resale of goods and services and remit taxes and reports to the state. If a business purchases retail goods for resale but uses the goods instead, the business must pay the use tax on the items used.
Marketplace sellers and other remote sellers who do not have a business location in Connecticut should collect Connecticut sales tax on tangible personal property sold to Connecticut residents. Most businesses collect sales and use tax for other states as a convenience for the buyer.
If a remote seller has less than 200 retail sales into Connecticut and has at least $100,000 in gross receipts during a 12-month period ending on September 30, the remote seller must register for a Connecticut sales tax account and pay sales tax through the portal.
If a remote seller does not collect sales tax, the Connecticut resident must pay use tax on the items and services purchased. If the purchaser is a business, it should be prepared to show a tax exemption certificate for any purchases meant for resale.
A marketplace facilitator is someone who:
- Facilitated retail sales of at least $250,000 during the last 12-month period;
- Collected receipts from customers and remits payments to marketplace sellers; and
- Receives compensation or some other consideration for his services.
Those who are considered marketplace facilitators must register with the Connecticut State Department of Revenue Services and obtain a Sales and Use Tax Permit.
Some industries have different sales and use taxes as follows:
- Room Occupancy: 15 percent for hotels, motels, lodging houses, and short-term home rentals. 11 percent for bed and breakfast establishments.
- Prepaid Wireless E 911 Fee: $0.68.
- Admission and Dues: Amusement, entertainment, recreation, movies, theaters, concerts, sporting events, amusement parks, sporting events – 10 percent. Certain venues and events must collect 5 percent. Movie tickets that cost more than $5 are charged a tax rate of 6 percent.
- Dry Cleaning Surcharge: Dry cleaners must charge the state tax rate of 6.35 percent plus a 1 percent surcharge for dry cleaning only (not laundering).
- Rental Surcharge: 2.75 percent (for machinery, such as bulldozers, etc.)
- Tourism Surcharge: For renting motor vehicles – $1 per day per rental.
- Cigarettes (Retailers and dealers): 217.5 mills per cigarette.
- Electronic Cigarette Products: 10 percent.
- Tobacco Products: 20 percent of the wholesale price.
- Motor Vehicle Fuel Tax for Diesel: $0.40.1 per gallon through June 30, 2022.
This list of taxes for different industries is not a complete list of taxes for different industries. To check what the retail sales tax is for a business’s industry that is not listed, contact a business tax attorney.
Registering for and filing Connecticut’s taxes
Businesses can register for an online account at myconneCT to file and remit sales and use taxes and other taxes levied by the state for sales of goods and services. A business must register for an account to make payments online.
Business taxpayers will need their Connecticut Registration Number or Federal Employer Identification Number (FEIN), the business’s legal name, and the PIN from TSC.
Taxes are due on a monthly or quarterly basis. If a business did not make sales for the monthly or quarterly period, it must still file a sales tax return.
If paying quarterly, the due dates for paying tax revenue are:
- April 30 for sales made from January 1 through March 31.
- July 31 for sales made from April 1 through June 30.
- October 31 for sales made from July 1 through September 30.
- January 31 for sales made from October 1 through December 31.
If the total sales tax due for a 12-month period from July 1 through June 30 is less than $1,000, the Connecticut State Department of Revenue Services will collect the next year’s taxes on an annual basis. The due date for annual taxes is January 31 of the next year.
If the business sales tax obligation is more than $4,000 for a 12-month period from July 1 through June 30, the Connecticut State Department of Revenue Services will collect the next year’s taxes on a monthly basis. Due dates for monthly tax returns are by the last day of the next month. For example, taxes collected from January 1 through January 31 are due by the last day in February.
Connecticut tax exemptions
Connecticut has several tax exemptions, including but not limited to:
- Bicycle helmets.
- Child car seats and booster seats.
- College textbooks.
- Connecticut flags and United States flags.
- Gun safety devices, including trigger and barrel locks, lockboxes, and gun safes.
- Food for human consumption, including coin-operated vending machine sales, and meals delivered to the homebound or elderly, and food purchased with SNAP benefits. Food tax exemptions do not count meals from eating establishments, whether the customer eats in or takes out. Candy, carbonated beverages, and alcoholic beverages are not subject to the exemption.
- Vegetable seeds for planting if they are for food for human consumption.
- Internet access services.
- Newspapers and magazines are sold by subscription.
- Medical equipment and goods.
- Prescription medications, needles and syringes.
- Blood plasma, blood, and oxygen are used in humans or animals.
- Hand controls and other special equipment for motor vehicles with physical disabilities.
- Telephone equipment that is designed for blind or deaf people.
- Life support equipment.
- Commercial fishing vessels.
- Materials related to the fishing industry, such as fishing nets, rope, and fuel used by the industry.
- Shoe repair services.
This list is not a complete list of sales tax exemptions, but these are the most common exemptions. For more tax information regarding exemptions, visit the Connecticut State Department of Revenue Services or contact a business tax attorney.
Calculating Connecticut’s sales and use tax rates
Because Connecticut has just one sales tax and no discretionary taxes, it is very easy to calculate your tax liability. Simply multiply each dollar of a sale by 6.35 percent. For example, on a sale of $10, the tax is (10 times .0635 = .635). The total of the sale and the tax is $10.64.
The sales tax in Connecticut is 6.35 percent on most goods and services.
While most states do not require businesses to collect their sales taxes, most businesses collect the taxes from the buyers. Businesses pay the tax to the appropriate state. If you do not charge the buyer taxes, notify the buyer that he must pay use tax.
Yes. You must file a sales tax return even if you did not make any sales.
Yes. The Connecticut State Department of Revenue Services has several tutorials related to creating and maintaining a tax account.
Connecticut exempts several services that a business renders at the residence of a disabled person, including:
- Window cleaning.
- Maintenance services.
You can pay by:
- ACH Debit for direct payment, which is recommended.
- Credit card.
- ACH Credit, which allows you to submit a return and make the payment at a later date.