Standard rate
In Connecticut, the standard sales tax rate is 6.35%, which applies to most goods and services sold in the state.
Reduced rate
There are no specific reduced rates for general items, but there are exemptions for certain products and services such as groceries, prescription medications, and medical equipment.
Sales of tax-free products and services
There are no specific tax-free products and services listed in Connecticut.
Who is obliged to register sales tax in Connecticut
When you sell in Connecticut and have “sufficient activity” in Connecticut, you need to be registered to collect and pay sales tax in Connecticut. Connecticut requires that any merchant with a sales tax permit file a sales tax return on your due date, even if you don’t have any sales tax to report or pay.
Threshold
Starting July 1, 2019, remote sellers must collect and remit sales tax in Connecticut if they exceed $100,000 in sales and conduct 200 or more transactions in the state within a year. This applies to both tangible goods and digital services, such as software and digital downloads, meaning companies selling these types of products must comply with the same thresholds.
Marketplace thresholds by state
The special rules are applicable to the SAAS business.
Software as Service Tax Thresholds by state.
Online Marketplaces
- If all your sales in Connecticut come from a marketplace reseller platform, in this case, you can’t register for paying sales tax in Virginia. Your marketplace promoter pays the sales tax itself.
- If you sell through your own website, then you need to be registered for paying sales tax if you have 200 or more retail sales in Connecticut and have at least $250,000 in gross.
- If you do not meet the threshold, you are not obliged to register.
- A marketplace facilitator is considered the retailer of each sale that he has simplified to his seller. Therefore, each marketplace facilitator must:
- Collect and remit sales tax on each sale delivered in Connecticut;
- Be responsible for all obligations and duties imposed by Connecticut sales and use tax laws, as if the marketplace facilitator was the retailer of such sale, including timely filing all returns;
- Keep records and information to ensure proper collection and remittance of the tax, including any exemption certificates, resale certificates, or other relevant documentation.
- In accordance with the law, to ensure that marketplace sellers are not responsible for collecting and remitting sales tax on the same sales occurring through the marketplace facilitator’s forum, the marketplace facilitator should either enter into an agreement with its marketplace sellers that explicitly provides that the marketplace facilitator will collect and remit sales tax on all taxable sales, or provide its marketplace sellers with a properly completed Certificate confirming that the facilitator is registered to collect sales tax.
Sales tax payment and filing date
Depending on your tax liability, determine your filing frequency – either monthly, quarterly, or Annual:
- Annual – $0 to $83.33;
- Quarterly – $83.34 to $333.33;
- Monthly – $333.34 and up.
Returns are always due on the 20th day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is due the next day. Quarterly filing periods end on the last days of March, June, September, and December.
Penalty and Interest:
- Late Filing Penalty of $50, plus 1% per month of the tax imposed;
- Late Payment Penalty 1% of the unpaid tax bill for each month (or fraction of a month) of delinquency.
Connecticut Sales Tax Holiday
Connecticut does have an annual sales tax holiday focused on back-to-school shopping. This tax-free week runs from the third Sunday of August to the following Saturday. For 2024, it will take place from August 18 to August 24. During this period, clothing and footwear items priced at less than $100 per item are exempt from the state’s sales tax. However, this exemption does not apply to certain items such as jewelry, sports uniforms, protective equipment, accessories, and insoles.
Connecticut Sales Tax Nexus
- Physical Presence: Companies with a physical presence, including offices, warehouses, or employees, must collect sales tax.
- Economic Nexus: Established if a company has gross sales in Connecticut exceeding $100,000 and conducts 200 or more separate transactions with buyers in the state within the previous 12-month period.