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Learn the fundamentals of sales tax
Do you need to collect sales tax in Connecticut?
You’ll need to collect sales tax in Connecticut if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Connecticut?
Connecticut considers a seller to have physical nexus if you have any of the following in the state:
- An office or place of business
- An employee present in the state for more than 2 days per year
- Goods in a warehouse
- Ownership of real or personal property
- Delivery of merchandise in Connecticut in vehicles owned by the taxpayer
- Independent contractors or other representatives in Connecticut for more than 2 days per year
You can click here to read exactly what the Connecticut Department of Revenue (Connecticut’s taxing authority) has to say about what constitutes sales tax nexus in Connecticut.
Do you have economic nexus in Connecticut?
Connecticut considers vendors who make more than $100,000 in gross receipts during the 12-month period in gross revenue AND 200 or more separate transactions on the previous calendar year’s sales to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Connecticut’s economic nexus guidance for businesses here, or read more about economic nexus in every state here.
Is what you’re selling taxable?
Many services are subject to sales tax in Connecticut.
Tangible products are taxable in Connecticut, with a few exceptions. These exceptions include certain groceries, some clothing, safety gear like firearm locks, child car seats and bike helmets, compact fluorescent bulbs, college textbooks, medical equipment and certain motor vehicles. Click here for more about tax exempt goods in Connecticut.
And for one week a year, the state has an annual sales tax holiday that exempts clothing and footwear under $100.
It can be a headache when buyers claim a sales tax exemption, but you can find links to customer exemption certificates for Connecticut and other states here.
To calculate sales and use tax based on street address and zip code, consult the TaxJar sales tax calculator.
Is SaaS taxable in Connecticut?
SaaS is taxable in Connecticut. SaaS for personal use is taxed at the full state rate, but SaaS for business use is only taxed at the rate of 1%. (Source)
How to get a sales tax permit in Connecticut
You have several options to register for your Connecticut sales tax permit:
- Register online at the MyConnectCT
- Fill out form REG-1 and remit it, along with a check for Connecticut’s sales tax permit application fee of $100, to:
Department of Revenue Services State of Connecticut
PO Box 2937
Hartford CT 06104-2937
- You can also visit a Connecticut Department of Revenue field office to apply.
You need this information to register for a sales tax permit in Connecticut:
- Business identification information
- Major business activity
- Business entity type
- All business owners and officers
Connecticut requires a $100 fee to apply for a sales tax permit.
How to Collect Connecticut Sales Tax If You Have a Location in Connecticut
Connecticut is one of the few states that only has a statewide sales tax rate. There are no local sales tax rates, which means that collecting sales tax is easy. No matter if you live in Connecticut or out of state, charge a flat 6.35% in sales tax to your customers in Connecticut. The same goes if you have nexus in Connecticut because you sell on FBA.
The Connecticut state sales tax rate is 6.35%.
Should you collect sales tax on shipping charges in Connecticut?
The rule states that if the items that you are shipping are taxable, the shipping charges are also taxable. If you are shipping non-taxable items like food items, then the shipping is not taxable.
Read a full explanation of sales tax on shipping in Connecticut here.
When are Returns Due?
When you file and pay Connecticut sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Connecticut?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Connecticut, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Connecticut sales tax returns are always due the last day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Connecticut you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Connecticut
Calculating how much sales tax you should remit to the state of Connecticut is easy with TaxJar’s Connecticut sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Connecticut sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Connecticut
You have two options for filing and paying your Connecticut sales tax:
- File online File online at the Connecticut Department of Revenue Services. You can remit your payment through their online system. Connecticut requires that taxpayers pay electronically.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.