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Deb is the head of marketing at Numeral. He has worked with the likes of Shopify and Wonderment and has helped countless ecommerce stores scale seamlessly. With a background in finance, he often finds himself advising stores on sales tax and good financial systems.
January 15, 2024 Reviewed by
Kevin is a licensed CPA in the state of California. Prior to Numeral, Kevin operated multiple ecommerce businesses and worked at KPMG as a tax advisor.
Sales tax can get confusing. This guide on Connecticut's sales tax provides everything you need to know about the laws and regulations.
In this articleSales tax can get confusing. This guide on Connecticut's sales tax provides everything you need to know about the laws and regulations.
| State taxing authority | Connecticut Department of Revenue Services |
|---|---|
| Connecticut base sales tax rate | 6.35% |
| Local tax rates | None |
| 2023 Connecticut sales tax rate | 6.35% |
| Website | portal.ct.gov/DRS |
| Tax Line | 860-297-5962 |
The Connecticut sales tax rate in 2023 is 6.35%. This comprises a base rate of 6.35% plus no additional mandatory local rates. Since there are no local taxes, the 6.35% statewide rate applies uniformly across the state.
To calculate Connecticut sales tax, multiply the 6.35% tax rate by the purchase price. For instance, if the purchase price is $100, the sales tax would be $6.35.
The penalty for underpayment of Connecticut sales tax is 15% of the tax due or $50, whichever is greater. Late payments are also subject to interest at 1% per month.
Destination-based sales tax states tax transactions based on where the purchaser receives the product. Origin-based sales tax states tax transactions based on where the seller is located.
Connecticut is a destination-based sales tax state. Sales tax is collected based on where the purchaser receives the product, not where the seller is located.
Connecticut is not a Streamlined Sales Tax state. The Streamlined Sales Tax Project (SSTP) aims to simplify sales tax collection across states, but Connecticut has not joined the SSTP or implemented its Streamlined Sales and Use Tax Agreement (SSUTA).
| Type of nexus | Threshold |
|---|---|
| Physical presence | Any physical presence in the state |
| Economic nexus | 200+ transactions in Connecticut in 12 months Or $100,000+ in gross receipts from Connecticut sales |
Yes, wholesalers in Connecticut require a seller's permit, even if they only make sales for resale. The permit requirement applies to anyone making sales of tangible goods in the state.
Yes, you need a seller's permit in Connecticut, even for temporary sales. This includes selling at craft fairs, trade shows, or other short-term events.
Connecticut provides sales tax exemptions for many types of goods and services, including:
No, most grocery food items are exempt from sales tax in Connecticut. However, prepared meals, candy, soft drinks, and other specified items are taxable.
Yes, digital products like software, ebooks, music, movies, etc., are subject to Connecticut sales tax. The tax rate is 6.35% unless it falls under the 1% computer services category.
Yes, SaaS is considered a digital service and is taxable in Connecticut. The tax rate is 6.35% unless the SaaS involves computer/data services, which are taxed at 1%.
Yes, Connecticut taxes several categories of services, including repair, management consulting, telecom, and certain contractor services. See the full list of taxable services.
Connecticut levies excise taxes on alcohol, tobacco, gasoline, and other fuels:
Connecticut has also legalized recreational marijuana but has not yet implemented marijuana excise taxes.
Remote sellers with no physical presence in Connecticut must collect and remit sales tax once they exceed $100,000 in gross annual sales or 200 separate transactions.
Connecticut requires prepaid sales tax on the following motor vehicle fuels:
Let’s look at the steps to collect sales tax in Connecticut now.
Out-of-state sellers must register with the Connecticut Department of Revenue Services (DRS) and obtain a Connecticut seller's permit if they meet the economic nexus thresholds:
These thresholds apply to sales made in the prior 12-month period.
Once these economic nexus thresholds are met, out-of-state sellers must register for a Connecticut seller's permit. This can be done online through the DRS website.
With a seller's permit, out-of-state sellers can collect and remit Connecticut sales tax even without having a physical presence in the state. The seller's permit allows you to conduct business and make sales to Connecticut customers legally.
Some other ways to reach sales tax nexus for out-of-state sellers include:
Yes, Connecticut sellers should collect sales tax on shipping charges associated with taxable sales. If the shipped items are subject to sales tax, the shipping and delivery charges are also taxable.
This applies regardless of whether the seller or a third party performs the shipping. The charges are considered part of the sales price.
If taxable and non-taxable items are shipped together in one package, sellers can prorate the shipping charges based on the proportion of taxable products. Only the portion attributed to the taxable items is subject to sales tax.
All Connecticut sales and use tax returns must be filed and paid electronically using the Department of Revenue Services (DRS) Taxpayer Service Center (TSC).
Connecticut retailers registered for sales tax cannot file paper returns or make payments by check. Electronic filing and payment are mandatory.
Some key steps for electronic filing include:
Electronic payment options include direct withdrawal from a bank account (free), as well as payment by credit card or debit card (fees apply).
Connecticut assigns filing frequencies of monthly, quarterly, or annual based on anticipated sales tax liability.
The sales tax return is due on the last day of the month following the end of the filing period.
The due dates for each filing period are.
Monthly Filing Deadlines:
| Month | Due Date |
|---|---|
| January | February 28/29 |
| February | March 31 |
| March | April 30 |
| April | May 31 |
| May | June 30 |
| June | July 31 |
| July | August 31 |
| August | September 30 |
| September | October 31 |
| October | November 30 |
| November | December 31 |
| December | January 31 |
Quarterly Filing Deadlines:
| Quarter | Months | Due Date |
|---|---|---|
| Q1 | Jan - Mar | April 30 |
| Q2 | Apr - Jun | July 31 |
| Q3 | Jul - Sep | October 31 |
| Q4 | Oct - Dec | January 31 |
Annual Filing Deadline:
| Period | Due Date |
|---|---|
| Jan 1 - Dec 31 (Year) | January 31 |
Even if you made no taxable sales or owe no tax for a period, you must file a Connecticut sales tax return.
Connecticut imposes a penalty of 15% of unpaid taxes due or $50 for late return filings, whichever is greater. Late tax payments also incur interest at 1% per month.
Due dates vary based on filing frequency - monthly, quarterly, or annual. See the schedules above for each period's exact due date.
Yes, every retailer must file a Connecticut sales tax return for each period even if you collected $0 sales tax.
Yes, you can request a filing extension for up to 30 days by submitting Form CT-8809, Request for Extension of Time to File Informational Returns, before the original due date.
Yes, you can file an amended OS-114 return to correct errors or omissions from a previous return. You must pay any additional tax due plus applicable interest and penalties.
The penalty is 15% of unpaid tax due or $50, whichever is greater. Late payments also incur interest at 1% per month until the balance is paid.
Connecticut's audit and appeals process involves several steps if a business is audited by the Department of Revenue Services (DRS).
The process begins when the auditor contacts the business to schedule the sales tax audit. The auditor will review records and returns to check for unpaid taxes.
If the audit finds discrepancies, the business can contest the findings with the auditor first. If the issues are not resolved, the company can file an appeal with the DRS Appellate Division.
If the appeal is unsuccessful, the final step is to appeal to the Connecticut Superior Court. Having an experienced representative is crucial during the appeals process.
The typical Connecticut sales tax audit process is:
The auditor will request access to all sales records, financial statements, invoices, bank statements, and other documents needed to verify sales tax compliance.
The auditor will compare returns to sales records to confirm all taxable sales were reported. They will examine documentation for exempt sales and out-of-state sales.
The auditor may also request purchase records to conduct a use tax review. This ensures all taxable purchases are appropriately taxed.
If the business disagrees with the audit findings, it can contest them first with the auditor informally.
Failing that, a formal appeal can be filed with the DRS Appellate Division within 60 days of the notice of assessment.
If the appeal is unsuccessful, the final step is filing a request with the Connecticut Superior Court. Experienced representation is highly advisable during appeals.
Here are the steps for registering for sales tax in Connecticut:
To register for a Connecticut Sales and Use Tax Permit, complete Form REG-1—Business Taxes Registration Application online or by mail.
You'll need to provide basic information like your business name, address, ownership details, and a description of your business activities.
There is a $100 registration fee to obtain a sales tax permit. Once registered, you can begin collecting and remitting sales tax.
Remote sellers must collect Connecticut sales tax if they exceed $100,000 in annual gross receipts from sales to Connecticut or 200 or more retail sales shipped to Connecticut in the prior 12-month period.
The fee to register for a Connecticut Sales and Use Tax Permit is $100. There are no recurring annual fees, but the permit must be renewed every two years.
Agencies to register within Connecticut
There you have it—an in-depth guide on Connecticut's sales tax regime. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.
Deb is the head of marketing at Numeral. He has worked with the likes of Shopify and Wonderment and has helped countless ecommerce stores scale seamlessly. With a background in finance, he often finds himself advising stores on sales tax and good financial systems.
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