Quick Highlights on Connecticut Sales Tax
| Detail | Value |
|---|---|
| State Sales Tax Rate Range | 6–6% |
| Base State Sales Tax Rate | 6% |
| Local Rate Range | 0–0% |
| Economic Nexus Sales Threshold | $100,000 |
| Transactional Threshold | 200 transactions (AND with sales threshold) |
| Reference Period | 12-month period ending on September 30 |
| Registration Deadline | The upcoming October 1 after the threshold is crossed |
| Revenue Authority | Connecticut Department of Revenue Services |
| Online Filing Portal | myconneCT |
As a business, do I need to collect sales tax in Connecticut?
Businesses are required to collect sales tax in Connecticut if they have a sales tax nexus in the state. This includes having a physical presence or reaching a specific sales level, which establishes an economic nexus. This is why understanding Connecticut state sales tax obligations is crucial for compliance.
Do I have a physical nexus in Connecticut?
A physical nexus in the state of Connecticut is established if your business has a physical presence in the state, like an office, warehouse, or store. Even temporary physical presence, like participating in trade shows or craft fairs, can create a nexus.
In Connecticut, physical nexus is typically triggered by employees or contractors engaged in customer-facing roles such as sales, marketing, or support.
How do I know if I have an economic nexus in Connecticut?
An economic nexus in Connecticut is determined by your sales volume. If your enterprise meets the threshold, you must register for a Connecticut sales tax permit, collect tax on sales shipped to Connecticut, and remit that tax to Connecticut Department of Revenue Services.
In Connecticut, economic nexus is established if your sales in the state exceed $100,000 AND the number of transactions exceeds 200, based on 12-month period ending on September 30.
Marketplace sales (e.g., Amazon, eBay) are included when calculating whether you've exceeded the Connecticut economic nexus threshold.
Sales made for resale are excluded from the nexus threshold calculation for Connecticut.
Non-taxable sales are included in the nexus threshold calculation for Connecticut.
Once you cross the threshold, you must register by The upcoming October 1 after the threshold is crossed.
Which goods are taxable in Connecticut?
Connecticut sales tax at 6% applies to:
- Retail sales of tangible personal property
- Most services, including computer and data processing services
- Lodging and hotel occupancy
- Prepared food and restaurant meals
- Admission charges to places of amusement
- Motor vehicle rentals
What items are exempt from sales tax in Connecticut?
Connecticut exempts the following from sales tax:
- Prescription drugs and medical devices
- Groceries (food products for home consumption)
- Clothing and footwear items under $50 per item
- Newspapers and magazines
- Farm equipment and supplies
- Residential energy (electricity and gas for residential use)
Is SaaS taxable in Connecticut?
In Connecticut, SaaS is partially taxable. The following categories are taxable:
Connecticut taxes computer and data processing services, which includes most SaaS products:
- Software delivered via the cloud (SaaS subscriptions): taxable at 1% (reduced rate for computer and data processing services)
- Pre-written software sold on a disc or downloaded: taxable at standard 6% rate
- Custom software development: generally not taxable as a professional service
The reduced 1% rate for computer and data processing services is a notable Connecticut-specific rule. Verify your product classification with a tax advisor.
If you are uncertain about the taxability of your specific software product in Connecticut, consult with a tax specialist.
How can a business get a sales tax permit in Connecticut?
To obtain a sales tax permit in Connecticut, businesses need to register with the Connecticut Department of Revenue Services. Registration can be completed online through the myconneCT.
You will need to provide detailed information about your business, including business type, ownership details, and the nature of your business activities.
When should a business file sales tax in Connecticut?
Sales tax returns in Connecticut are generally due on the Last day of the month following the reporting period for the previous period. Based on your annual tax liability, you may qualify for a less frequent filing schedule:
You can file your Connecticut sales tax return through the myconneCT at https://drs.ct.gov/eservices/.
Does Connecticut offer a timely filing discount?
Connecticut does not offer a timely filing discount or vendor compensation credit.
What are the penalties for late filing in Connecticut?
Connecticut imposes the following penalties for late or non-compliant sales tax filings:
- Failure to file: 10% of the tax due or $50, whichever is greater
- Failure to pay: 10% of the unpaid tax
- Underpayment of estimated tax: Additional assessments may apply
- Interest: Accrues at 1% per month on unpaid balances from the due date
Connecticut offers a voluntary disclosure program for businesses that come forward proactively before an audit is initiated.
Is shipping taxable in Connecticut?
In Connecticut, shipping and delivery charges are generally taxable when the underlying sale is taxable and the delivery charge is not separately contracted. Charges for delivery by a common carrier, separately stated, may be treated as non-taxable. Connecticut DRS guidance should be consulted for specific billing scenarios.
Does Connecticut have a Remote Seller program?
Connecticut requires remote sellers who exceed the economic nexus threshold to register, collect, and remit sales tax using standard state rates.