Navigating Sales Tax in Connecticut: A Detailed Guide

Key Takeaways

• The Connecticut sales tax rate is 6.35% statewide and applies uniformly across the state. Connecticut does not impose local sales taxes.
• Connecticut holds an annual sales tax holiday in August during which qualifying clothing and footwear under $100 per item are exempt from sales tax.
• Most remote sellers must collect and remit Connecticut sales tax if they have $100,000 or more in sales and 200 or more transactions into the state.
• Marketplace facilitators (such as Amazon and Etsy) are required to collect and remit sales tax on behalf of their sellers.
• Certain digital goods and software-as-a-service (SaaS) used exclusively for business purposes can be taxed at a reduced rate.

Recent Legislative & Administrative Updates

Expanded Exemptions

Connecticut’s 2025 legislative session expanded sales tax exemptions for certain specialized vehicles and industry services beginning mid-2025. In addition, legislations modified exemptions on sales of gold and silver bullion, with those changes scheduled to take effect on July 1, 2027.

Because exemption rules can be highly specific, businesses should consult DRS updates for specifics and ensure proper tax classification.

Digital Goods & SaaS

Connecticut classifies many digital products and SaaS as taxable tangible personal property. While most consumer-facing SaaS is taxed at the standard 6.35% tax rate, certain SaaS products sold exclusively for business use may qualify for a reduced rate of 1%.

Need help navigating Connecticut sales tax? Partner with SalesTaxSolutions.US for precise nexus determination, filing support, and compliance planning. Our experts keep your business up-to-date and audit ready!

Do You Need to Collect and Remit Sales Tax in Connecticut? 

In general, businesses with a physical presence in Connecticut—such as an office, warehouse, retail store, or inventory—must collect and remit Connecticut sales tax.

However, physical presence is not the only trigger. Remote sellers and service providers may also have tax obligations under economic nexus rules if they exceed specific sales or transaction thresholds into the state.

What Is Taxable and What Is Exempt?

Taxable items and services in Connecticut generally include:

• Tangible personal property
• Digital goods and software
• Most services (unless specifically exempt)
• Rentals or leases of goods
• Hotel, motel, or bed-and-breakfast rentals

Common Connecticut sales tax exemptions include:

• Groceries and most food for home consumption
• Prescription medications and qualifying medical devices
• Certain agricultural and safety equipment
• Resale purchases (with a valid resale certificate)
• Most baby supplies

Note on clothing and footwear: Although normally taxable, these items may be exempt during the annual tax holiday. Alternatively, Connecticut also imposes a luxury tax rate (7.75%) on high-end apparel and accessories that exceed certain price thresholds.

Do You Have Sales Tax Nexus in Connecticut? 

Sales tax nexus is the connection between your business and Connecticut that obligates you to collect and remit sales tax. Like most states, Connecticut recognizes two types of nexus: physical and economic.

Physical sales tax nexus in Connecticut 

Physical nexus is generally established if your business has any of the following: 

• In-state offices or retail locations
• Storage of goods in a Connecticut-based warehouse
• Ownership of personal property in-state
• In-state employees or independent contractors
• Temporary selling activities such as flea markets, craft fair, trade shows, or antique shows, even for a single day

Economic sales tax nexus in Connecticut 

Economic nexus is triggered when both of the following thresholds are met:

• More than $100,000 in gross sales of taxable products or services into Connecticut, and
• 200 or more separate transactions delivered into the state during a 12-month period

Both thresholds must be met before a business is required to register for a Connecticut sales tax permit. Businesses may choose to register voluntarily before reaching these thresholds; however, sales tax should never be collected until a valid sales tax permit has been issued by the state.

Are Marketplace Facilitators Required to Collect and Remit Sales Tax in Connecticut? 

Yes. Connecticut law requires marketplace facilitators—such as Amazon, eBay, Shopify’s Shop App, and Walmart’s online marketplace—to collect and remit Connecticut sales tax on behalf of sellers using their platforms.

This shifts the responsibility for collection from individual sellers to the marketplace facilitator.

What is a marketplace facilitator? 

A marketplace facilitator is a business or platform that operates an online marketplace and facilitates sales between third-party sellers and customers. These platforms typically handle key aspects of the transaction, such as listing products, processing payments, and sometimes shipping or customer service. Because of this role, many states—including Connecticut—require marketplace facilitators to collect and remit sales tax on taxable sales made through their platforms, rather than placing that responsibility on individual sellers.

Filing Connecticut Sales Tax 

Before collecting sales tax, businesses must register with the Connecticut Department of Revenue Services (DRS) through the myconneCT portal. 

There is a $100 registration fee for new sales tax permits. Permits renew automatically every two years at no additional cost as long as the business is in good standing.

All Connecticut tax returns must be filed online through myconneCT.

When Are Sales Tax Returns Due in Connecticut? 

When you apply for a sales tax permit, the DRS assigns a monthly, quarterly, or annual filing frequency based on your sales volume into Connecticut. Even if no sales tax is collected in a filing period, a zero return must still be filed.

Filing frequencies and due dates

1. Monthly: Typically required for businesses with higher sales volumes. Returns are due on or before the last day of the month following the reporting period. For example, a June return is due July 31.
2. Quarterly: Generally assigned to businesses with moderate sales volumes. Returns are due on the last day of the month following the end of the quarter. For example, a Q1 return (January–March) is due by April 30.
3. Annually: Often assigned to smaller sellers. Annual sales tax returns are due by the end of January and report sales from the prior calendar year.