Do you need to collect and remit sales tax in Connecticut?
Generally, businesses that have a physical presence in Connecticut, such as an office or retail store, must collect and remit sales tax to the state. But what about remote sellers? Connecticut sales tax nexus (more about what nexus is below) encompasses remote sellers and service providers in its laws as well, if their sales or transactions of taxable goods and services exceed a specific amount.
A note about exemptions: Some sales and services are exempt from Connecticut sales tax. A few examples of these are:
- Items sold exclusively for use in agricultural production (if the purchaser has a current Farmer Tax Exemption permit)
- Items used in the Biotechnology industry
- Bicycle helmets
- Breast pumps and breast pump supplies
- Child car seats
You can find a full list of exemptions here.
Do you have sales tax nexus in Connecticut?
Sales tax nexus is classified into two main categories: physical and economic. Physical nexus refers to your business having a tangible presence within the state, such as an office or store. On the other hand, economic nexus is based on economic activity, such as meeting a specific sales threshold within the state. We break down economic and physical nexus in Connecticut below.
Physical sales tax nexus in Connecticut
Examples of what constitutes physical sales tax nexus in Connecticut are:
- In-state offices
- Storage of goods in a Connecticut based warehouse
- Ownership of any personal property in-state
- In-state employees
- In-state independent contractors
Economic sales tax nexus in Connecticut
Economic nexus is triggered when a business sells more than $100,000 worth of taxable product or services into Connecticut, and/or their Connecticut transactions exceed 200.
Navigating the complexities of sales tax nexus can be overwhelming, especially if your business operates across multiple states. If you’re feeling the pressure, we offer al-a-carte Nexus Reviews as a hassle-free way to stay up to date with changing nexus regulations, ensuring compliance and giving you peace of mind.
Are marketplace facilitators required to collect and remit sales tax in Connecticut?
As of December 1, 2018, Connecticut implemented legislation that puts the onus of collecting and remitting sales tax on marketplace facilitators, rather than individual remote sellers who use these platforms. So, if you are a remote seller using a marketplace facilitator, you don’t need to worry about Connecticut sales tax.
What platforms are marketplace facilitators?
Not sure what a marketplace facilitator is? In short, marketplace facilitators are companies that provide a platform or service for third-party sellers (you) to sell their products or services to customers. The facilitator collects payment from the customer, processes the transaction, and may also manage shipping and returns.
Filing Connecticut Sales Tax
Once you find that your business has nexus in Connecticut, the first step toward filing will be to register your business with the Connecticut Department of Revenue Services (DRS). While many states are making the slow but sure switch to online filing and registration, Connecticut has jumped ahead of the game, requiring all businesses to register and manage their sales and use tax accounts on their electronic filing system, myconneCT.
Note: There is a $100 registration fee for all new businesses.
After registering your business on myconneCT, you will receive a temporary sales and use tax permit until your registration is processed. After that, DRS will assign a monthly, quarterly, or annual filing frequency based upon your business’ amount and volume of sales.
Now you are ready to file your sales and use taxes via your myconneCT account, using the online Form OS-114.
Note: Even if no Connecticut sales tax is collected during your filing frequency, you must still file a zero return.
Let us file for you!
If filing sales tax returns is too overwhelming or time-consuming, you’re not alone. Running a business is demanding work and filing tax returns is a nuisance. We at SalesTaxSolutions are here to make things easier! As a company, we help businesses like yours deal with the many state-by-state regulations and file your sales tax returns for you. We’ve got 20 plus years of knowledge and experience to help you get back to saving time and making money as soon as possible. Message, email or call us at 888-544-7730 for a free quote today!
When are sales tax returns due in Connecticut?
We mentioned earlier about filing frequencies. Most states, including Connecticut, issue one of three filing frequencies to businesses: monthly, quarterly, or annually. The due dates for these frequencies are as follows:
- Monthly – businesses with a higher volume of sales or transactions will typically need to file monthly. Monthly sales tax returns in Connecticut are due on or before the last day of the month. For example, a return for January will be due by the last day of February.
- Quarterly – Quarterly sales tax returns in Connecticut are also due on or before the last day of the month. Each quarter include three months, starting in January, so businesses with quarterly frequencies will only file four times a year. For example, if you need to file your first quarter sales tax, your data will include January – February – March, and will be due by the last day of April.
- Annually – if your business is assigned an annual filing frequency, your sales tax return will be due by the end of January every year.