Complying with sales Connecticut tax rules can be a huge burden on small businesses. Tracking taxable transactions and filing returns on time can be difficult, especially when out-of-state sales are involved. The State of Connecticut has a statewide sales tax rate of 6.35%. It does not have local sales taxes. The state’s taxable goods and services include many types of products and services, including food, clothing, footwear, fuel, and electronics. It also taxes certain categories of services such as repair, management consulting, and telecom. The state also taxes alcoholic beverages.
If you’re selling taxable items in Connecticut, you must register for a sales and use tax permit through the Department of Revenue Services (DRS) myconneCT online center. You’ll need to provide your federal employer identification number (FEIN), business name, and any responsible owners or officers’ names and Social Security Numbers.
The State of Connecticut has adopted economic nexus rules in response to the 2018 Wayfair Supreme Court decision. These rules require remote sellers who meet a threshold of $100,000 in gross annual sales or 200 or more separate transactions to collect and remit sales tax.
How to File Connecticut Sales Tax?
The state of Connecticut has a pretty straightforward process for sales tax filing and payment. First, register your business through the Department of Revenue Services (DRS) website or by mail with form REG-1. Once you’re registered, you’ll receive a unique sales tax registration number. It’s a good idea to display this number prominently at your place of business.
Next, file and pay online through myconneCT on the DRS website. You’ll need to select your filing frequency, which is typically based on your business’s size and sales volume. Then, enter your gross receipts and deductions. Be sure to check the box for any plastic bag use, which is taxed at $0.10 per bag.
Remote sellers must collect sales tax once they exceed $100,000 in gross annual sales or 200 separate transactions. The state also taxes certain digital products, such as media streaming services and eBooks. However, rules can vary, so be sure to consult the DRS website for more details.