The 10 Basics Every Connecticut Business Should Know About Sales Tax

What is the Sales Tax Rate in Connecticut?

The current sales tax rate is 6.35%. However, as of October 2019 there is an additional 1% sales tax on meals and certain beverages (learn more by clicking here), bringing the rate to 7.35% in these instances.

What is Sales Tax in Connecticut?

Sales tax in Connecticut applies to the retail sale, lease, or rental of most goods and taxable services.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

The following links can help you determine what is taxable and what isn’t in Connecticut: Taxable Services | Exemptions

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a  pass through tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.

When Is My Sales Tax Payment Due in Connecticut?

Connecticut sales tax returns are due the last day of the month following the reporting period. In general, when you first register, you will be set up to file sales tax returns on a monthly basis. Click here for a list of due dates.

How Do I Know How Much Sales Tax to Charge? 

The current sales tax rate in Connecticut is 6.35%.  The final and definitive answer is always the sales tax rate posted on State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In Connecticut all sales tax is paid directly to the State.

How Do I Manage Tax Exempt Sales?

Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Connecticut  has severe penalties for missing tax payments. You can find the penalties for late payments here. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

Connecticut Sales and Use TAX HELP:

Connecticut Department of Revenue

(860) 297-5962