Connecticut — Sales & Use Tax

Connecticut imposes sales and use tax under Chapter 219 of the Connecticut General Statutes on the gross receipts from three categories of transactions: (1) retail sales of tangible personal property, (2) rental or leasing of tangible personal property, and (3) rendering of certain enumerated services. The tax is imposed on retailers making sales at retail in Connecticut for consideration. The standard rate is 6.35%, though higher rates apply to specific categories including luxury items, motor vehicles over $50,000, meals, and room occupancy. Connecticut does not permit local jurisdictions to impose additional sales taxes.

Source: Conn. Gen. Stat. Chapter 219; CT DOR Sales Tax Information

Connecticut requires remote sellers to register and collect sales tax if they exceed both of the following thresholds during the preceding 12-month period ending September 30: (1) gross receipts of at least $100,000 from retail sales into Connecticut, and (2) 200 or more separate retail transactions. Both thresholds must be met; exceeding only one does not trigger nexus. Sellers meeting both thresholds must register and begin collecting tax on October 1 of the following year. This requirement took effect July 1, 2019.

Source: Conn. Gen. Stat. Chapter 219 § 12-407; Public Act 19-117

Connecticut imposes a 6.35% sales tax on retail sales of tangible personal property and the rendering of taxable services. This rate applies uniformly statewide; Connecticut does not authorize local jurisdictions to impose additional sales taxes. Certain categories of transactions are subject to different rates under the same statute.

Source: Conn. Gen. Stat. § 12-408

Connecticut taxes only those services specifically enumerated in statute; services are presumed exempt unless expressly listed. This contrasts with tangible personal property, which is presumed taxable unless exempted. Conn. Gen. Stat. § 12-407(a)(2) defines "sale" to include the rendering of enumerated services detailed in subsection (a)(37), including computer and data processing services, telecommunications services, real property maintenance and repair services, repair and maintenance of tangible personal property, storage services, spa and salon services, interior design, veterinary services, pet grooming, and armored car services, among others. The Department of Revenue Services maintains a comprehensive list of taxable services based on the statutory enumeration. Practitioners must verify whether a specific service appears on the statutory list; general categories or similarity to listed services do not establish taxability.

Source: Conn. Gen. Stat. § 12-407; CT DOR Services Subject to Sales and Use Taxes

Connecticut requires marketplace facilitators to collect and remit sales tax on sales they facilitate for marketplace sellers, effective December 1, 2018. A marketplace facilitator is deemed the retailer of each facilitated sale and assumes all collection, remittance, and recordkeeping obligations as if it were the seller. A facilitator is any person who (1) facilitates at least $250,000 in retail sales by marketplace sellers during the prior 12-month period by providing a forum listing tangible personal property or taxable services, (2) collects payment from customers and remits to sellers, and (3) receives compensation for these services. Marketplace sellers are relieved of collection duty if the facilitator provides a written certificate (Form DRS-055) certifying registration and collection responsibility, or has a contract explicitly requiring the facilitator to collect tax on all facilitated sales.

Source: Conn. Gen. Stat. § 12-408e; CT DOR Policy Statement 2018(7), OCG-8

Connecticut requires every person who intends to engage in business as a retailer of tangible personal property or taxable services to obtain a Sales and Use Tax Permit from the Department of Revenue Services before commencing operations. The registration requirement applies to all business entities — individuals, corporations, partnerships, and other organizations — regardless of the number of sales made or the amount of tax collected. Manufacturers and wholesalers must register in addition to retailers. All building contractors, including subcontractors, must obtain a permit prior to providing any services in Connecticut, even if the services are not taxable or the client is tax-exempt.

The DOR charges a non-refundable $100 registration fee for each initial Sales and Use Tax Permit. Businesses operating multiple physical locations must obtain a separate permit for each location; each location-specific permit requires its own display. Connecticut law does not provide an exception to the registration requirement for casual or isolated sales — defined as infrequent sales of a nonrecurring nature made by persons not engaged in the business of selling tangible personal property or taxable services.

Remote sellers who exceed both economic-nexus thresholds ($100,000 in gross receipts from retail sales into Connecticut and 200 or more separate retail transactions during the preceding 12-month period ending September 30) are required to register. Both thresholds must be met; exceeding only one does not trigger the registration obligation. Sellers meeting both thresholds must register and begin collecting tax on October 1 of the following year. Marketplace facilitators with $250,000 or more in facilitated retail sales during the prior 12-month period must also register and assume collection responsibility for sales they facilitate.

Permit display requirement

Connecticut General Statutes § 12-409(d) requires every permit holder to display the Sales and Use Tax Permit conspicuously at the business location for which it was issued. Customers must be able to see it. For temporary sales events — flea markets, craft shows, trade shows, antique shows, or fairs — sellers must display the permit prominently at their booth or table. Failure to display the permit can result in a ten-day written notice for non-compliance and a hearing; if the permit holder cannot demonstrate reasonable cause, the Department may suspend or revoke the permit under Conn. Gen. Stat. § 12-409(f).

Penalties for operating without a permit

Under Conn. Gen. Stat. § 12-409(h), operating without a valid Sales and Use Tax Permit triggers automatic civil penalties: $250 for the first day a person engages in business without the required permit, and $100 for each subsequent day. The penalty may be waived only if the person proves that the failure to obtain or renew the permit was due to reasonable cause and was not intentional or due to neglect. Willful failure to obtain a permit — when the person is already aware of the obligation — is a criminal offense punishable by a fine of not more than $500, imprisonment of not more than three months, or both, for each offense.

Non-transferability and change-of-ownership rules

Sales and Use Tax Permits are not transferable. If a purchaser acquires an existing business, the purchaser may not use the permit issued to the previous owner and must obtain a new permit in the purchaser's own name. Similarly, if the ownership structure of a business changes — for example, a sole proprietorship becomes a partnership or corporation — a new permit is required.

Source: CT DOR Sales and Use Tax Information; Conn. Gen. Stat. Chapter 219

Connecticut imposes an effective 7.35% sales and use tax on meals sold by eating establishments, caterers, and grocery stores. This rate consists of the standard 6.35% base sales tax rate plus an additional 1% surcharge specifically imposed on meals and certain beverages. The statute defines "meals" by reference to Conn. Gen. Stat. § 12-412(13) and the implementing regulation at Conn. Agencies Regs. § 12-426-29, which describe meals as food products furnished, prepared, or served in such form and portions that they are ready for immediate consumption, including take-out and to-go sales.

What constitutes a meal

Under Conn. Agencies Regs. § 12-426-29, "meals" means food products for human consumption sold in such form and portions that they are ready for immediate consumption and are of a type normally consumed on or near the location of the seller. The definition expressly includes items sold on a take-out basis. The regulation clarifies that meals do not include bulk sales of food products unless meant for consumption on or near the seller's location; examples of bulk sales that are not meals include ice cream in half-gallon containers, whole pies, cold sliced meat sold by the pound, and cold salads sold by the pound. Conversely, whole pizza pies and buckets of fried chicken are treated as meals because they are not bulk sales under the regulatory framework.

Covered beverages

The additional 1% surcharge also applies to spirituous, malt, or vinous liquors; soft drinks, sodas, and beverages ordinarily dispensed at bars and soda fountains; and beverages sold in connection with meals. This brings the effective tax rate on these beverages to 7.35% when sold by an eating establishment, caterer, or grocery store as part of a meal transaction.

Who must collect the 7.35% rate

The statute imposes the 7.35% effective rate on sales by three categories of sellers:

• Eating establishments: Conn. Agencies Regs. § 12-426-29(2) defines an eating establishment to include restaurants, cafeterias, coffee and donut shops, fast food restaurants, ice cream shops, pizzerias, mobile food trucks or carts, refreshment stands, sandwich shops, snack bars, and vending machines.

• Caterers: Conn. Agencies Regs. § 12-426-29(3) defines a caterer as a person engaged in the business of preparing meals and either serving them on premises designated by the customer, or delivering (but not serving) meals to premises designated by the customer.

• Grocery stores: Effective October 1, 2019, the 7.35% meals tax applies uniformly to meals sold at grocery stores. Prior to that date, grocery stores taxed meals under different rules. CT DOR Policy Statement 2019(5) clarified that sandwiches, grinders, coffee, or tea prepared in a supermarket (including at a delicatessen counter) for takeout are taxable at 7.35%, as are meals sold in areas of a supermarket where food is intended to be consumed on-site, such as snack bars or food courts—even if the purchaser takes the meal off premises.

Effective date and statutory history

The 1% additional tax on meals was enacted by 2019 Conn. Pub. Acts 117, §§ 323–324, and became effective October 1, 2019, applicable to sales occurring on or after that date. Before October 1, 2019, meals were subject to the standard 6.35% rate. The authorizing statutes are Conn. Gen. Stat. § 12-408(1)(I) for sales tax and Conn. Gen. Stat. § 12-411(1)(I) for use tax; both provisions impose the additional 1% "with respect to the sale [or acceptance or receipt] of meals … sold by an eating establishment, caterer or grocery store" and the enumerated beverages "in addition to the tax imposed under subparagraph (A)."

Application to dine-in, takeout, and delivery

The 7.35% rate applies uniformly to meals whether consumed on the seller's premises, taken off-site, or delivered. The regulation expressly includes take-out sales in the definition of "meals," and CT DOR Policy Statement 2019(5) confirms that delivery services that purchase meals from restaurants for resale and delivery to customers must charge sales tax on the charges for the meals, including the delivery fee, in the taxable gross receipts. The readiness for immediate consumption—not the location of consumption—determines whether an item is a meal subject to the 7.35% rate.

Cross-reference: exemptions

Certain sales of meals remain exempt even though the general 7.35% rate applies to most meal sales. Conn. Gen. Stat. § 12-412(9) exempts sales of meals, candy, confectionery, and beverages (except alcoholic beverages) in educational institutions to members of those institutions, including sales using prepaid meal plan cards. Conn. Gen. Stat. § 12-412(27) exempts meals sold through coin-operated vending machines or at unattended honor boxes (though candy, confectionery, and soda sold through such machines remain taxable unless priced at 50 cents or less). Additional exemptions exist for meals sold by nonprofit organizations under specified conditions (Conn. Gen. Stat. § 12-412(94)) and for meals made to exempt charitable or governmental entities meeting all the requirements in Conn. Agencies Regs. § 12-426-29(c)(3).

Source: Conn. Gen. Stat. § 12-408; Conn. Gen. Stat. § 12-411; 2019 Conn. Pub. Acts 117, §§ 323–324; Conn. Agencies Regs. § 12-426-29; CT DOR Policy Statement 2019(5).pdf)

Connecticut imposes a 7.75% sales and use tax rate on sales of luxury goods—a higher rate than the standard 6.35% base rate. This rate applies to three categories of high-value items, determined by sales-price thresholds. The luxury rate is imposed on the entire sales price of the item, not merely on the amount exceeding the threshold.

Motor vehicles exceeding $50,000

Connecticut taxes motor vehicles with a sales price exceeding $50,000 at 7.75% on the entire sales price. For purposes of this threshold, "motor vehicle" has the meaning provided in Conn. Gen. Stat. § 14-1, but excludes: (1) motor vehicles subject to the reduced 4.5% rate for nonresident military personnel stationed in Connecticut under Conn. Gen. Stat. § 12-408(1)(C); (2) motor vehicles with a gross vehicle weight rating (GVWR) over 12,500 pounds; and (3) motor vehicles with a GVWR of 12,500 pounds or less that are not used for private passenger purposes but are instead designed or used to transport merchandise, freight, or persons in connection with any business enterprise and issued a commercial registration or more specific type of registration by the Department of Motor Vehicles.

A motor vehicle priced at $55,000 is taxed at 7.75% on the full $55,000, not at the standard 6.35% rate on the first $50,000 and 7.75% only on the $5,000 increment. The same threshold-crossing rule applies to jewelry and clothing/accessories.

Jewelry exceeding $5,000

Jewelry—whether real or imitation—with a sales price exceeding $5,000 is taxed at 7.75% on the entire sales price. The statute does not distinguish between precious-metal jewelry, costume jewelry, or other forms; the category "jewelry, whether real or imitation" is defined solely by sales price. A piece of jewelry priced at $6,000 is taxed at 7.75% on the full $6,000.

Clothing, footwear, and accessories exceeding $1,000

Connecticut imposes the 7.75% luxury rate on the following items when the sales price exceeds $1,000 per item:

• Articles of clothing or footwear intended to be worn on or about the human body
• Handbags
• Luggage
• Umbrellas
• Wallets
• Watches

Each of these items is evaluated individually; the $1,000 threshold applies per item, not per transaction. An item of clothing priced at $1,200 is taxed at 7.75% on the entire $1,200. The luxury rate does not apply to special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except when used for the athletic activity or protective use for which it was designed; such items remain subject to the 6.35% standard rate (or may be exempt under separate provisions). This exclusion is codified at Conn. Gen. Stat. § 12-407(a)(2)(S) and applies to the definition of "articles of clothing or footwear" throughout the sales tax statutes.

Interaction with the clothing exemption and sales tax holiday

Connecticut exempts clothing and footwear under $50 per item from sales tax year-round under Conn. Gen. Stat. § 12-412(77). Items priced at $50 or above but not exceeding $1,000 are taxable at the standard 6.35% rate. Items priced above $1,000 are taxable at the 7.75% luxury rate. During the annual sales tax holiday (the third Sunday through the following Saturday in August each year under Conn. Gen. Stat. § 12-407e), the exemption threshold for clothing and footwear rises to $100 per item, but items priced at $100 or more remain taxable at their applicable rates (6.35% for items $100 to $1,000, and 7.75% for items over $1,000).

Sales tax vs. use tax; effective dates

The 7.75% luxury rate applies to both sales tax under Conn. Gen. Stat. § 12-408(1)(H) and use tax under Conn. Gen. Stat. § 12-411(1)(H). The luxury tax on jewelry and clothing was enacted in 2011; the luxury tax on motor vehicles over $50,000 was also enacted in 2011. The current rate of 7.75% has been in effect since July 1, 2011 (increased from 7% under 2011 Conn. Pub. Acts 6, effective July 1, 2011, applicable to sales occurring on or after that date).

Source: Conn. Gen. Stat. § 12-408; Conn. Gen. Stat. § 12-411; Conn. Gen. Stat. § 12-407(a)(2)(S); Conn. Gen. Stat. § 12-412(77); Conn. Gen. Stat. § 12-407e