Any business that sells goods or taxable services within the state of Connecticut to customers located in Connecticut is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Connecticut must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.
Do you need to get a Sales Tax certificate in Connecticut?
You may need a Sales Tax Certificate if any of the following apply your business:
- You have a physical office or place you conduct
- You sell or ship products to a buyer in Connecticut
- You have a distribution location such as a storage area or warehouse space with inventory
- You have employees physically present in Connecticut for more than 2 days per calander year (including independent contractors, sales persons, representatives, or agents)
- Your business delivers merchandise in the state of Connecticut
Your business owns real or personal property
- Your business has economic presence (businesses who make over $250,000 in sales annually or more than 200 transactions)
- Your business has taxable services in the state of Connecticut
What constitutes taxable services in Connecticut State?
The majority of service businesses are not taxable in Connecticut. The exceptions would be service business that manufactures or fabricates a product. Additionally, transportation services are exempt
Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Connecticut?
As a wholesale company conducting business in the state of Connecticut, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.
Do you need to collect sales tax on shipping and handling of merchandise?
If you sell tangible goods in Connecticut that are taxable than you would charge sales tax on shipping and handling charges.
Is there sales tax on drop shipments in the state of Connecticut?
A drop shipment is where a seller (most times out of state ) sells a product which is then delivered to a consumer by a third party shipper. In most instances, drop shipments in Connecticut are exempt and therefor are not required to have sales tax added
Are there any exemptions to taxable items sold?
Certain Motor vehicles, safety apparel, certain medical goods and equipment, groceries, college textbooks, raw materials and machinery, child car seats, and bicycle helmets and machinery are tax exempt