Connecticut: Sales Tax Handbook
What constitutes sales tax nexus in Connecticut?
One of the more complicated aspects of Connecticut sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Connecticut, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Connecticut, the vendor must register for a Connecticut sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Connecticut.
Sales Tax Nexus in Connecticut
According to the law in Connecticut, retailers who have tax nexus can be defined as "engaging in business". This meams that to have tax nexus, the business must meet a minimum of one of the following requirements:
Having an office or any other place of business within the state's boundaries,the storage of goods in a warehouse in the state, the ownership of any type of real or personal property in Connecticut, an employee, independent contractor, or other representative who is present within the state for more than two days per year, or deliveries of merchandise within Connecticut by vehicles which are owned by the taxpayer.
For additional details on sales tax nexus law in Connecticut, see the nexus information page from the Department of Revenue Services at http://www.ct.gov/drs/cwp/view.asp?a=1430&q=265836
Taxation of Internet-Based Sales in Connecticut
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, Connecticut may or may not charge sales tax on Internet-based transactions. In Connecticut, the click-through nexus was applied to every applicable sale in the state as of May 4, 2011.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Connecticut, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Connecticut?
The folks at the sales tax compliance company Avalara are an approved Connecticut sales tax partner, and you can use their free Connecticut nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Connecticut sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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