Connecticut Sales Tax on Software and Digital Products Connecticut: Sales Tax Handbook

Connecticut:

Are Software and Digital Products subject to sales tax?

While Connecticut's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of software and digital products in Connecticut, including canned software - delivered on tangible media, canned software - downloaded, custom software - delivered on tangible media, custom software - downloaded, customization of canned software and digital products. To learn more, see a full list of taxable and tax-exempt items in Connecticut.


Canned Software - Delivered on Tangible Media
TAXABLE
Sales of canned software - delivered on tangible media are subject to sales tax in Connecticut.

Canned Software - Downloaded
TAXABLE
In the state of Connecticut, so long as no tangible personal property was delivered to the buyer in addition to downloaded software, the software will be taxed at 1% rate applicable to computer and data processing services.

Custom Software - Delivered on Tangible Media
TAXABLE
In the state of Connecticut, some software is taxable at a rate of 1%, namely those which can be identified as computer and data processing services; with the tangible personal property being taxed at the general state sales and use tax rate. It should be noted that most custom software can be exempt if they are purchased in connection with machinery which is considered to be exempt under the biotechnology, manufacturing, or commercial printers and publishers exemption.

Custom Software - Downloaded
TAXABLE
In the state of Connecticut, if no tangible personal property was delivered to the purchaser in addition to downloaded software, the software is taxed at the 1% rate is considered to be applicable to any computer and data processing services.

Customization of Canned Software
TAXABLE
In the state of Connecticut, any computer and data processing services are considered to be taxable at a reduced rate.

Digital Products
TAXABLE
In the state of Connecticut, the digital products are taxed at reduced rate. This reduced rate is applicable to all computer and data processing services.



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Source: http://www.salestaxhandbook.com/connecticut/sales-tax-taxability/software-and-digital-products