See Terms of Use for more information. Effective October 1, 2019, the budget bill increases the tax rate on alcoholic beverages other than beer. Do not delete! Department of Revenue Services: Chapter 202 Secs. “Digital goods” include audio and visual works, or audio-visual works, and reading materials or ring tones, that are electronically accessed or transferred. DTTL and each of its member firms are legally separate and independent entities. 340, amending Conn. Gen. Stat. 7373) and Senate Bill 72 (S.B. Connecticut's full 6.35 percent sales tax will apply to digital purchases. Effective July 1, 2019, the bill increases, from 25¢ to 30¢, the fee that Uber, Lyft and other transportation network companies must pay on each ride that originates in the state. 7424 implements a number of changes in tax laws relating to corporations for tax years beginning on or after January 1, 2019, unless otherwise noted. § 12-699(g)(1). Real estate conveyance tax. 14 H.B. Sess. A “short-term rental platform” is a physical or electronic place that allows such operators to display available accommodations to prospective guests, including a store, booth, website, catalog, or dedicated software application. § 12-704c(d). Room occupancy tax collection: The legislation requires "short-term rental facilitators" who facilitate retail sales of at least $250,000 during the prior 12-month period by short-term rental operators by providing a short-term rental platform, to obtain a sales tax permit to collect the room occupancy tax (15% sales and use tax for hotels and lodging houses and 11% for bed and breakfast establishments) and collect and remit tax for the sales that they facilitate for short-term rental operators on their platforms. ... Taxes on digital downloads and streaming services will rise from 1% to 6.35 percent, the standard sales tax rate. The legislation also contains a number of changes that impact sales and use tax, generally applicable for sales occurring on or after October 1, 2019, (unless otherwise noted), including the following: Under the bill, the capital base rate decreases to 2.6 mills in 2021; 2.1 mills in 2022; 1.1 mills in 2023; and zero mills beginning in 2024. Assemb., Reg. Social login not available on Microsoft Edge browser at this time. In addition to lowering the threshold for economic nexus and extending it to sales of services, the bill eliminates the condition that such retailers be regularly or systematically soliciting sales in Connecticut. H.B. Discover Deloitte and learn more about our people and culture. 23, 2007). Connecticut is unusual in that it imposes a “luxury goods” tax on specified purchases. Please enable JavaScript to view the site. The 6.35% sales tax rate in Hartford consists of 6.35% Connecticut state sales tax. 7424, Sec. 12 H.B. Groceries, prescription drugs and non-prescription drugs are exempt from the Connecticut sales tax Counties and cities are not allowed to collect local sales taxes 322, amending Conn. Gen. Stat. Lowers the sales tax economic nexus threshold, Changes to the pass-through entity tax, including expanding the tax base to include guaranteed payments and updating the language controlling a nonresident partner’s obligation to file an individual return, A new corporate tax credit for payments made by businesses for student loans issued to employees. Excludes from the PET base any item treated as an itemized deduction for federal income tax purposes. The new legislation will head to Governor Ned Lamont's desk for his signature. You can obtain all of this information from inside TSC. Connecticut law imposes a 6.35% sales tax on all retail sales and certain business and professional services (CGS § 12-408). The annual credit was $500 and could be claimed for five years after graduation. Corporations separately compute their liability under the regular corporation business tax rate of 7.5% and the corporate excess (capital base) tax equal to 3.1 mils per dollar of capital base with the tax not to exceed $1 million or be less than $250 and pay the larger of the two amounts (but not less than $250). § 12-426-18 Cosmetic medical procedures; Credit information and reporting; Dry Cleaning and laundry services. However, there are exceptions: The tax on the rental or leasing of a passenger motor vehicle for a period of 30 consecutive calendar days or less is 9.35%. Connecticut has a statewide sales tax rate of 6.35%, which has been in place since 1947. remain taxable at the 1% rate for computer and data. § 12-214(b)(8)(A). The state general sales tax rate of Connecticut is 6.35%. 328, amending Conn. Gen. Stat. (Conn., June 26, 2019). 7424, Sec. On and after July 1, 2021, single-use plastic checkout bags are banned. 328, amending Conn. Gen. Stat. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons. All rights reserved.Website Designed by Graff Public Solutions, LLC, DRS must mail, electronically or by first class mail, an information return form by August 15, 2019, to employers, Employers must return it by October 1, 2019, Public Policy & Legislative Agenda, TANF Case Management Program - Basic Needs, Connecticut Council of Family Service Agencies. 7424 repeals the $250 business entity tax. Admissions tax: The admissions tax rate is reduced for certain venues from 10% to 7.5% for sales occurring on or after July 1, 2019, and from 7.5% to 5% for sales occurring on or after July 1, 2020. Each electronic cigarette wholesaler must file a return and pay the tax for the immediately preceding calendar month with the DRS Commissioner, on or before the last day of each month. Lowers the economic nexus threshold to 200 transactions and $100,000 of annual gross receipts. § 12-407(a)(13). This message will not be visible when page is activated. Sess. Payroll tax study: Under the legislation, a payroll commission is established and is directed to evaluate the implementation of a 5% employer payroll tax beginning January 1, 2021. Exempts nonresident, individual members from filing a Connecticut individual income tax return provided such member’s individual tax liability would be satisfied by the PET tax credit allowed to such member. 344, amending Conn. Gen. Stat. The bill makes significant changes to how corporations and pass-through entities are taxed. Transportation network company fee. The sales tax expansion will generate an additional $11.8 million in the first year and $24.4 million in the second year. View the list of archived Multistate Tax alerts. Certified service providers: The bill directs the DRS Commissioner to consult with the Streamlined Sales Tax Governing Board to develop a list of certified service providers to facilitate Connecticut sales tax collection and remittance and develop a plan to implement the use of such certified service providers. Short-term rental operators are not liable for collecting room occupancy tax to the extent that the short-term rental facilitator collected the tax due. 19 H.B. 347, amending Conn. Gen. Stat. Under this rule it normally does not matter where the work is actually performed, the important item is where the benefit of the Call 911 in the case of a crisis or 211 for a referral for human services. 28 H.B. Connecticut first adopted a general state sales tax in 1947, and since that time, the rate has risen to 6.35 percent. 8 H.B. WARNING This is not the Taxpayer Service Center. How 2020 Sales taxes are calculated in Connecticut. The scenario in Table 5 applies the 6.35% rate to all of the categories of sales listed in the baseline table but excludes the room occupancy (hotels, lodging houses, and bed and breakfasts) and rental car taxes. For tax years beginning on or after January 1, 2021, taxpayers who paid conveyance tax at the new 2.25% rate may calculate their property tax credit against the income tax based on the amount paid in conveyance tax over a 3-year period, beginning in the third year after the conveyance tax was paid. Act No. Sess. The current personal income tax rates are assumed to continue to apply to non-wage income. Effective for tax years beginning on or after January 1, 2019, the bill reduces the pass-through entity tax credit for a member's share of the tax to 87.5% (currently 93.01%). 7424, Sec. The capital base tax rate is 0.31 percent for income years commencing prior to January 1, 2021. The venues subject to reduced rates are: the XL Center in Hartford; Dillon Stadium in Hartford; athletic events presented by a member team of the Atlantic League of Professional Baseball at the New Britain Stadium; Webster Bank Arena in Bridgeport; Harbor Yard Amphitheater in Bridgeport; Dodd Stadium in Norwich; Oakdale Theatre in Wallingford; and events, other than already exempt interscholastic athletic events, at Rentschler Field in East Hartford. State tax legislative, judicial, and administrative developments. Municipal governments in Connecticut are also allowed to collect a local-option sales tax that ranges from 0% to 0% across the state, with an average local tax of N/A (for a total of 6.35% … Dan is a senior tax consultant working in the Hartford, Connecticut, Multistate Tax practice of Deloitte Tax LLP. Connecticut cities and/or municipalities don't have a city sales tax. Effective July 1, 2020, a new marginal real estate conveyance tax rate of 2.25% is placed on the portion of the sales price of a residential property that exceeds $2.5 million. Chapter 201 Secs. Sep 25, 2019 at 6:00 AM . Remote Sales Tax Collection , “Implications of the Supreme Court’s Historic Decision in Wayfair.” July 9, 2018 “Streamlined Sales and Use Tax Agreement,” OLR Report 2018-R-0182 “Legislative Changes Affecting Motor Vehicle Fuels Tax, Sales and Use Taxes, and Rental Surcharge,” Department of Revenue Services SN 2018 (5.1) 16 H.B. Assemb., Reg. There is no applicable county tax, city tax or special tax. Effective August 1, 2019, to June 30, 2021, single-use plastic bags are subject to a 10¢ fee. Every 2020 combined rates mentioned above are the results of Connecticut state rate (6.35%). Act No. 337, adding Conn. Gen. Stat. Connecticut considers vendors who make more than $100,000 in gross receipts during the 12-month period in gross revenue AND 200 or more separate transactions on the previous calendar year’s sales to have economic nexus. 7424, Sec. For sales occurring on or after July 1, 2019, but prior to July 1, 2020, for any event at the Dunkin' Donuts Park in Hartford, the tax is 5% of the admission charge. 15 H.B. You need your Connecticut Tax Registration Number, legal business name (for sole proprietors: your last name), and TSC PIN number. Effective July 1, 2019, deeds that transfer the transferor's principal residence, which has a concrete foundation that has deteriorated due to the presence of pyrrhotite are exempt from real estate conveyance tax, provided the transferor obtains a written evaluation from a professional engineer indicating that the foundation of the residence was made with defective concrete. Pass-through entity tax credit reduced: The bill effectively increases income tax on the owners of pass-through entities. § 12-219(b)(8)(A). 7373 provide certain changes to the pass-through entity tax (PET), which are generally applicable for tax years beginning on or after January 1, 2019, unless otherwise noted: For tax years commencing on or after January 1, 2019, H.B. As of October 1, 2019, the full Connecticut state sales tax rate of 6.35 percent will apply. Assemb., Reg. 333, amending Conn. Gen. Stat. § 12-704d(b). Elimination of exemptions: Effective January 1, 2020, the bill eliminates the sales and use tax exemptions for safety apparel; specified parking services; dry cleaning services; laundry services and interior design services unless purchased by a business for use by such business. The previous statutory language exempted such members from filing provided the pass-through entity filed and paid the PET. § 12-410(5)(C), (D), (E). processing services. 19-86; S.B. Digital goods and software: Effective October 1, 2019, the sales and use tax rate on digital goods and canned or prewritten software that is electronically accessed or transferred, other than when purchased by a business for use by such business, will be subject to the full 6.35% sales tax rate and will no longer be considered computer and data processing services, which are subject to a reduced rate of 1%. The nominal corporation business tax rate is 7.5 percent, resulting in an effective tax rate of 8.25 percent. Available incentives included corporation business and personal income tax credits and deductions, sales and use tax exemptions, and a property tax assessment freeze. Sess. 4 H.B. For tax years commencing on or after January 1, 2020, H.B. See also H.B. (Conn., June 28, 2019). While Connecticut's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. § 12-699a(b)(1). Teacher pension exemption: The bill delays an increase in the teacher pension exemption to 50% until January 1, 2021, and maintains the current 25% exemption for 2019 and 2020. Coin operated laundry services remain exempt. 7424, Sec. Sess. Eliminates the condition that out-of-state retailers be “regularly or systematically” soliciting sales. The statewide rate of 6.35% applies to the retail sale, lease, or rental of most goods and taxable services. § 12-407(a)(13). Visit our Electronic Filing Page to file Business or Individual returns.. Log in (or Register for the first time) below to subscribe to e-alerts or to update your subscription profile. 7424 or other Connecticut tax matters, please contact any of the following Deloitte Tax professionals: Jack Lutz, managing director—Deloitte Tax LLP, Hartford, +1 860 725 3150, R. Craig Aronson, managing director—Deloitte Tax LLP, Hartford, +1 860 725 3127, Kimberly Sweeney, managing director—Deloitte Tax LLP, Stamford, +1 203 708 4476, Nicholas Rochedieu, senior manager—Deloitte Tax LLP, Hartford, +1 860 725 3101, Dareck Stringfield, senior manager—Deloitte Tax LLP, Hartford, +1 203 708 4236, Maura Bakoulis (Zaneski), manager—Deloitte Tax LLP, Hartford, +1 860 725 3348. However, as of June 2019, there are no local sales taxes in Connecticut. 7424 increases the maximum total tax credit allowed to any angel investor in a single year from $250,000 to $500,000.17 The bill also extends the credit program to July 1, 2024.18. 1, amending Conn. Gen. Stat. 21 H.B. 72 authorizes a 50 percent tax credit for payments made by businesses for student loans issued to certain employees of their business.29 The credit can be used to offset taxes on corporate income, insurance premiums, and hospitals. Economic and click-through nexus: Effective July 1, 2019, every person making retail sales of tangible personal property and services from outside Connecticut to a destination in the state is liable for sales tax if they make 200 transactions and have gross receipts of $100,000 (currently $250,000) during a 12-month period. 6 H.B. The sales threshold for click-through nexus is also lowered to sales of $100,000 (previously $250,000) made through referral agreements. 7424, Sec. 23 H.B. FUN FACTS. § 12-284b(b). I would like to welcome you to the Connecticut Department of Revenue Services (DRS) website. Categorized as computer and data processing services, digital goods and services are currently subject to a 1 percent sales and use tax rate. 7424, 2019 Gen. This page describes the taxability of services in Connecticut, including janitorial services and transportation services. 19-186; H.B. This tax alert provides a high-level summary of these bills. 26 H.B. Updated December 2020; originally published February 2019. Employers must return it by October 1, 2019. 72), which include: H.B. 19-186; H.B. The full impact to the state is estimated to be $271.6 million in FY 20. Connecticut, this is a Connecticut sale subject to Connecticut sales tax. § 12- 407(a)(15)(A)(v), (x). © 2021. Brownfield revitalization 7/7 program repealed: Applicable to tax years beginning on or after January 1, 2019, the legislation repeals the 7/7 Brownfield Revitalization program, which was established to provide state and local tax incentives to eligible owners for up to 14 years after remediating, redeveloping, and using formerly contaminated, abandoned, or underutilized property. § 12-704d(e)(1). The budget bill phases out the capital base component of the tax over a 4-year period. A handful of items and services will be subjected to the state’s 6.35 percent sales tax as of Jan. 1. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. 7424, Sec. 7373, Sec. 12-35 to 12-39dd: Collection of State Taxes: Chapter 203 Secs. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. Hospital provider tax. DTTL (also referred to as "Deloitte Global") does not provide services to clients. The sales tax jurisdiction name is Connecticut, which may refer to a local government division. Read here for more about Amazon FBA and sales tax nexus.Here’s a list of all Amazon Fulfillment Centers in the United States.. Do you have economic nexus in Connecticut? software to a business for use by the business, which will. It may take 24-48 hours to receive a response to the inquiries submitted through the CCFSA website. Expands the PET base to include guaranteed payments. (Conn., June 28, 2019). 319, amending Conn. Gen. Stat. 22 H.B. transferred canned or prewritten software will also be. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. 7424, Sec. 19-117; H.B. § 12-407(a)(37)(A), excluding “digital goods” from computer and data processing services. Note: Taxpayers are not subject to estimated tax payment requirements and interest on underpayments for the 2019 tax year for any additional tax due as a result of the credit reduction prior to it taking effect. Act No. Changes to Connecticut sales and use tax. Applies to both the standard and alternative base methods. Connecticut imposes a 6.35% sales and use tax, with certain exceptions, on a wide range of services. 19-86; S.B. 12-40 to 12-121z: Property Tax Assessment 72, 2019 Gen. Act No. Contractor services. 7424, Sec. Agencies Regs. 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