Businesses that sell in Connecticut need a Sales and Use Tax Permit from the Connecticut Department of Revenue Services. You apply online through myconneCT, pay a $100 nonrefundable fee, and can print a temporary permit right away. Remote sellers have to register once they have $100,000 in gross receipts and 200 retail sales into Connecticut in the 12 months ending Sept. 30.
You need a Connecticut Sales and Use Tax Permit if you sell, rent, or lease goods, sell a taxable service, or run a hotel or bed and breakfast in Connecticut.
The Department of Revenue Services (DRS) requires a permit before you make any sales, regardless of your sales volume.
Building contractors and subcontractors need one before providing any services, even nontaxable ones. Manufacturers and wholesalers need one too.
Connecticut taxes computer and data processing services, so sellers of SaaS in Connecticut also need a permit.
If you have no physical presence in Connecticut, you have to register and get a permit once you meet the Connecticut economic nexus threshold. You meet the threshold if, in the 12 months ending Sept. 30, you make both 200 or more retail sales into Connecticut and at least $100,000 in gross receipts from those sales.
Both tests must be met. A seller with $500,000 in Connecticut sales spread over 150 orders doesn't meet the threshold.
Under Conn. Gen. Stat. § 12-407, Connecticut counts:
Connecticut checks your sales once a year, not on a rolling basis. The cutoff is Sept. 30. If your sales for the 12 months ending Sept. 30 meet both thresholds, you must collect Connecticut tax starting Oct. 1 for the next 12 months.
For example, if you pass both thresholds in May, you don’t have to start collecting right away. Your sales for the 12 months ending Sept. 30 will meet the test, so register and start collecting by Oct. 1.
If you crossed the threshold in the past and never registered, a voluntary disclosure agreement may help.
Any physical nexus in Connecticut means you need a permit, regardless of sales volume. Get it before your first sale. Under Conn. Gen. Stat. § 12-407, physical nexus includes:
Paying a Connecticut-based person a commission to refer customers can also create nexus. Under the same law, that applies once referred sales top $100,000 over the previous four quarters.
Connecticut's marketplace facilitator law makes Amazon, Etsy, and other qualifying marketplaces collect tax on the sales they facilitate. Whether you still need your own permit depends on where you're based and how much you sell:
Registered marketplace sellers still report their marketplace sales on the return, then deduct the sales for which a marketplace collected tax. The application asks whether all your sales go through a marketplace facilitator.
If you're an out-of-state seller with inventory stored at a marketplace facilitator's Connecticut facility, as many Amazon FBA sellers are, you have to register even if you're under the threshold.
Connecticut's exception for inventory at an unaffiliated fulfillment provider only covers orders shipped outside Connecticut, and it doesn't apply to marketplace facilitators.
Connecticut's sales tax nexus rules carve out a few other activities, such as using a Connecticut commercial printer.
Connecticut only takes new registrations online. All new businesses must complete Form REG-1 electronically in myconneCT and pay the $100 fee electronically at the end.
The REG-1 application asks for:
For each owner or officer, the application asks for:
The same application registers you for other Connecticut taxes, so it also asks:
These steps follow the DRS tutorial Registering a New Business, which shows each application screen.
Go to the myconneCT home page. You don't need to log in. Under Businesses, select New Business/Need a CT Registration Number?
Read the Register a Business overview, which lists the account types you can register for, with fees for some, and what you need to register. Then select Next.
Tip: Select Save Draft to finish later. You'll get a confirmation code, and you can reopen the draft with that code and your email address under Find a Submission. DRS keeps a saved draft for 30 business days.
Under Reason for registration, select Requesting a Connecticut Registration number/Opening a new business. If you're buying an existing business, select Purchasing an ongoing business instead.
Warning: If you buy a business, you may be held personally liable for the seller's unpaid Connecticut sales and use taxes. Notify DRS by letter at least 90 days before closing and request a Tax Clearance Certificate.
On Enter customer information, select your customer type and ID type, then enter your FEIN or Social Security number and the other details the screen asks for.
Next, enter your legal name, business name, and business address, and select Verify Address. Then say whether your mailing address is the same.
On Enter business information, fill in your state and date of incorporation or organization, if applicable, bank name, nature of business activity, and a description of what you do.
To add your NAICS code, select Search. Enter a keyword or 2 to 6 digits of the code, pick the best match, and confirm it.
On Add owners/officers, select Add a Record and enter each owner's or officer's contact, name, and address details. You must enter at least one.
Answer the Withholding Tax Registration questions, then the Sales & Use Tax Registration questions. When you register for sales and use tax, the application assesses the $100 registration fee.
Next come the Corporation Business Tax Registration questions and a list of other account types you can add. Check the Fee summary before moving on.
Under Create a myconneCT logon, enter a username, email address, and contact name, then a phone number. Under Security, set a password of at least 8 characters with letters, numbers, and special characters, and choose a secret question.
Under Payment Options, choose Bank Account or Credit Card. DRS recommends paying by bank account because credit card payments carry a convenience fee.
On Confirm Submission, type your name as your electronic signature and select Submit. The fee isn't refundable once you submit.
On the confirmation page, select Printable View and print your temporary permit. You can start using it immediately. Don't mail the confirmation page to DRS, since that can delay your registration.
The temporary permit has its own expiration date. DRS mails your official Sales and Use Tax Permit. Log in to myconneCT with your new login to see your Connecticut Tax Registration Number.
Once DRS processes your application and payment, you can also print a copy of the permit from More… > View Letters.
A Connecticut Sales and Use Tax Permit costs $100 per permit, and you need a separate permit for each place of business. You pay electronically when you submit the application, and the fee isn't refundable.
Renewal is free, and so is a replacement for a lost permit. If you also register for room occupancy tax, there's no second fee.
You do pay the fee again if you closed your account or filed a final return and later need a new permit.
You can print a temporary permit as soon as you submit the online application and use it right away. DRS mails the official permit afterward.
Your permit expires every two years. DRS renews it automatically and mails the new one at no cost, as long as your account is active and in good standing.
Keep your mailing and location addresses current in myconneCT, since DRS mails the renewed permit. Daily penalties for selling without a permit apply if you fail to renew it.
If your new permit hasn't arrived by the expiration date and you never closed the account, contact DRS for a copy.
Charge Connecticut sales tax from the date you start selling. The general rate is 6.35%, and Connecticut has no local sales taxes, so you don't need to track city or county rates.
Display your permit where customers can see it. If you have more than one location, you need a permit for each one.
DRS tells you at registration whether you file monthly, quarterly, or annually. If you expect to owe $1,000 or less a year, you can ask to file annually.
Sellers that make all their sales through marketplace facilitators that collect the tax are set up as annual filers.
You file Connecticut sales tax returns on Form OS-114 through myconneCT. Each return is due by the last day of the month after the period ends.
You must file every period, even if you made no sales and owe no tax. Report taxable and nontaxable sales alike.
Returns and payments must be electronic unless DRS grants you a waiver through Form DRS-EWVR.
Your permit renews every two years at no cost while your account is in good standing, as covered above. Registration rules in other states differ, and some permits never expire.
No. An EIN is a federal tax ID from the IRS. The Sales and Use Tax Permit authorizes you to collect Connecticut sales tax and includes a Connecticut Tax Registration Number.
If you’re a sole proprietor, you can apply with your Social Security number instead of an EIN. Other businesses need an EIN to apply.
Yes. You need a permit for each location, and you must display it there. Each permit costs $100.
Yes. You need a permit to sell at a flea market, craft show, trade show, antique show, or fair in Connecticut, even for a single day. Display it at your booth or table.
It depends. Out-of-state sellers under the $100,000 and 200-sale threshold don't need one if all their Connecticut sales go through Amazon or another marketplace.
You do need a permit if you're based in Connecticut, if you meet the threshold, or if Amazon stores your inventory in Connecticut.
Yes. You can't use the previous owner's permit, so you must register and pay the $100 fee yourself.
Be aware that unless you get a Tax Clearance Certificate (Form AU-712), you're liable for the seller's unpaid sales and use taxes up to the purchase price.
Register now. DRS charges a $250 penalty for the first day you do business without a permit and $100 for each day after that. It may waive the penalty if you show reasonable cause.
Knowingly doing business without a permit is also a criminal offense, with a fine of up to $500, up to three months in prison, or both for each offense.
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