Connecticut has revised a special notice pertaining to amendments made in the 2011 session of the state general assembly affecting the requirement for nonresident contractors to provide bonds for sales and use tax and withholding tax purposes. The 2011 legislation created two classes of nonresident contractors – verified and unverified. A nonresident prime or general contractor can gain verified status and eliminate the requirement to file a surety bond with the Connecticut Department of Revenue Services (DRS). A nonresident subcontractor who gains verified status eliminates the requirement for the prime or general contractor to hold back a portion of the amount owed to the subcontractor under the contract. Under the amended law, a single surety bond for 5% of the entire project price is required to be filed with the DRS by an unverified prime or general contractor when the contract price for the entire project is $250,000 or more. A prime or general contractor must hold back 5% of the amount due to an unverified subcontractor until the subcontractor obtains and furnishes Form AU-968, Certificate of Compliance, from the DRS. Prior law required compliance with one of three options to secure payment of Connecticut taxes for contracts with a nonresident prime or general contractor and with a nonresident subcontractor. This is replaced by the procedures described above. The notice also includes guidance on how to remit amounts held back from an unverified subcontractor by a prime or general contractor to the DRS. (Special Notice 2012(2), Connecticut Department of Revenue Services, March 22, 2012)