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Effective October 1, 2017, any Connecticut sales tax permit issued after October 1, 2017 will expire 2 years from the date that the permit was issued, unless the permit is renewed. Previously, Connecticut sales tax permits expired every 5 years. (Ch. 36 (H.B. 7109), Laws 2017)

(01/02/2018)

Enacted legislation specifies the methods for weekly sales tax remittance in Connecticut, effective January 1, 2018. The Commissioner of the Connecticut Department of Revenue Services is authorized to require any taxpayer who is delinquent to remit sales tax on a weekly basis. The enacted legislation requires such taxpayers to remit the tax through a service provider certified by the Streamlined Sales Tax Governing Board unless they elect to establish a separate account with a financial institution and deposit into that account the taxes collected or received within two business days of that collection or receipt. If this option is selected, the taxpayer may select a bank, Connecticut credit union, federal credit union, an out-of-state bank with a Connecticut branch, or an out-of-state credit union that maintains an office in Connecticut.  



If a taxpayer withdraws funds from that account for any purpose other than to remit tax due, the person will be guilty of larceny and each unauthorized withdrawal will constitute a separate offense. A taxpayer’s choice for weekly remittance is irrevocable and remains in effect until the commissioner notifies the taxpayer that they are no longer required to weekly remit the tax. The commissioner is prohibited from waiving any penalties imposed on taxpayers who must remit sales tax on a weekly basis. Taxpayers that are obligated to file monthly or quarterly returns, including taxpayers who must remit sales taxes on a weekly basis, are required to file returns electronically and make each weekly remittance via electronic funds transfer (EFT). (Ch. 36 (H.B. 7109), Laws 2017)

(11/28/2017)

Connecticut has enacted legislation authorizing the Connecticut Department of Revenue Services to implement a “fresh start” tax amnesty program effective October 31, 2017 through November 30, 2018. The program allows for the waiver of most penalties as well as 50% of the interest related to a failure to pay any amount due to the commissioner by the date prescribed for payment. A fresh start agreement for a qualified taxpayer that has failed to file a tax return(s) may also provide for a limited look-back period.

A “qualified taxpayer” is a taxpayer that:

 

  • Failed to file a tax return, or failed to report the full amount of tax properly due on a previously filed tax return, that was due on or before December 31, 2016;
  • voluntarily comes forward prior to receiving a billing notice or a notice from the Department of Revenue Services that an audit is being conducted in relation to the tax type and taxable period or periods for which the taxpayer is seeking a fresh start agreement;
  • is not a party to a closing agreement with the Commissioner of Revenue Services in relation to the tax type and taxable period or periods for which the taxpayer is seeking a fresh start agreement;
  • has not made an offer of compromise that has been accepted by the commissioner in relation to the tax type and taxable period or periods for which the taxpayer is seeking a fresh start agreement;
  • has not protested a determination of an audit for the tax type and taxable period or periods for which the taxpayer is seeking a fresh start agreement;
  • is not a party to litigation against the commissioner in relation to the tax type and taxable period or periods for which the taxpayer is seeking a fresh start agreement; and
  • applies for a fresh start agreement in the form and manner prescribed by the commissioner.

 

Qualified taxpayers who participate in the amnesty program must:

 

  • Voluntarily and fully disclose on the application all material facts pertinent to the tax liability;
  • file any tax returns or documents that may be required by the commissioner;
  • pay in full the tax and interest as set forth in the fresh start agreement;
  • agree to timely file any required tax returns and pay any associated tax obligations to the state for a period of three years after the date the fresh start agreement is signed by the parties to such agreement; and
  • waive, for the taxable period or periods for which the commissioner has agreed to waive penalties and interest, all administrative and judicial rights of appeal that have not run or expired.

 

The waiver of penalties and interest will not apply if the commissioner finds that any of the following circumstances exist:

 

  • The taxpayer misrepresented any material fact in applying for or entering into the fresh start agreement;
  • the taxpayer fails to provide any information required for any taxable period covered by the fresh start agreement on or before the due date prescribed under the terms of the fresh start agreement;
  • the taxpayer fails to pay any tax, penalty or interest due in the time, form or manner prescribed under the terms of the fresh start agreement;
  • the tax reported by the taxpayer for any taxable period covered by the fresh start agreement, including any amount shown on an amended tax return, understates by ten per cent or more the tax due and the taxpayer cannot demonstrate to the satisfaction of the commissioner that a good faith effort was made to accurately compute the tax; or
  • the qualified taxpayer fails to timely file any required tax returns or pay any associated tax obligations to the state, during the three-year period after the date the fresh start agreement was signed by the parties to such agreement.

 

No payment made by a taxpayer for a taxable period covered by a fresh start agreement shall be refunded or credited to a taxable period other than the taxable period for which such payment was made. (S.B. 1502, Laws 2017)

(11/20/2017)

The Multistate Tax Commission (MTC) has announced a sales/use tax and income/franchise tax amnesty program for online sellers that will run from August 17 to November 1, 2017 (previously October 17, 2017). Qualified online sellers with potential tax liability may be able to use the MTC's voluntary disclosure agreement (VDA) to negotiate a settlement during the amnesty period if they meet certain eligibility requirements. Taxpayers that have not been contacted by any of the states participating in the amnesty program will be able to apply to start remitting sales tax on future sales without penalty or liability for unpaid, prior accumulated sales tax in the participating states. 25 MTC member states have agreed to participate in the amnesty program. The participating states include: 

 

  • Alabama
  • Arkansas
  • Colorado (sales/use tax only)
  • Connecticut
  • District of Columbia (may not waive all prior periods)
  • Florida
  • Idaho
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Massachusetts (special provisions apply)
  • Minnesota (special provisions apply)
  • Missouri
  • Nebraska (may not waive all prior periods)
  • New Jersey
  • North Carolina
  • Oklahoma
  • Rhode Island
  • South Dakota
  • Tennessee
  • Texas 
  • Utah
  • Vermont
  • Wisconsin (will require payment of back tax and interest for a lookback period commencing January 1, 2015 for sales/use tax, and including the prior tax years of 2015 and 2016 for income/franchise tax)

 

Some of the additional states may require a limited look-back period for prior tax liabilities. Sellers who wish to participate in the program will need to file the voluntary disclosure program paperwork during the program dates. The MTC will route the paperwork for each participating state for which the seller is seeking amnesty protection. For more details visit the MTC website.

 

UPDATE: The Multistate Tax Commission's online seller amnesty program is now over. If you didn't take advantage of this program but realize you need to evaluate your activities, you can contact us here.

(11/07/2017)

Effective October 1, 2017, any Connecticut sales tax permit issued on or after October 1, 2017 will expire two years from the anniversary date of when the permit was issued, unless the permit is renewed. Previously, Connecticut sales tax permits would expire after five years. (Ch. 36 (H.B. 7109), Laws 2017

(07/26/2017)

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