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Connecticut Governor Dannel Malloy signed the budget bill for the 2012/2013 biennum which includes a provision enacting click-through-nexus. The provision, effective as of May 4, 2011, amends the definition of “retailer” and “engaged in business” to include anyone making sales of taxable items or services through an independent contractor or representative who is located in Connecticut. Nexus would be imposed on a retailer who enters into an agreement with anyone who directly or indirectly refers potential customers to the retailer for a commission or other consideration, whether by a website link or otherwise. The retailer’s cumulative gross receipts from sales to Connecticut residents who are referred to the retailer by anyone located in Connecticut with this type of agreement must exceed $2,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December. The provision presumes that such retailers are soliciting business through independent contractors or other representatives who are located in Connecticut. The proposed bill included a rebuttable presumption. However, the enacted bill eliminated this provision. (S.B. 1239, Laws 2011; Act 61 (H.B. 6652), Laws 2011)


Effective July 1, 2011, a number of sales and use tax changes take place in Connecticut. The general sales and use tax rate – previously 6% - increases to 6.35%. The room occupancy tax rate increases from 12% to 15%. The tax on rental or lease of a motor vehicle for 30 days or less increases from 6% to 9.35%.

A higher tax rate of 7% applies to the sale of most motor vehicles for more than $50,000, the sale of a vessel for more than $100,000, the sale of jewelry for more than $5,000, and the sale for more than $1,000 of clothing or footwear, handbags, luggage, umbrellas, wallets, or watches.

Effective July 1, 2011, sales of the following services are taxable: services rendered in the voluntary evaluation, prevention, treatment, containment or removal of hazardous waste or other contaminants of air water or soil; airport valet parking; yoga instruction; motor vehicle storage services; packing and crating services; motor vehicle towing and road services; intrastate transportation services with certain exceptions; pet grooming, boarding and obedience services; services connected to a cosmetic medical procedure; manicure, pedicure and nail services; and spa services.

Effective July 1, 2011, exemptions on the following are repealed: clothing and footwear under $50; nonprescription drugs and medicines; smoking cessation products; cloth or fabric for noncommercial sewing; and yarn for noncommercial use.

In addition, the exemption for equipment installed in motor vehicles for persons with physical disabilities is expanded to apply to the portion of the sales price attributable to the equipment when a motor vehicle is resold. (Special Notice 2011(6), Connecticut Department of Revenue Services, June 10, 2011)


The Connecticut Department of Revenue has issued a new informational publication that answers commonly asked questions about Connecticut use tax. This publication modifies and supersedes Informational Publication 2007(27), Q & A on the Connecticut Individual Use Tax. The new publication discusses various topics including: who must pay use tax, what kinds of goods or services are subject to use tax, exemptions available, how to report use tax liabilities, purchases made for use in the trade or business, purchases made from an out-of-state mail-order company, television shopping channel, or over the Internet, use tax filing requirements for motor vehicles, snowmobiles, vessels, and aircraft, and the penalties and interest for not paying the use tax. (Informational Publication 2009(33), Connecticut Department of Revenue Services, December 29, 2009)


In a press release, the Connecticut Department of Revenue Services reminds taxpayers that the sales and use tax rate will not decrease and will remain at 6%. Previously in September 2009, a law was passed to decrease the sales and use tax rate from 6% to 5.5%, beginning January 1, 2010. This rate decrease was contingent on the general fund's gross tax revenue not falling below 1% of the initial budget estimates. Consequently, the rate decrease has been cancelled because the tax revenue projections developed by the Office of Policy and Management, the Office of Fiscal Analysis, and the Office of the State Comptroller all show tax revenues falling below 1% of the initial estimates. (Press Release, Connecticut Department of Revenue Services, December 21, 2009)


The Connecticut Department of Revenue Services issued a special notice discussing sales and use tax changes resulting from the 2009 regular and June special sessions. Effective January 1, 2010, there will be a decrease in the sales and use tax rate to 5.5% contingent on the cumulative monthly financial statements. There will also be an increase in the new seller's permit from $50 to $100 beginning October 1, 2009. If a seller's permit is suspended or revoked, the fee for a reissued seller's permit is also increased from $50 to $100. Effective July 8, 2009, exemptions for gas, electricity, machinery, materials, tools, and fuel are amended to make persons that make finished products (for example asphalt) used to fulfill a paving contract eligible for them when they are purchased to make the product. (Special Notice 2009(6), Connecticut Department of Revenue Services, October 19, 2009)



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