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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)


On August 31, 2009, Governor Jodi Rell announced that she would allow the budget bill to become law without her signature with the exception of certain line-item vetoes. The bill is scheduled to become law on September 8, 2009. Among the passed items in the bill was a decrease in the sales and use tax rate. The rate will be decreased from 6% to 5.5%, effective January 1, 2010. This rate decrease is contingent upon meeting certain revenue projections. In addition, the fee for a seller’s permit will increase from $50 to $100 beginning October 1, 2009. Another item passed in the bill was a provision to establish a tax settlement initiative program. The bill requires the Department of Revenue to conduct this amnesty program during the period of October 1, 2009 and December 31, 2009, inclusive. The program will allow eligible taxpayers to pay any outstanding taxes from prior periods in exchange for a waiver of all civil penalties and fifty percent of the interest due. (H.B. 6802, passed by the Connecticut General Assembly on August 31, 2009)


Senate Bill 806, which would have required every person making sales of tangible personal property or services through an independent contractor or other representative in Connecticut through an agreement under which the resident, for a consideration, directly or indirectly refers potential customers via a link on an Internet web site or otherwise died in committee. (S.B. 806 died in the committee on Revenue, Finance, and Bonding on June 2, 2009)


The Superior Court of Connecticut has overturned the Commissioner of Revenue Services’ decision that school teachers who distribute catalogs and books to students and take student orders are “representatives” who participate in an in-state “sales force” to sell, deliver, and take orders to generate revenue on behalf of an out-of-state company that sells books exclusively to schools. Although the teachers fulfill a crucial administrative role for the bookseller, this function does not elevate the teachers to the level of a “sales force” because the decision to participate in the bookseller’s program remains with the teacher, the teachers may act as customers and purchase books for their own use, and the bonus points given to the teachers as their only form of compensation are for classroom use only and stay with the classroom, not the teacher. Since it is determined that the teachers are not representatives of the bookseller, their administrative activities do not establish nexus for the bookseller.

(Scholastic Book Clubs, Inc. v. Commissioner of Revenue Services, Connecticut Superior Court, Nos. CV07 4013027 S and CV 07 4013028 S, April 9, 2009)



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