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Connecticut is offering a sales and use tax exemption for energy-efficient, weatherization products, effective June 1, 2006 though June 30, 2007. The exemption is applicable for various sales and purchases including: 1) sales made by Connecticut retailers, 2) sales made by out-of-state retailers required to collect Connecticut use tax on sales to retailers, and 3) purchases by Connecticut customers on which they would otherwise be required to self-assess use tax. Additional exclusions and regulations apply. (Special Notice 2006(1), Connecticut Department of Revenue Services)


Effective July 13, 2005, a retailer, if not otherwise engaged in business in the state of Connecticut, which participates in trade shows at the Connecticut Convention Center does not create sales tax nexus. Such retailers, therefore, are not subject to Connecticut sales and use tax even if they have employees or other staff present at trade shows, provided that no sales are made. The retailers’ activities must be limited to displaying goods or promoting services and any orders received must be sent outside the state for acceptance and fulfillment. In addition, the retailer’s participation in the trade shows cannot exceed 14 days during the retailer’s income year for federal income tax purposes. Further regulations and rules do apply. (Revision of 1958, Title 12 Taxation, Chapter 219 Sales and Use Taxes)


In recently enacted legislation, a 1.5% surcharge has been imposed on machinery rented in the state for any period less than 31 days. This surcharge will be collected by the lessor. The lessor then must file an annual report by February 15th of each year detailing the amount collected from this surcharge. If the amount received is less than the amount the lessor paid in property taxes or vehicle registration and titling fees, no further action is required. If the amount of surcharge collected is greater than these taxes, the excess amount must be remitted to the state. The surcharge is in addition to any tax otherwise applicable to such a transaction. A piece of machinery is defined as being “heavy equipment without an operator that may be used for construction, mining or forestry.” This includes bulldozers, cranes and other such equipment. (Connecticut Senate Bill 1230, Effective July 1, 2005)


A financial services company appealed a prior decision that stated they could not claim a refund of Connecticut sales and use tax remitted to the state on behalf of customers that eventually defaulted on automobile loans that the taxes were collected on. The financial service company purchased the loans from the automobile dealers. However, under the language of Connecticut law, the auto dealers were considered to be the proper sellers of the vehicles that were sold and remitted the taxes to the state. The Supreme Court found on appeal that the dealer statute was not applicable to the financial services company. For this reason, the transaction fell outside the guidelines set in the statute for the exemption. (DaimlerChrysler Services North America, LLC v. Commissioner of Revenue Services, Connecticut Supreme Court, June 28, 2005)


Clothing or footwear less than $300. Does not include protective, athletic gear or accessories. See Details



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