Effective Date: December 1, 2018
Threshold: $250,000 and 200 transactions through July 1, 2019; $100,000 and 200 transactions applicable to sales on or after July 1, 2019
Measurement Date: Previous or current calendar year
Includable Transactions: Gross sales
When You Need to Register Once You Exceed the Threshold: Next transaction (state doesn’t specify)
Connecticut has enacted legislation containing economic, marketplace and notice and reporting requirement provisions, effective December 1, 2018. Per the legislation out-of-state sellers are considered a retailer for Connecticut sales and use tax purposes provided that the seller has gross receipts of at least $250,000 and made 200 or more retail sales in Connecticut during the 12-month period ending on September 30 immediately preceding the monthly or quarterly period with respect to which such person’s liability for tax under this chapter is determined.
Additionally, marketplace facilitators are considered retailers for Connecticut sales and use tax purposes. “Marketplace facilitator” means any person who:
A marketplace facilitator will be considered the retailer of each sale it facilitates on its forum for a marketplace seller and will be required to collect and remit tax on the sales. For a taxable sale occurring on or after December 1, 2018, but on or before December 31, 2019, if a marketplace facilitator incurs liability for failure to collect the tax due on a taxable sale, the commissioner will limit the facilitator’s liability if the facilitator can show to the satisfaction of the Commissioner of Revenue Services that:
The legislation also enacts notice and reporting requirements for referrers. “Referrer” means any person who:
Referrers are required to:
Additionally, the legislation raises the threshold for Connecticut’s previously enacted click-through nexus legislation from $2,000 in gross receipts to $250,000. (S.B. 417, effective December 1, 2018)
UPDATE: Following the South Dakota v. Wayfair decision, Connecticut released a notice stating that definitions of “retailer” and “engaged in business in the state” have been clarified to include the Internet as a means by which retailers are considered to be soliciting sales in
Connecticut. The legislation changes the nexus standard, and remote retailers must collect and remit sales tax if (1) Their Connecticut sales exceed a threshold of 200 transactions during the preceding twelve month period (previously, the threshold was 100 sales); and (2) Their gross receipts are $250,000 or more during that twelve-month period. The legislation is still effective December 1, 2018.
UPDATE: The Connecticut Department of Revenue Services released a helpful publication regarding the responsibilities of marketplace facilitators and marketplace sellers. As of December 1, 2018, marketplace facilitators are required to collect and remit sales tax on behalf of their marketplace sellers. Read the Department’s publication for answers to common questions on registration responsibilities, reporting, and more.
UPDATE: Effective July 1, 2019 and applicable to sales on or after July 1, 2019, Connecticut has enacted legislation that lowers the state’s economic threshold to $100,000 in gross receipts (previously $250,000) and 200 transactions. Additionally, the legislation expands the economic nexus provision to also apply to sales of services (previously only tangible personal property). The legislation also eliminates the condition that such retailers must engage in regular or systematic solicitation of sales in Connecticut. The legislation also reduces the threshold for Connecticut’s click-through nexus provision. (Act 117 (H.B. 7424), Laws 2019)