Connecticut Sales and Use Tax Rate Changes Take Effect

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Effective July 1, 2011, exemptions on the following are repealed: clothing and footwear under $50; nonprescription drugs and medicines; smoking cessation products; cloth or fabric for noncommercial sewing; and yarn for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

Posted on June 30, 2011