DRS: Managing Sales Tax

 
Managing Sales Tax Information

 
 

  1. Filing Due Dates
  2. Sales Tax Forms & Publications
  3. List of Taxable Services
  4. Renewing your Sales and Use Tax Permit
  5. Closing a Business

How to File Sales and Use Tax
  1. On-Line using TSC
  2. Over the telephone using our Business Telefile System
  3. By mail using the paper return

Filing Due Dates

In general, when you register, you may be set up to file sales tax returns on the quarterly basis.  Remember: even if you did not make any sales for the period or if all your sales were exempt from sales tax, you must file the return.  

NOTE:  You must file a timely return even if you do not receive one in the mail.  If your copy does not arrive, call the DRS so that we may check to see if the correct mailing information is on file.  This does not apply to Mandatory Electronic filers since paper returns are not mailed to this group.

For quarterly filers, the reporting periods and due dates of the return are:

Reporting Periods

Due Dates

January 1 - March 31
April 30
April 1 - June 30 
July 31
July 1 - September 30 
October 31
October 1 - December 31
January 31
 

If your sales tax liability is less than $1,000 for the prior 12-month period, beginning July 1 and ending June 30, the Department will notify you in writing that you are being changed to annual filing status.  The due date for annual filers is January 31 for the previous calendar year's sales.

If your sales tax liability is more than $4,000 for the prior 12-month period, beginning July 1 and ending June 30, the Department will notify you in writing that you are being changed to monthly filing status.  The due date for monthly returns is the last day of the following month.  For example, the return for March will be due on or before the last day of April.

If the due date falls on a Saturday, Sunday or Legal Holiday, the return is due on the next business day.

For a calendar with all the due dates, please visit Business Tax Return and Payment Due Dates.

Information on Filing the Disaggregated Sales Tax Report -IP 2007(23).


Late filing of Sales tax returns 

PENALTY Paper Filing - If you file your return late and a payment of tax is due, you are subject to additional charges for penalty and interest. The penalty is 15% of the tax due or $50, whichever is greater.  NOTE:  Late sales & use tax return can not be filed using a telephone system.

ELECTRONIC Filing - The penalty for an electronically late filed return is:

  • 2% of an EFT payment not more than 5 days late;
  • 5% of an EFT payment more than 5 days but not more than 15 days late; and 
  • 10% of an EFT payment more than 15 days late.

INTEREST is charged at the rate of 1% per month or fraction of a month from the due date until the date of the payment.  If you do not include the penalty and interest with your payment of tax, you will be billed.


Reporting Computer & Data processing
 
Report the total gross receipts of the sale of computer and data processing services on Line 3 of Form OS-114, Sales and Use Tax Return.  Then follow the instructions for Line 74 of the return: Multiply the applicable gross receipts by .8333 for services on or before June 30, 2011 and enter the result on Line 74, Column A.  Multiply the applicable gross receipts by .8425 for services on or after July 1, 2011 and enter the result on Line 74, Column B.  That amount is added to any other deductions on the back of the return.  By reducing the gross receipts of computer and data processing services the effective tax rate is 1%.
 

Sales Tax Rates
 
There is only one statewide sales and use tax.  There are no additional sales taxes imposed by local jurisdictions in Connecticut. The statewide rate of 6.35% applies to the retail sale, lease, or rental of most goods and taxable services. However, there are exceptions:
  • The tax on the rental or leasing of a passenger motor vehicle for a period of 30 consecutive calendar days or less is 9.35%.
  • A tax rate of 7% applies to the following: the sale for more than $50,000 of most motor vehicles, the sale for more than $100,000 of a vessel, the sale for more than $5,000 of jewelry (whether real or imitation), the sale for more than $1,000 of an article of clothing or footwear intended to be worn on or about the human body, a handbag, luggage, umbrella, wallet or watch.
  • The sales and use tax rate for the sale of computer and data processing services is 1%.  For more information on the taxation of computer services, please review Policy Statement 2006(8), Sales and Use Taxes on Computer-Related Services and Sales of Tangible Personal Property.
  • The sales and use tax rate is 4 1/2% on the sale of motor vehicle to a nonresident member, or a member and his or her spouse jointly, of the armed forces of the United States stationed on full-time active duty in Connecticut.  For more information see Policy Statement 2001(4), Sales of Motor Vehicles to Nonresident Military Personnel and Joint Sales of Motor Vehicles to Nonresident Military Personnel and Their Spouses.

Common Filing Errors to Avoid
  1. Do not skip filing a return because you have no sales to report.  You MUST file a ZERO return or report the amount of total sales even if the tax is ZERO.
  2. If you are a mandatory electronic filer you must file sales tax return on-line using Taxpayer Service Center (TSC) or using the telephone.  The payments must be initiated on-line or over the phone.
  3. Remember late sales & use tax return can not be filed using a telephone system. If the return is late, and you are a mandatory electronic filer, the return must be filed on-line,
  4. If you are reporting non taxable sales or services (Deductions) on line 8, make sure you also complete (Back of Sales & Use tax return) and select appropriate deductions, if electronic be sure to click on the Deductions button to select your deductions.
  5. Use line A, B, or C for “Other Deductions” not on deductions list of the sales & use tax return,
  6. Remember the Deductions amount listed on line 8 can never be more than total “Gross Receipts” amounts listed on line 1, 2 or 3 of the sales & use tax return,
  7. Be careful when selecting the period for which you are filing a return,
  8. Generally, Sales & Use tax registration number is 8 to 12 digits number ending with 001.  Use correct tax registration number (TID) to file Sales & Use tax return,
  9. If you are closing the business, make sure to write “Final Tax Return” on top of the return if filing a paper tax return and complete bottom portion of Sales & Use tax return and enter last business date,
  10. Report only purchases subject to use tax by your business on line 4, 5 or 6 of the Sales & Use tax return.  Please do not list inventory items purchased for resale on line 8 of the return.

Sales Tax Forms & Publications