Understanding the Connecticut Sales Tax Nexus

Daniel Kostrzewa
November 12, 2020

Connecticut was one of many states that quickly implemented sales tax nexus rules in response to the South Dakota v. Wayfair, Inc. decision. In fact, while Connecticut initially enacted a $250,000 threshold in December 2018, the state has already made adjustments to its economic nexus law by lowering its threshold to $100,000. Connecticut Governor Ned Lamont signed H.B. 7424 on June 26, 2019, which brought those changes into effect. Below, we highlight some of the other major points for out-of-state sellers.

Enforcement date:
July 1, 2019.

Sales/transactions threshold:
$100,000 and 200 retail transactions.

Measurement period:
Threshold applies to the 12-month period ending on September 30th immediately preceding the monthly or quarterly period a person’s liability for sales tax is determined.

Included transactions/sales:
Retail sales of tangible personal property or services.

When You Need to Register Once You Exceed the Threshold:
Out-of-state sellers should register on October 1 if they met the sales and transactions thresholds during the preceding 12 months.

Summary: Remote sellers in Connecticut must collect and remit sales tax, if during the preceding 12-month period ending on September 30 they had gross receipts of at least $100,000 and made 200 or more retail sales into Connecticut.

Marketplace facilitators are required to collect and remit sales tax on behalf of their marketplace sellers. Connecticut defines a marketplace facilitator as any person who:

  • Facilitated retail sales of at least $250,000 during the prior 12-month period by marketplace sellers by providing a forum that lists or advertises tangible personal property subject to sale and use taxes or taxable services, including digital goods, for sale by such marketplace sellers;
  • Directly or indirectly through agreements or arrangements with third parties, collects receipt from the customer and remits payments to the marketplace sellers; and
  • Receives compensation or other consideration for its services.

 Connecticut Sales Tax Resources: Reach out to our team of experts to see how the Connecticut economic nexus sales tax might impact your business. Be sure to check out our interactive sales tax nexus map for real-time information on other states.

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Daniel Kostrzewa

Daniel Kostrzewa is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Daniel focuses on domestic sales tax issues. Prior to joining Sovos in 2018, he worked as an attorney in Boston. Daniel received his B.A. in Economics from Boston College and J.D. from Boston College Law School. He is a member of the Massachusetts Bar.
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