Connecticut – CT Sales Tax Calculator: User Guide

Looking for a handy tool and a comprehensive guide to deal with sales tax in The Constitution State?

Look no further!

From Connecticut Sales tax facts to Sales tax calculation, this guide tells you everything you need to know.

Connecticut Sales Tax Facts:

• Connecticut State levies statewide sales tax rate of 6.35%.
• As Connecticut is a destination-based state, so sales tax is levied according to the buyer's location.
• No city or county in Connecticut levies a local income tax, so the maximum combined sales tax rate levied in 6.35%.
• No special sales tax is levied on the state, county, or city level in the state.
• Connecticut sales have 28^th highest combined sales tax rate and 6^th highest statewide sales tax rate among the 50 states.
• Groceries, Prescription Drugs, and OTC Drugs are among products exempted from Sales Tax in Connecticut.
• Connecticut State has two sales tax holidays, scheduled between August 18th and August 24^th, where you can buy clothing and footwear without having to pay the Connecticut sales tax. (Note: holiday dates and products may change, so you must keep yourself updated by regularly visiting the state's official site).
• Retail sale, lease, or rental of most goods and taxable services, including consulting and advertising, are subjected to sales tax in Connecticut except for Items purchased for resale, improvement, or as raw materials.
• Rental of passenger motor vehicles for 30 days or less are charged with a higher sales tax rate of 9.335%. Moreover, larges sales, like the sale of motor vehicles, are taxed at 75%. However, certain computer-related services like web development and data processing are charged at 1%.

How to calculate Sales Tax in Connecticut?

Businesses and Sellers who have Nexus in Connecticut collect sales tax on taxable tangible goods and some services. They are required to collect, manage, and remits it to the Connecticut Department of Revenue Services (DRS) while staying in compliance with state laws and avoid penalties and interest.

The sales tax determined on three factors:

1. Nexus: It is a connection of business with a state. The business is only liable to pay taxes to the states with Nexus.
2. Products or Services: The sales tax rate varies from product to product, so you must check the sales tax rate applicable to your product according to the product category in Connecticut.
3. Exemptions: Almost all goods are eligible for sales tax regulation. However, products, including Groceries, Prescription Drugs, and OTC Drugs and few more, are exempted under Connecticut Law. So you should check with Connecticut state government as to which goods and services sold in Connecticut are subject to sales tax.

To calculate Sales Tax in Connecticut, follow the steps below:

Step 1 – Determine your Nexus:

You, as a Business owner, are only required to collect sales tax if you have Sales Tax Nexus in the Connecticut State. And to determine your Nexus in Connecticut, you must have any of the following:

• A physical location like office, sample room, distribution center, or other places of business.
• Ownership of real or personal property In the state
• An employee present in Connecticut for more than two days per year
• Warehouse with inventory in the state
• Delivery of merchandise in vehicles in Connecticut owned by the taxpayer
• Representatives like Independent contractors in the state for more than two days per year
• Economic nexus

Step 2 – Determine the Sales Tax Rate:

Once you have determined that your Nexus is with Connecticut, next is to deduce the Sales Tax rate (State Sales Tax) applicable on your product, for which you can refer the tables below:

Connecticut Sales Tax Rates by Types of Sales:

The state-wide Sales Tax rate in Connecticut is 6.35%. Besides, no cities and counties levy additional local sales tax on tangible personal property and certain services. However, there are certain exemptions:

• 35% of Sales tax is charged on the leasing or rental of a passenger motor vehicle for a period of 30 consecutive calendar days or less.
• Sales tax of 1% is charged on the sale of computer and data processing services.
• 5% of sales tax is charged on a member and his or her spouse jointly, Armed forces of the US stationed on full-time active duty in the state, or sale of a motor vehicle to a nonresident member.
• 99% of sales tax and use tax is charged on the sale of vessels, motors for vessels and trailers used for transporting a vessel.
• 75% of sales tax is charged on the following:
  1. Sale of most motor vehicles for more than $50,000
  2. Sale of real or imitation jewelry pf worth more than $5,000
  3. Sale of clothing or footwear (of worth more than $1,000 of an article) intended to be worn on or about the human body, luggage, wallet, handbag, umbrella, or watch.

Step 3 – Calculate Sales Tax:

After the determination of the Sales Tax rate according to the type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.

Example:

For instance, you are selling a wristwatch on your store in Madison, Connecticut, having a net price tag of $300. The amount that a buyer has to pay (including sales tax) on a check out would be:

Manual Method:

Net Price (amount before Tax) of a Wrist Watch: $300

Total Sales Tax rate: 0% (Madison) + 0% (New Haven County) + 6.35% (Connecticut State) = 6.35%

Total Sales Tax amount = $300 x 6.35% = $19.05

Gross Price (Amount after Tax) = 300 + 19.05 = $319.05

It means the amount the buyer has to pay for a Wrist Watch on a cash counter would be $108.25.

Using our Sales Tax Calculator:

All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:

1. Input the $300 Net Price of a Wrist Watch as Amount Before Tax
2. Input or select 35% of the combined Sales Tax rate on the Tax Rate menu.

Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:

Reverse Sales Tax Calculation

In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.

But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.

This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Connecticut Sales Tax Calculator can perform this calculation like a Pro.

Example:

Your buyer has paid $455 for a Wall Clock at your store in Milldale, Connecticut. Now the buyer is inquiring how much the Wall Clock actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of a Wall Clock:

Gross Price (Amount after Tax) of Wall Clock: $455

Total Sales Tax rate: 0% (Milldale) + 0% (Hartford County) + 6.35% (Connecticut State) = 6.35%

Manual Method:

Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]

455 = [Net Price x ((6.35/100) + 1)]

455 = Net Price x 1.06

$429.2 = Net Price

So the original Price (net price) of the Wall Clock was $429.2.

Using our Sales Tax Calculator:

You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the above mentioned manual method. All you need is:

1. Input the $455 Gross Price of Wall Clock as Amount after Tax
2. Input or select 6.250% of combined Sales Tax Rate on the Tax Rate

Our calculator will automatically calculate the result and represents it in 3 different forms.

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