Taxable services include computer or motor vehicle repair services, cleaning services, answering services, and charges for online computer services. Any purchase of goods or services that is not subject to Connecticut sales tax is also not subject to use tax. Connecticut sales tax may apply to shipping, handling, delivery, freight, and postage charges. Typically, if the sale is taxable, these charges are taxable even if stated separately; if the sale is tax-exempt, shipping and handling charges will most likely be exempt as well.
Professional services are generally not taxable in the state of Connecticut, unless they include the manufacture of a product for sale. It expires every two years, but the Connecticut Department of Revenue Services automatically renews it and mails it to you at no cost, as long as your account is active. We encourage businesses to review the laws and regulations established by the Department of Revenue Services to keep up to date on what assets are taxable, which are exempt, and under what conditions. The Connecticut Department of Revenue Services requires non-collecting sellers to notify customers of their potential use tax liability, provide customers with an annual summary of purchases, and provide the state with a customer information report.
You can view this page for a detailed list of taxable services from the Connecticut Office of Legislative Investigation. Once you have collected sales tax, you must submit it to the Revenue Services Department by a certain date. A digital good or service is everything that is delivered electronically, such as an album downloaded from iTunes or a movie purchased on Amazon. If you're audited and can't validate an exempt transaction, Revenue Services can hold you responsible for uncollected sales tax.
As a business owner that sells taxable goods or services, you act as an agent for the State of Connecticut by collecting taxes from buyers and passing them to the appropriate taxing authority. Determining if the products or services your business sells are taxable in Connecticut is the first step to complying with sales taxes.