How Much Is Sales Tax in Connecticut?

Connecticut imposes a sales tax on the purchase of goods and certain services within its borders. This consumption tax is collected by retailers at the point of sale. The revenue generated from sales tax contributes significantly to the state’s budget, funding various public services and programs.

The Standard Sales Tax Rate

The standard sales tax rate in Connecticut is 6.35%. This rate applies to the retail sale, lease, or rental of most tangible goods and many taxable services. Unlike some other states, Connecticut does not have additional local sales taxes, meaning the 6.35% rate is consistent across all cities and towns.

Specific Sales Tax Rates

While the 6.35% rate applies broadly, Connecticut has established different sales tax rates for specific categories of goods and services. Meals and certain beverages, for instance, are taxed at a rate of 7.35%. Luxury items also face a higher rate of 7.75%. This includes most motor vehicles with a sales price exceeding $50,000, jewelry priced over $5,000, and articles of clothing, footwear, or accessories like handbags and watches with a sales price above $1,000.

The rental or leasing of a passenger motor vehicle for a period of 30 consecutive calendar days or less is subject to an even higher rate of 9.35%. Certain services, such as computer and data processing services, including canned software electronically accessed or transferred for business use, are taxed at a lower rate of 1%. Additionally, sales of vessels, their motors, trailers used for transport, and dyed diesel fuel for marine purposes are taxed at 2.99%. Digital goods, such as audio works, visual works, or reading materials accessed electronically for personal use, are taxed at the standard 6.35% rate.

Common Sales Tax Exemptions

Not all purchases in Connecticut are subject to sales tax, as the state provides several exemptions. Food products for human consumption, commonly known as groceries, are generally exempt from sales tax. This exemption, however, does not extend to prepared meals, carbonated beverages, candy, or alcoholic beverages.

Prescription drugs and medicines are also exempt from sales tax. Additionally, certain non-prescription drugs and medicines, including vitamins, pain relievers, and cough syrup, are exempt. While most clothing is generally taxable at the standard rate, an annual Sales Tax-Free Week, typically held in August, exempts most clothing and footwear items costing less than $100 per item. Other common exempt items include bicycle helmets, child car seats, and college textbooks.

What is Connecticut Use Tax

Connecticut’s use tax is a counterpart to the sales tax, applying to goods and services purchased outside of Connecticut but used, stored, or consumed within the state. This tax is owed when sales tax was not collected by an out-of-state seller, or when the sales tax collected was at a lower rate than Connecticut’s. The use tax rate is identical to the sales tax rate that would have been applied if the purchase had occurred in Connecticut.

For example, if an individual purchases an item online from a retailer in another state that does not collect Connecticut sales tax, the buyer is generally responsible for remitting the Connecticut use tax directly to the state. The use tax ensures that purchases made outside the state are taxed similarly to those made within Connecticut.