What Services Are Taxable in Connecticut?

Sales tax in Connecticut applies to the retail sale, lease, or rental of most tangible goods and certain specified services. The Connecticut Department of Revenue Services (DRS) administers this tax. Businesses selling taxable goods or services in the state are responsible for collecting the tax from customers and remitting it to the DRS.

General Principles of Sales Tax on Services

The general sales and use tax rate in Connecticut is 6.35%. Unlike some other states, Connecticut does not have additional local sales taxes, meaning the rate is consistent across the state.

Businesses that sell taxable goods or services act as agents for the state, collecting this tax from purchasers. This collected tax does not belong to the business but to the State of Connecticut.

While tangible personal property is generally taxable unless specifically exempt, services are not taxable unless explicitly enumerated by statute. A service is only subject to sales tax if state law specifically lists it as taxable. The DRS provides detailed guidance on these specific service categories.

Categories of Taxable Services

Connecticut law enumerates various services subject to sales tax, often at the standard 6.35% rate, though some have different rates. Computer and data processing services are taxed at a reduced rate of 1%. This lower rate also applies to canned software that is electronically accessed or transferred for business use.

Services related to advertising and public relations are taxable, including activities such as graphic design, layout, and production supervision. Business analysis, management, and management consulting services also fall under the taxable umbrella. This includes general consulting services aimed at improving business operations.

Personal care services like manicures, pedicures, and other nail services are subject to sales tax. Health and athletic club services, including yoga instruction provided at a studio, are also taxable. Cosmetic medical procedures are another type of personal service subject to the tax.

Maintenance and repair services are extensively taxed. This includes janitorial services for homes, offices, and commercial properties, as well as landscaping and horticulture services. Repair services for motor vehicles, including painting and body work, are taxable. Similarly, repair services for electrical or electronic devices, such as air-conditioning and refrigeration equipment, are subject to sales tax.

Other taxable services include:
Cable and satellite television services
Car wash services (including coin-operated)
Credit information and reporting
Employment agencies and services providing personnel
Exterminating services
Furniture reupholstering and repair
Locksmith services
Motor vehicle storage services (including those for motor homes and campers)
Motor vehicle towing and road services
Packing and crating services
Painting and lettering services
Parking services (except metered spaces)
Pet grooming, boarding, and obedience training
Photographic studio services
Piped-in music for businesses
Prepaid telephone calling services
Private investigation, protection, patrol work, watchman, and armored car services (excluding services by off-duty police or firefighters)
Radio or television repair services
Refuse removal for commercial, industrial, or income-producing property
Renovation and repair services to existing commercial, industrial, and income-producing property
Repair or maintenance services to tangible personal property and related contracts

Exempt Services and Specific Exemptions

Professional services like medical, legal, and accounting services are not subject to sales tax, provided they are not part of a larger transaction involving a taxable good or enumerated service. Certain services may also be exempt under specific conditions or for particular entities.

For instance, some services rendered at the residence of a disabled person, such as landscaping or window cleaning, can be exempt if the recipient is receiving total disability benefits under the Social Security Act and provides the necessary certification. Water, steam, and telegraph services delivered through mains or lines are exempt.

Non-profit organizations may qualify for sales tax exemptions on purchases of goods or taxable services if these purchases are for the organization’s established purposes and paid for with organizational funds. To claim this exemption, the organization must provide a completed CERT-119 form and a copy of its IRS determination letter. However, non-profit organizations generally must still collect sales tax on sales of taxable goods and services to their customers, with some exceptions for specific fundraising events.

Collection and Remittance Procedures

Businesses that provide taxable services in Connecticut must register with the Department of Revenue Services (DRS) to obtain a Sales and Use Tax Permit. This registration can be completed online through the myconneCT portal, and there is a $100 fee for the permit. A temporary permit is often available immediately upon online registration, with the permanent permit mailed within a few weeks.

Once registered, service providers are required to calculate the sales tax on taxable services and collect it from their customers at the point of sale. The collected sales tax must then be remitted to the DRS. Businesses are assigned a filing frequency—monthly, quarterly, or annually—based on their anticipated sales tax liability. Businesses with higher sales volumes are required to file more frequently.

Sales tax returns, Form OS-114, must be filed electronically through the myconneCT portal. This electronic filing requirement applies even if no sales were made or no tax is due for a given period. Payments are also required to be made electronically, either through direct debit from a bank account or by credit/debit card, though a convenience fee may apply for card payments. Returns and payments are due on the last day of the month following the reporting period.