Sales Tax Nexus
Out-of-state or remote sellers with no physical presence in Connecticut may establish a sales tax nexus through the following:
- Affiliate Nexus
- Click-Through Nexus
- Economic Nexus
Affiliate Nexus
If an out-of-state seller has business ties in Connecticut. This may include the design and development of tangible personal property (goods) sold by the remote retailer or solicitation of sales of goods on behalf of the retailer.
Click-Through Nexus
Having an agreement to reward a person(s) in the state for directly or indirectly referring potential purchasers of goods through an internet link, website, or otherwise, and cumulative gross receipts from such referrals to the retailer exceed $100,000 during the four preceding quarterly periods.
Note: The threshold was $250,000 until June 30, 2019.
Economic Nexus
A remote seller may establish a sales tax nexus by having a certain amount of economic activity in the state. After registering, sales tax from sales made on and after December 1, 2018 must be collected and remitted to the Connecticut Department of Revenue.
Economic thresholds:
- Gross receipts of at least $250,000 from retail sales of property and
- 200 separate retail sales in the state; and
- Regular or systematic solicitation of Connecticut sales during the preceding 12-month period.
Marketplace Sellers
Marketplace sellers with no physical presence in a state may establish sales tax nexus in the following ways:
A marketplace seller is required to register with the Connecticut Department of Revenue Services if they meet any of the following:
(1) If you’re an out-of-state retailer and make 200 or more retail sales in Connecticut and have at least $100,000¹ in gross receipts from sales into Connecticut annually. These thresholds include sales made through a marketplace facilitator.
Action: Register for sales tax by completing Form REG-1. You can download a copy of Form REG-1 at this link.
(2) If you’re an out-of-state retailer required to register based on the above thresholds but only sell through a marketplace facilitator that is collecting and remitting on your behalf
Action: Register for sales tax by completing Form REG-1. Select the new box in the sales tax section of Form REG-1 declaring that you make sales only through a marketplace facilitator. You will need to file your sales tax on an annual basis.
A marketplace seller is not required to register with the Connecticut Department of Revenue Services if they are any of the following:
(1) If you’re an out-of-state retailer and do not meet the annual threshold, You are not required to register but may register to collect use tax by completing REG-7. You can download a copy of Form REG-7 at this link
(2) If you are located in Connecticut but are making casual and occasional sales only, you are not required to register for sales tax. Casual and occasional sales pertain to not running a business or using a resale certificate.
¹ The sales threshold used to be $250,000 before the state tax legislation was later amended in 2019.