August 14, 2019
GUIDANCE REGARDING THE SINGLE-USE PLASTIC BAG FEE
Bureau of Agricultural Development and Resource Conservation
Plastic bags are a common occurrence at grocery stores, shopping malls, for restaurant take out and at your local farmers’ market and farm stand. But, with the passing of the single-use plastic bag legislation in July 2019, farmers at farmers’ market and farm stands throughout Connecticut are wondering how this new law will affect them.
Do farmers need to collect the tax? How do they report it? Are biodegradable bags included? What type of bags are exempt? Do farmers need to charge for the bag if it’s containing loose produce? The Department of Agriculture (DoAg) received these questions and many more from farmers and contacted the Department of Revenue Services’ (DRS) Legal Division to obtain answers to questions specific to the industry.
DRS has issued a guidance document regarding the single-use plastic bag fee (OCG-9), which provides more details and is updated as new questions are answered that is available at https://portal.ct.gov/-/media/DRS/Publications/OCG/OCG-9-BagFee.pdf?la=en.
Below are frequently asked questions and answers provided by DRS in additional to questions asked by the industry with answers provided by DRS Legal Division.
- What is a “single-use checkout bag”? A single-use checkout bag is a plastic bag with a thickness of less than four (4.0) mils provided by a store to a customer at the point of sale.Mils is a unit of measure referring to a thickness that’s one thousandth of an inch thick.
- What is the Plastic Bag Fee? The Plastic Bag Fee (fee) is a statewide fee of $0.10 per single-use plastic checkout bags that must be collected by stores making sales in Connecticut of tangible personal property (food included) to the public.
- Who is required to collect the fee? All stores are required to collect the fee. The new law defines a store as any retailer who is registered for Connecticut sales tax that sells goods directly to the public and maintains a retail location in Connecticut that provides plastic bags to its customers.
- When does a store need to start collecting the fee? Stores must start collecting the fee on August 1, 2019.
- Are any types of single-use plastic bags exempt from the fee? Thin plastic bags on a continuous, perforated roll that are used to contain meat, seafood, loose produce or other unwrapped food items are exempt.If a plastic bag is over 4.0 mils then it’s a reusable bag (not single-use) and also exempt.
- If a single-use plastic bag is being use to contain loose produce at a pick-your-own farm does the farmer need to charge the fee? No. Bags provided to contain loose produce are excluded from the plastic bag fee.
- If a single-use plastic bag is provided prior to the execution of the sale to contain loose produce while shopping at a farmers’ market does the farmer need to charge the fee? No. Bags provided to contain loose produce are excluded from the plastic bag fee.
- What if the single-use plastic bag is biodegradable, recyclable, or compostable? Are they subject to the fee? Yes. The plastic bag fee legislation does not distinguish compostable or biodegradable plastic bags from other plastic bags, so the fee is due.
- Is a farmer’s farm stand or display at a farmers’ market considered a store? Yes, if the farmer is registered for CT sales tax.
- If the farmer doesn’t have a sales tax ID associated with the business do they need to charge a fee? Farmers that are exclusively in the business of raising and selling tobacco, fruit, or vegetables are not required to obtain a Sales and Use Tax Permit (see IP 2018(19), Farmer's Guide to Sales and Use Taxes, Motor Vehicle Fuels Tax, Estimated Income Tax, and Withholding Tax). Such farmers also are not required to charge the plastic bag fee. However, farmers making sales of other types of tangible personal property, such as decorative items, must collect both the sales tax and the plastic bag fee.
- How does a farmer report the fee to the customer? If providing a receipt then farmers must indicate on the receipt the number of single-use plastic checkout bags provided and the total amount of the fee charged.
- Are there any of individuals (WIC/Senior FMNP users, SNAP users, etc.) that are exempt from having to pay the fee? No. If a fee must be charged, all customers must pay the fee.
- How does a store report the fees collected to DRS? Each store must report all Plastic Bag Fees it collects to DRS with its sales tax return under Conn. Gen. Stat. § 12-414, and remit such fees at the same time and in the same form and manner required under that section.
- Is the fee included in gross receipts for purposes of the sales tax? No. Sales tax is not imposed on the single-use plastic checkout bag fee. However, any municipal charges for bags are subject to sales tax.
- If a store provides donated or used plastic bags to its customers do they need to charge a fee? A fee must be charged regardless if it’s a used bag or a new one.The imposition of the fee is based on the provision of a store providing a plastic bag to a customer as part of a sales transaction.
- If a store uses plastic bags for reasons other than sales transactions do they need to charge a fee? The fee does not need to be collected if there is no sale to a customer. As a result, plastic bags used by a store for other purposes, such as providing promotional materials or offering free items unrelated to a sales transaction, are not subject to the fee.
- Do organizations, other than stores, giving away single-use plastic bags need to charge a fee to those they provide a bag to? No.
- When is the ban on single-use plastic checkout bags in effect? As of July 1, 2021, single-use plastic checkout bags are scheduled to be banned in the State of Connecticut.
Did you know:
Municipalities may enact or enforce an ordinance concerning single-use plastic checkout bags, provided the ordinance is as restrictive or more restrictive as the state legislation.
Municipalities may enact or enforce an ordinance concerning paper checkout bags, including, but not limited to, enabling each store to charge a fee for any such bag distributed to a customer.
Any municipal charges for a bag are subject to sales tax. If a municipality were to charge its own plastic bag fee, it would be in addition to the state plastic bag fee.
Municipalities may enact bans of plastic bags prior to the statewide ban on July 1, 2021.
While the question of the $.10 fee is the current concern, the inevitable is the complete ban on any single-use plastic bags by July 1, 2021. DoAg is actively working to develop a reusable bag purchase program for farmers. More information will be forthcoming.
For additional information and questions regarding tax registration, filing, or collecting, please call DRS during business hours, 8:30 a.m. to 4:30 p.m., Monday through Friday at 860-297-5962. Industry specific questions can be directed to Jaime Smith at Jaime.Smith@ct.gov.