Questions and Answers on the Connecticut Individual Use Tax
This Informational Publication has been superseded by IP 96(10.1)
This information discusses the Connecticut use tax and answers commonly-asked questions about the tax. Understanding the use tax provisions is important because failure to comply can result in payment of interest and penalties. You must pay the Connecticut use tax on taxable goods and services when a Connecticut merchant fails to collect Connecticut sales tax from you or when you purchase taxable goods or services for use in Connecticut from an out-of-state merchant that is not registered to collect Connecticut sales tax.
1. What is the use tax?
When you make a retail purchase in this state, you will usually pay sales tax to the seller who in turn pays the tax to the Department of Revenue Services (DRS). There are some instances where Connecticut sales tax is not paid to the retailer. In these situations, the use tax must be paid by the purchaser directly to DRS. This tax has been in effect since 1947.
2. On what kind of goods or services must I pay use tax?
Personal property, whether purchased or leased, including but not limited to, clothing costing $50 or more, automobiles, appliances, furniture, VCRs, jewelry, cameras, computers and computer software. Services include, but are not limited to, tax preparation services (other than services relating to business returns and business schedules of individual returns); repair services to your television, motor vehicle or computer; landscaping services for your home; or reupholstering services for your household furniture.
3. Are there exemptions from the use tax?
Generally, all goods or services that are exempt from sales tax if purchased in Connecticut, are exempt from the use tax if purchased out-of-state for use in Connecticut. Some examples are: clothing costing less than $50, or newspapers and magazines by subscription.
4. What if a Connecticut retailer doesn't collect tax from a customer on a sale of taxable goods or services?
The customer must report the use tax liability on Forms CT-1040EZ, CT-1040 or CT-1040NR/PY for purchases made during the prior calendar year.
5. What if a customer buys taxable goods or services from an out-of-state mail order company, television shopping channel, or computerized shopping service and no Connecticut tax was charged by the vendor?
If the goods or services were purchased for use in Connecticut, the customer must report the use tax liability on Forms CT-1040EZ, CT-1040 or CT-1040NR/PY for purchases made during the prior calendar year.
6. What if a customer buys taxable goods or services in another state and sales tax of the other state was charged by the vendor?
If the goods or services were purchased for use in Connecticut and if the tax paid to the other state is less than the Connecticut tax, then the customer must report and pay the use tax. The tax due would be the Connecticut tax less the tax paid to the other state.
Example: You purchased a $1,000 refrigerator in another state, and paid a $50 tax to that state. If that refrigerator was purchased for use in Connecticut, a Connecticut use tax is owed. The Connecticut tax of $60 is reduced to $10, after allowance of $50 credit. If no tax was paid to the other state, however, the Connecticut use tax is $60.
7. Am I being misled by an out-of-state merchant who tells me that I do not need to pay Connecticut use tax?
Yes. While you may or may not have to pay tax in another state where you bought the goods or services, you must pay Connecticut use tax on taxable goods or services purchased for use in Connecticut.
8. Do I owe Connecticut use tax on all my out-of-state purchases of taxable goods and services?
No. Items that you purchased at one time for $25 or less and that you brought into Connecticut are not subject to Connecticut use tax. The $25 exemption does not apply, however, to items that are shipped or mailed to you.
9. Can an out-of-state business, for example, a mail-order house, collect Connecticut use tax on taxable goods which are mailed or delivered into Connecticut?
Yes, if the business has been registered to collect Connecticut use tax. If the business is not registered, then you must report and pay the tax yourself.
10. When must individuals pay the use tax?
An individual must report the individual use tax on their individual income tax return (Individual Use Tax Worksheet) filed by April 15 for purchases made during the preceding calendar year, where the purchases are not made in connection with a trade or business carried on by the individual. If the taxpayer is not required to file a Connecticut income tax return, the use tax must be reported on Form OP-186, Connecticut Individual Use Tax Return. A person may file one return for the entire year or may file several returns throughout the year.
11. Do persons engaged in a trade or business have an obligation to pay use tax on purchases made in connection with their trade or business?
Yes, if they make taxable purchases of goods or services out-of-state for use in their trade or business (e.g. office furniture, computers, and supplies). They should be registered with DRS for business use tax purposes and report their purchases on their monthly or quarterly Form OS-114, Sales and Use Tax Return. For further information, you may request IP 93(3.1), Questions and Answers on the Connecticut Use Tax for Businesses and Professions.
12. What are the penalties and interest for not paying the use tax?
The penalty is 15% of the tax or $50, whichever is greater. Interest is charged at the rate of 1% per month from the due date of the tax return. There are also criminal sanctions for willful failure to file a tax return.
13. What are the use tax filing requirements for airplanes, vessels and motor vehicles?
Generally, if the item is not purchased from a retailer, the Connecticut Department of Motor Vehicles will collect the use tax when an individual registers the motor vehicle or vessel. The Connecticut Department of Transportation will collect the use tax when an individual registers an aircraft. If you do not intend to register your motor vehicle, vessel or aircraft immediately after you purchase it, you must report the use tax liability on Forms CT-1040EZ, CT-1040 or CT-1040NR/PY for purchases made during the prior calendar year, where the purchase is not made in connection with a trade or business carried on by the individual.
14. On what amount should the use tax be calculated?
The tax rate should be applied to the total cost of the taxable goods or services purchased, including separately stated charges (i.e., shipping and handling).
EFFECT OF THIS DOCUMENT: An Informational Publication is a document that addresses frequently-asked questions about a current Department position, policy or practice, usually in a less technical, question-and-answer format.
EFFECT ON OTHER DOCUMENTS: None affected.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.
Individual Use Tax