TSSN-40

Special Notice Concerning Federal Luxury Taxes

This TSSN is obsoleted by AN 94(6)

As of January 1, 1991, a tax of 10% ("the luxury tax") is imposed by the federal government on certain retail sales of jewelry, furs, automobiles, boats and aircraft. The tax applies to that portion of the retail sales price of jewelry and furs which exceeds $10,000, of automobiles which exceeds $30,000, of boats which exceeds $100,000, and of aircraft which exceeds $250,000. The purpose of this special notice is to inform retailers that the Connecticut Sales and Use Tax does not apply to the amount of this federal luxury tax if the amount of this tax is separately stated on the invoice to the customer.

The Connecticut Sales and Use Tax applies to the total gross receipts of the sale. According to Connecticut General Statutes, the gross receipts does not include any tax imposed by the federal government upon retail sales whether the tax is imposed upon the retailer or the consumer. The new federal luxury taxes imposed under the Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, is a tax on the retail sale of these goods and is, therefore, not subject to Sales and Use Tax if the amount of the tax is separately stated on the invoice to the customer.

Please be aware, however, that Connecticut Sales and Use Tax does apply to the amount of any manufacturer's or importer's excise tax, which is a tax imposed upon the manufacturer or the importer prior to the first retail sale of the goods. For example, the amount of excise tax imposed upon manufacturers or importers of tires is subject to the Connecticut Sales and Use Tax regardless of whether the amount of that tax is separately stated on the invoice to the customer.

PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.

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. 

TSSN-40 (New 12/90)