Rental Surcharge Information
- What's New 2022
- Who Must Register and File the Rental Surcharge Annual Report
- Rental Surcharge
- How to File
- When to File
- Interest and Penalties
Form OP-383, Rental Surcharge Annual Report, is required to be electronically filed and paid for periods beginning on or after January 1, 2022.
A rental company is required to register for the rental surcharge if it charges a lessee for machinery rented within Connecticut for a period of less than 365 days or under an open-ended contract for an undefined period of time.
Rental companies that are required to file the Rental Surcharge Annual Report may register online through myconneCT. Go to myconneCT, under Business Registration, click New Business/Need a CT Registration Number? There is no fee for registering for the rental surcharge.
Use myconneCT to file taxes, make payments, view filing history, and communicate with the agency simply and more efficiently on virtually any mobile device, including laptops, tablets, and smartphones, 24 hours a day, 7 days a week.
The rental surcharge is imposed on machinery rented within Connecticut by a rental company to a lessee for a period of less than 365 days or under an open-ended contract for an undefined period of time. The rental surcharge is imposed on the total amount the rental company charges the lessee for the rental of the machinery. The rental surcharge is in addition to any tax otherwise applicable to any rental, and is includable in the measure of the sales and use taxes imposed under Chapter 219.
For the purpose of the rental surcharge on a daily rental of machinery, the period for the term of a machinery rental begins on the date a piece of machinery is rented to a lessee and terminates on the date the piece of machinery is returned to the rental company. Therefore, if a rental of a piece of machinery is renewed before the machinery is returned to the rental company, the term of the renewal is added to the term of the initial rental to determine the rental period. The rental is not subject to the rental surcharge if the initial rental of a piece of machinery:
- Is for a term of less than 365 consecutive calendar days, and
- After adding the renewal term to the initial term, the rental period is 365 consecutive calendar days or more.
Machinery means all equipment owned by a company that qualifies as a rental company including, but not limited to, bulldozers, earthmoving equipment, well‑drilling machinery and equipment, or cranes. The term “equipment” should be given its commonly understood meaning and include the implements (machinery and tools) used in operation or activity. Such activities include, but are not limited to, construction, mining, and forestry.
For additional information, see OCG‑1, Office of the Commissioner Guidance Regarding the Rental Surcharge.
The rental surcharge rate for the rental of machinery is 2.75%.
Form OP‑383, Rental Surcharge Annual Report, must be filed and paid electronically using myconneCT. When filing Form OP‑383, follow the instructions on myconneCT for filing Schedule A. DRS myconneCT allows taxpayers to electronically file, pay, and manage state tax responsibilities.
File Form OP-383 annually, on or before February 15.
In general, interest applies to any portion of the surcharge not paid on or before the original due date of the return. If you do not pay the surcharge when due, you will owe interest at the rate of 1% per month or fraction of a month until the surcharge is paid in full.
Penalty for nonpayment or late payment of tax
15% of the tax due or $50, whichever is greater.
Penalty for failure to pay electronically
The following graduated penalty amounts will apply if you fail to remit payments electronically:
- First offense – 10% penalty on the amount of the required tax payment, but not more than $2,500;
- Second offense – 10% penalty, but not more than $10,000; and
- Third and subsequent offenses – 10% penalty.