Connecticut: The Constitution State

According to ehuacom, Connecticut is located in the north-east of the USA, on the Atlantic Ocean. With an area of ​​14,000 km², the “Constitution State” is the third smallest state in the USA and belongs to the New England region. The state is surrounded by Massachusetts to the north, Rhode Island to the east, Long Island Sound to the south and New York to the west. More than half of the area is forested, hills, lakes and plains characterize the rest of the country. A relatively high proportion, over twelve percent, is also covered by water. About 3.5 million people live in Connecticut.

As it has been for centuries, Connecticut is the place for original ideas and fresh thinking. Fortune 500 companies and breakthrough startups have their place, as do established leaders, emerging innovators and a productive workforce.

Connecticut Location Map

PRIME LOCATION FOR NATIONAL AND INTERNATIONAL TRADE

Within a 500-mile radius of Connecticut are 30% of the entire US population and two-thirds of the entire Canadian population. This proximity will be made even more profitable by the state’s multimodal, multi-billion dollar investment strategy in transportation infrastructure. The investment program includes improvements to highways, bridges, airports, rail and bus systems, and ports.

Connecticut’s interconnected ports, railroads, and highways are already great for moving goods and people. The state has three deep sea ports (Bridgeport, New Haven and New London) making it ideal for domestic and international exports.

INNOVATION IN THE DNA

Whether it’s innovation on land, sea or in the air, Connecticut has long been at the forefront. The first nuclear submarine, the first helicopter and also the fuel cell that powered NASA’s first space suit were invented in the “Constitution State” and form an impressive record of success.

But not only the look into the past is worthwhile. Currently, 14 of the nation’s top Fortune 500 companies are headquartered in Connecticut. Global leaders in advanced manufacturing or in the field of new technologies are represented here. You can count on the second best internet connection in the US (BroadbandNow, 2018). In a national comparison, the state ranks fourth in terms of investments in research and development (EMSI, 2019; AdvanceCT calculations).

There is an extensive, high-quality network of innovation incubators and dozens of co-working spaces. Connecticut is a top destination for entrepreneurs looking to start new businesses, for highly skilled talent and for seasoned professionals. So the outlook is also promising.

HIGHLY PRODUCTIVE WORKFORCE

Smart, resourceful employees who think big and work hard—these are the hallmarks of Connecticut’s talent pool. Results from a US Census Bureau study show that the Constitution State has the third-highest percentage of adults with advanced degrees. The state ranks fourth in the category of labor productivity. If Connecticut were a separate country, it would rank sixth in the world in this area.

In particular, life sciences, renewable energy, advanced manufacturing, digital media and information technology companies offer promising career opportunities for talented people with the skills and drive to succeed. The leadership positions these companies hold ensure that the best and brightest from New York and southern Massachusetts find their way to Connecticut.

The signs are good that we will continue to be able to rely on highly qualified specialist staff in the future. With Yale University, the third best university (US News and World Report, Best Colleges 2020) is firmly anchored in Connecticut. The same applies to Quinnipiac University, which was named the third most innovative in 2018 (US News and World Report).

CONNECTICUT INCOME TAX

Connecticut charges an income tax of 3 – 6.99% depending on income. In addition, federal income taxes are payable.

CONNECTICUT CORPORATE INCOME TAX

Connecticut charges a 7.5% corporate income tax. In addition, federal corporation tax is payable.

SALES TAX IN CONNECTICUT

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in Connecticut

The sales tax in Connecticut is 6.35% at the state level. Municipalities or counties do not levy a sales tax.

Connecticut Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date :

December 1, 2018; changed on July 1, 2019

Transactions included:

Before July 1, 2019 : Gross receipts from tangible personal effects sold in the US states, excluding sales for resale, provided the retailer regularly or systematically requests sales in the state. Services are not included.

As of July 1, 2019 : gross receipts from tangible personal goods or services; the regular or systematic prompt component is omitted.

Treatment of tax-exempt transactions:

Before July 1, 2019 : Exempt sales are included in the sales threshold; Sales for resale are excluded from the transaction test; Exempted services are also excluded from the sales and transaction test

As of July 1, 2019 : exempt sales and exempt services are included in the sales threshold, as are sales through an online marketplace; Exempt sales and tax-exempt services (other than sales for resale) are excluded from the transaction threshold

Reason:

Turnover and transaction volume

Sales/Transactions Threshold:

– Before July 1, 2019: $250,000 in gross receipts and 200 retail transactions

– As of July 1, 2019: gross receipts of $100,000 and 200 retail transactions

Evaluation period:

The threshold applies to all transactions within the 12-month period ending September 30 immediately prior to the monthly or quarterly period in which liability is determined.

Extra information:

  • Registration Requirements : Connecticut did not specify how quickly a remote business must register once it crosses the Economic Nexus Threshold.
  • SB 417
  • HB 7424

Connecticut Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

December 1, 2018

Economic Nexus Threshold:

At least 200 transactions and $250,000 in Connecticut’s US state gross receipts in the preceding 12-month period; Threshold changes to 200 transactions and $100,000 sales effective July 1, 2019. When calculating the threshold:

  • Remote sellers should include sales through a marketplace
  • Marketplace moderators include all sales made through the marketplace

Registration requirements:

  • Remote Multichannel Sellers: You must register with the Connecticut Department of Revenue Services (DRS) and collect Connecticut sales tax on sales not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
    • Sales made through a collection marketplace should be declared and deducted as gross sales.
  • Remote Marketplace Sellers: You must register with the Connecticut DRS.
    • State that you will only sell through a marketplace agent and will be registered for an annual subscription.
    • Sales made through a collection marketplace should be reported and deducted as gross sales.
  • In-State Multichannel Sellers: You must register and collect sales tax on sales that are not taxed by a marketplace intermediary.
    • Sales made through a collection marketplace should be reported and deducted as gross sales.
  • State Marketplace Sellers: You must register with the Connecticut DRS.
    • State that you will only sell through a marketplace agent and will be registered for an annual subscription.
    • Sales made through a collection marketplace should be declared and deducted as gross sales.