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Why We Love the Internet and Hate the Tax Man

The Connecticut commissioner of revenue services reminds you taxpayers that you're responsible for paying sales taxes to the state even if your out-of-state online merchant isn't collecting them.

Connecticut Commissioner of Revenue Services Kevin B. Sullivan. If you bought that coal for the kids' stockings out of state, he wants you to pay the sales tax on it.
Connecticut Commissioner of Revenue Services Kevin B. Sullivan. If you bought that coal for the kids' stockings out of state, he wants you to pay the sales tax on it.
In an era when buying Christmas gifts has been made so easy by the Internet, the state's top tax collector tells us that it's our duty to calculate and render unto Connecticut the state's 6.35 percent sales tax.

Whether or not some business located in another state arranges to charge customers for the sales taxes owed in the customer's own state, county or other local authority, the cumbersome responsibility for calculating and paying those taxes to Connecticut falls on us Nutmeggers, says state Commissioner of Revenue Services Kevin B. Sullivan in a news release issued on Cyber Monday.

How do you go about paying the state it's cut on your Christmas gifts and other purchases? Well, you know there's gotta be a brochure for that: In this case, it's Informational Publication 2011 (15). (They put it online to make it easier for you.) This excerpt from Part 13 shows you just how easy it all is:

"Example: You purchased a $1,000 refrigerator in another state and paid $50 tax to that state. If you bought the refrigerator for use in Connecticut, you owe Connecticut use tax of $13.50, calculated as follows: the Connecticut tax of $63.50 ($1,000 x 6.35%) is reduced to $13.50 after allowing $50 credit ($63.50- $50.00 = $13.50) for the tax paid to the other state. If no tax was paid to the other state, the Connecticut use tax would be $63.50."

Here's a news release from the Connecticut Department of Revenue Services:

On Cyber Monday, the busiest online shopping day of the year, Connecticut’s Commissioner of Revenue Services Kevin B. Sullivan reminded Connecticut shoppers that just because an online retailer does not collect state sales tax, it does not mean the item is tax-free. 

Said Commissioner Sullivan, “When on-line retailers fail to collect and remit tax on sales made into Connecticut, they pass the buck to consumers to report and pay state use tax. This year, the single largest on-line retailer, Amazon.com will take care of sales taxes directly but many other on-line retailers still do not. Instead, those who buy on-line are legally responsible for calculating the tax and paying it to the state.”   

Sullivan noted that state income taxpayers are required to declare, attest under penalty of law, and pay use tax due for the year when filing annual income tax returns. 

Added Sullivan, “Too many on-line retailers are misleading and putting state taxpayers at risk of tax fraud when they neither collect sales tax nor advise customers about the use tax. These on-line retailers are also unfairly competing all of the other retailers doing business in Connecticut.”

For information about the Connecticut use tax, readInformational Publication 2011(15), Q&A on the Connecticut Individual Use Tax, which is available on the Department of Revenue Services website at www.ct.gov/drs.

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