As followers of this blog know, and as explained in our 2018 Connecticut Tax Law Update, Connecticut imposes sales tax economic nexus.

In Connecticut, the definitions of the terms “engaged in business in the state” and “retailer” have been modified so as to now subject to Connecticut taxing jurisdiction, to the extent not prohibited by the United States Constitution, an out-of-state retail business that engages in the regular or systematic solicitation of sales of tangible personal property in Connecticut, including by means of the Internet, provided that at least $250,000 of gross receipts are received, and 200 or more retail sales to destinations in Connecticut are made, during the twelve-month period ending on the September 30 immediately preceding the taxable period for which the liability is determined.

As revealed by a recent review of the subject, more than thirty states now impose similar rules, and at least three states currently have bills in their legislature which would adopt a sales tax economic nexus standard of one kind or another. Each state takes is own approach to implementing economic nexus after the Wayfair decision. This means that sellers of goods (and in limited cases, services) that may have a limited physical footprint (say, only having physical operations in Connecticut) may nonetheless be required to collect and remit sales taxes in dozens of other jurisdictions around the country.  Please consider these new rules carefully as your business expands.

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Photo of Robert L. Day, III Robert L. Day, III

Robert is a member of the Tax and Employee Benefits Practice Group and practices primarily in the areas of federal, state and local taxation.  Robert regularly counsels a wide variety of taxpayers including individuals, manufacturers, insurers, media companies, financial institutions, hedge funds, and asset management funds.  He also has experience representing these clients in tax controversies before the Connecticut Department of Revenue Services and other taxing authorities.