Connecticut Sales Tax Guide for SaaS and E-Commerce Businesses

Connecticut imposes a Sales Tax on most goods and services, including SaaS and digital products. While the general rate is 6.35%, business-to-business (B2B) SaaS benefits from a reduced 1% rate.

This guide explains Connecticut’s SaaS and e-commerce taxability, nexus thresholds, filing rules, and how to register.

Last updated: September 2025

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Quick Reference: Connecticut Sales & Use Tax (2025)

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SaaS & Software Taxability in Connecticut

Connecticut explicitly taxes computer and data processing services, which include SaaS and hosted software.

What This Means for SaaS

• B2B SaaS (computer/data processing services): 1% tax
• Consumer SaaS: 6.35% tax
• Custom software or professional services: potentially exempt if separately itemized as nontaxable services.
• Bundled offerings: the taxable SaaS portion remains subject to tax; if not separated, the entire bundle may be taxed.

CT DRS Special Notice 2019(8) expanded digital goods and clarified SaaS taxability.

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E-Commerce & Digital Product Sales

For e-commerce sellers, Connecticut’s rules are straightforward:

• Tangible goods (clothing, electronics, furniture, etc.) are taxed at 6.35%.
• Digital goods (e-books, downloads, media) are taxable at 6.35%.
• Marketplace facilitator rules apply: Amazon, Etsy, Shopify, and other platforms must collect and remit sales tax on behalf of third-party sellers.

Remote e-commerce sellers meeting the $100,000 and 200 transactions threshold must register and collect tax, even without physical presence.

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Who Must Collect Connecticut Sales Tax?

You must register if you meet any of these:

• Physical nexus: Offices, employees, inventory, or contractors in Connecticut.
• Economic nexus: More than $100,000 in sales AND 200 transactions in a year.
• Marketplace facilitator rules: Platforms handle tax collection, but you must still register if you also make direct sales.

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What’s Taxable in Connecticut?

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Filing & Due Dates

• Filing frequency: Assigned by CT-DRS based on annual collections:
  • Monthly — over $4,000
  • Quarterly — $1,001–$4,000
  • Annually — $1,000 or less
• Due date: Returns due by the last day of the month following the reporting period.

Example: April sales → file and pay by May 31.

File via myconneCT.

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Penalties & Interest

• Interest: 1% per month (or fraction) on late or amended returns, until payment is made.
• Late payment penalty: 15% of tax due or $50, whichever is greater.
• Failure to pay electronically:
  • First offense — 10% of tax due (max $2,500)
  • Second offense — 10% of tax due (max $10,000)
  • Third & subsequent offenses — 10% of tax due (no cap)

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How to Register for Connecticut Sales Tax

1. Determine nexus (economic or physical).
2. Register online via myconneCT.
3. Collect the correct rate:
   • 1% for B2B SaaS
   • 6.35% for consumer SaaS, e-commerce goods, and digital products
4. File returns through myconneCT.
5. Pay on time to avoid penalties and interest.

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FAQs: Connecticut Sales Tax

Is SaaS taxable in Connecticut?
Yes. SaaS is taxable at 1% for B2B use and 6.35% for consumer use.

Are e-commerce goods taxable?
Yes. Tangible goods and digital downloads are taxed at 6.35%.

What is Connecticut’s economic nexus threshold?
Both thresholds must be met: $100,000 in sales and 200 transactions.

Does Connecticut have local sales tax?
No. Only the statewide rate applies.

When are returns due?
By the last day of the month following the reporting period.

Do I need to register if I only sell via Amazon or Shopify?
Marketplaces must collect tax on your behalf, but you may still need to register if you also make direct sales.

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Official Connecticut Resources

• Connecticut DRS — Sales & Use Tax Info
• myconneCT — Register & File Online
• Special Notice 2019(8): Digital Goods & SaaS
• Remote Sellers & Economic Nexus Guidance

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