Understanding sales tax can be complex, especially when it comes to exemptions. In Connecticut, like many states, certain sales are legally exempt from sales and use taxes. These exemptions are outlined in the Connecticut General Statutes, specifically Chapter 219, Sales and Use Taxes, and Conn. Gen. Stat. § 12-412. This guide, provided by vcdstool.com, your trusted resource for automotive insights and beyond, breaks down some key sales tax exemptions in Connecticut, offering clarity for businesses and individuals alike. Think of this guide as your essential small tool for understanding Connecticut tax regulations, helping you avoid unnecessary costs and potential tickets for non-compliance by ensuring you’re accurately applying for and utilizing available exemptions. While we specialize in automotive tools and diagnostics, understanding the broader business landscape, including tax implications, is crucial for our audience. This information serves as a “cat scan” of the exemptions landscape, providing a detailed look at what’s available.
Key Sales Tax Exemptions in Connecticut
Connecticut offers a wide range of sales tax exemptions, designed to support various sectors and needs. Below are some of the most notable exemptions, categorized for easy understanding. Remember, some exemptions require specific certificates to be presented at the time of purchase. Always refer to the official Connecticut General Statutes for a complete and up-to-date list.
Exemptions Supporting Essential Industries
Agricultural Production: To support local farming and agricultural businesses, Connecticut provides an exemption for items sold exclusively for use in agricultural production. Farmers must possess a valid Farmer Tax Exemption Permit, issued by the Department of Revenue Services (DRS), and provide a copy to the seller. This exemption helps reduce the financial burden on agricultural businesses, ensuring the continued growth of this vital sector.
Biotechnology Industry: Recognizing the importance of innovation and technological advancement, Connecticut offers exemptions for machinery, equipment, tools, materials, supplies, and fuel used directly in the biotechnology industry. Purchasers in this sector must complete CERT-129, Exemption for Items Used Directly in the Biotechnology Industry, to claim this exemption. This incentive encourages the growth and development of biotechnology companies within the state.
Commercial Fishing Industry: Similar to agriculture, commercial fishing is a crucial industry in Connecticut. Exemptions are available for:
- Materials, rope, fishing nets, tools, and fuel used directly in commercial fishing.
- Commercial fishing vessels and machinery or equipment for use on these vessels.
Purchasers must hold a current Commercial Fisherman Exemption Permit from DRS to qualify. These exemptions aim to alleviate the operational costs for commercial fishermen, supporting the sustainability of the industry.
Manufacturing, Fabricating, and Processing: Connecticut actively supports its manufacturing sector with several significant sales tax exemptions:
- Machinery: Exemptions cover machinery used directly in manufacturing, including repair, replacement, component, and enhancement parts. CERT-101, Machinery, Component Parts, and Replacement and Repair Parts of Machinery Used Directly in a Manufacturing Process, is required.
- Component Parts: Component parts used in the assembly of manufacturing machinery are also exempt, requiring CERT-101.
- Materials, Tools, and Fuel: Materials, tools, and fuel used in the manufacturing process are exempt with CERT-100, Materials, Tools, and Fuel.
- Partial Exemption: A partial exemption exists for materials, tools, fuels, machinery, and equipment used in manufacturing (Conn. Gen. Stat. § 12‑412i). Use CERT-108, Partial Exemption of Materials, Tools, and Fuels, or CERT-109, Partial Exemption for Machinery, Equipment, or Repair and Replacement Parts.
- Calibration Services: Certain calibration services for manufacturing machinery, equipment, or instrumentation are also exempt, ensuring the accuracy and efficiency of manufacturing processes.
These comprehensive exemptions are designed to make Connecticut a more attractive location for manufacturing businesses, fostering job creation and economic growth.
Audio or Video Production and Broadcasting: To support the media and entertainment industry, exemptions are provided for:
- Filmed and taped television and radio programs and materials becoming part of broadcast tapes or films, including those for medical or surgical training.
- Motion picture or video production equipment and sound recording equipment for commercial entertainment, advertising, or educational purposes.
- Certain equipment used by television and radio stations.
These exemptions help reduce the cost of content creation and broadcasting, encouraging a vibrant media landscape in Connecticut.
Printing Equipment and Materials: The printing industry also benefits from sales tax exemptions:
- Machinery, equipment, tools, materials, and supplies used in commercial printing.
- Machinery, equipment, tools, materials, and supplies for typesetting, color separation, finished copy, or similar products.
Purchasers must complete CERT-120, Machinery, Equipment, Tools, Materials, and Supplies Used in the Production of Printed Material or in Prepress Production, to claim these exemptions, which support the competitiveness of Connecticut’s printing businesses.
Exemptions for Health and Wellbeing
Medical Goods and Equipment: Connecticut provides extensive exemptions for medical goods and equipment, recognizing the importance of accessible healthcare:
- Prescription Medicines: Prescription medicines, syringes, and needles are exempt.
- Nonprescription Drugs and Medicines: A wide range of nonprescription drugs and medicines, including vitamins, supplements, cold and allergy remedies, pain relievers, and more, are exempt. This broad exemption makes essential health products more affordable.
- Oxygen, Blood, and Blood Plasma: These vital medical supplies are exempt when for medical use in humans or animals.
- Artificial Devices: Custom-designed artificial devices, such as braces and supports, and their repair and replacement parts are exempt.
- Artificial Limbs and Equipment: Artificial limbs, eyes, and other equipment worn as substitutes for body parts, along with repair services, are exempt.
- Mobility Aids: Hearing aids, canes, crutches, walkers, and wheelchairs, including repair services, are exempt, promoting mobility and independence for those who need it.
- Vital Life Support Equipment: Equipment like oxygen supply systems, kidney dialysis machines, and apnea monitors, and their repair parts, are exempt.
- Custom Wigs and Hairpieces: For individuals with medically diagnosed permanent hair loss, custom wigs or hairpieces are exempt.
- Support Hose: Specially designed support hose for medical needs are exempt.
- Reading Aids for Visually Impaired: Closed-circuit television equipment for visually impaired individuals and related repairs are exempt.
- Diabetic Supplies: Essential diabetic supplies like test strips, lancets, and glucose monitoring equipment are exempt.
- Telephone Equipment for Disabled Persons: Telephone equipment designed for deaf or blind individuals is exempt.
- Incontinence Pads: Disposable pads for incontinence (adult diapers) are exempt.
- Stairway Chairlifts: Inclined stairway chairlifts for people with disabilities, including parts and repair services, are exempt.
- Diapers: Disposable or reusable diapers are exempt, recognizing the needs of families with young children or individuals requiring these products.
- Menstrual Products: Menstrual products are also exempt, addressing affordability and accessibility.
- Breast Pumps and Supplies: Breast pumps and related collection and storage supplies, when sold to individuals for home use, along with repair services, are exempt, supporting breastfeeding mothers.
These extensive medical exemptions reflect Connecticut’s commitment to ensuring healthcare affordability and accessibility for its residents.
Food Products for Human Consumption: Basic food products intended for human consumption are generally exempt from sales tax. However, there are exceptions:
- Exclusions: The exemption does not apply to meals, carbonated beverages, candy, and alcoholic beverages, except in specific situations like schools or healthcare facilities.
- Vending Machines: Food products, including meals, sold through coin-operated vending machines are exempt.
- Meals for Seniors and Homebound: Meals delivered to individuals over 60, those with disabilities, or the homebound are exempt.
- SNAP Purchases: Purchases made with Supplemental Nutrition Assistance Program (SNAP) benefits are exempt, supporting food security for low-income individuals.
- Vegetable Seeds: Vegetable seeds for planting to produce food are exempt, encouraging home gardening and local food production.
This exemption aims to make basic groceries more affordable for all residents.
Exemptions for Specific Goods and Services
Motor Vehicles, Aircraft, and Vessels: Connecticut provides various exemptions related to vehicles:
- Flyable Aircraft: Aircraft sold by Connecticut manufacturers to interstate or foreign carriers or nonresidents for exclusive use outside Connecticut are exempt. Affidavit SUT-16a-3 is required.
- Large Aircraft: Aircraft with a maximum takeoff weight of 6,000 pounds or more are exempt.
- Aircraft Repair Parts and Services: Repair or replacement parts and repair services exclusively for aircraft are exempt. CERT-110, Aircraft Repair Services – Aircraft Repair and Replacement Parts, is required.
- Nonresident Vehicle Purchases: Motor vehicles purchased by nonresidents and not registered in Connecticut are exempt. CERT-125, Sales and Use Tax Exemption for a Motor Vehicle Purchased by a Nonresident of Connecticut, is required.
- Commercial Trucks: Commercial trucks, tractors, semitrailers, and related combinations exceeding 26,000 pounds GVWR, or used exclusively for interstate freight, are exempt.
- Special Equipment for Disabled Persons: Special equipment installed in motor vehicles for use by individuals with disabilities is exempt. When vehicles with such equipment are resold for use by another disabled person, tax applies only to the vehicle’s price excluding the special equipment value.
- Commercial Fishing Vessels: Commercial fishing vessels and related machinery are exempt (also listed under Commercial Fishing).
- Property Tax on Leased Vehicles: Property tax payments separately stated on motor vehicle lease bills are exempt.
- Marine Vessel Brokerage Services: Services related to marine vessel brokerage are exempt.
These exemptions cater to various transportation sectors and needs within Connecticut.
Fuel Exemptions: Certain types of fuel are exempt from sales tax:
- Aviation Fuel.
- Diesel Fuel for Large Generators: Diesel fuel used exclusively in portable power system generators larger than 150 kilowatts.
- Marine Fuel: Marine fuel (except for dyed diesel fuel sold by licensed marine dock owners, which is taxed at a reduced rate).
- Motor Vehicle Fuel.
- Heating Fuel: Heating fuel for residential dwellings, agricultural production facilities, manufacturing facilities (where at least 75% of fuel use is for production), is exempt. CERT-115, Exempt Purchases of Gas, Electricity, and Heating Fuel is required for certain commercial/industrial uses.
These exemptions help manage energy costs for various sectors and residents.
Other Notable Exemptions:
- Bicycle Helmets: Encouraging safety, bicycle helmets are exempt.
- Child Car Seats: Child car seats are exempt, promoting child passenger safety.
- College Textbooks: Sales of college textbooks to enrolled students with valid ID cards are exempt, easing the financial burden of higher education.
- Current U.S. and Connecticut Flags: Displaying patriotism, current flags are exempt.
- Firearm Safety Devices: Safes, lock boxes, and trigger locks designed to enhance firearm safety are exempt.
- Magazines by Subscription: Magazine subscriptions, including puzzle-only publications, are exempt.
- Newspapers: Keeping citizens informed, newspapers are exempt.
- Personal Property for Burial or Cremation: Personal property for burial or cremation, up to $2,500 per funeral, and caskets are exempt, addressing end-of-life costs.
- Pollution Control Equipment: Equipment for air and water pollution control facilities approved by the Department of Energy and Environmental Protection is exempt. CERT-117 or CERT-124 are required.
- Printed Material for Out-of-State Use: Printed material manufactured in Connecticut for use outside the state within 30 days is exempt, with a Printed Material Certificate required.
- Rare or Antique Coins: Certain rare or antique coins are exempt.
- Sales to Telecommunications Companies: Equipment sales to telecommunications and cable TV companies for high-speed data and broadband services are exempt, promoting infrastructure development.
- Shoe Repair Services: Maintaining footwear, shoe repair services are exempt.
- Services for Disabled Persons at Residence: Landscaping, window cleaning, and maintenance services at the residence of individuals receiving total disability benefits are exempt. CERT-121 is required.
- Ice Storage Systems for Cooling: Ice storage systems for cooling are exempt. CERT-140 is required.
- Solar and Geothermal Systems: Solar energy electricity generating systems, solar water/space heating systems, and geothermal resource systems are exempt. CERT-140 is required.
- Utility Exemptions:
- Gas or electricity for residential use and for qualifying agricultural, fabrication, or manufacturing uses. CERT-115 is required for commercial/industrial uses.
- The first $150 of monthly electric charges for businesses are exempt.
- Water, steam, and telegraph services delivered via mains, lines, pipes, or bottles are exempt.
- Vending Machine Sales (Low Value): Sales of items costing 50 cents or less and food products in vending machines are exempt.
Conclusion
Connecticut’s sales tax exemptions are designed to support various sectors, promote public health and safety, and ease the financial burden on residents and businesses. While this guide provides an overview of key exemptions, it is not exhaustive. For detailed information and to ensure compliance, always consult the full Connecticut General Statutes and official DRS publications. Understanding these exemptions is a valuable small tool in navigating the Connecticut business and personal finance landscape. Remember to utilize the correct exemption certificates when applicable to ensure proper tax compliance and maximize available benefits.
