Hot Topics at OLR: Connecticut’s Sales and Use Tax

OLR Report 2011-R-0310 provides an overview of Connecticut's sales and use tax. It (1) describes major sales tax exemptions and (2) compares the tax rates, range of taxable services, and sales tax holidays in Connecticut and nearby states.

Sales tax exemptions include:
1. 7% on certain “luxury” motor vehicles, boats, jewelry, clothing, and footwear;

2. 4.5% on motor vehicles purchased by an active duty U. S. military member stationed in Connecticut;

3. 1% on computer and data processing services;

4. 15% on short-term stays in hotels and lodging houses; and

5. 9.35% on short-term car rentals.

The report covers what is included in the luxury items category.

An interesting table in the report highlights a number of services and whether those services are taxed in Connecticut or neighboring states.

For more information, including a table detailing state sales tax holidays across the country, read the whole report.