A recent National Retail Federation survey found that the average Thanksgiving weekend shopper spent 43.7% of his or her total spending online ($177.67), up from 40.7% last year. But is the average shopper paying sales taxes on those purchases?
As Joseph Henchman from the Tax Foundation points out, the answer depends on what state the shopper is in and whether the online retailer has “nexus” (or physical presence) in the state. And in some states, including Connecticut, certain online retailers with affiliates must collect sales taxes even if they have no property or employees in the state. But even if the online retailer does not collect state sales tax, the purchase is not necessarily tax-free. In many cases, taxpayers owe use tax on those purchases.
That’s the message Connecticut’s Department of Revenue Services (DRS) is trying to spread. As online shopping continues to grow in popularity, DRS is reminding taxpayers that they owe use tax on online purchases if they were not charged sales tax at the point of sale. The use tax (6.35% for most taxable goods and services) is due by April 15, along with the personal income tax, for purchases made during the preceding calendar year.
