Connecticut lowers small seller exception for remote sellers
Like other states that require remote sellers to collect and remit sales tax, Connecticut allows an exception for small sellers. As of July 1, 2019, the small seller threshold for both the state’s economic nexus and click-through nexus laws are lowered.
New threshold for economic nexus
From December 1, 2018, through June 30, 2019, the threshold for economic nexus was at least $250,000 in gross receipts in the state and at least 200 separate retail sales and systematic solicitation in the state during the 12-month period ending on the immediately preceding September 30. The threshold was based on retail sales of tangible personal property only.
As of July 1, 2019, a remote seller triggers economic nexus if, in the preceding 12-month period ending on the immediately preceding September 30, it makes retail sales of tangible personal property or services into Connecticut and has:
- Gross receipts of $100,000 or more in Connecticut; and
- At least 200 Connecticut retail sales.
New threshold for click-through nexus
Connecticut enforces click-through nexus in addition to economic nexus, and lawmakers have also changed the small seller threshold for click-through nexus.
Through June 30, 2019, click-nexus is established in Connecticut when a remote seller has an agreement to reward a person(s) in the state for directly or indirectly referring potential purchasers of goods or services through an internet link, website, or otherwise, provided the cumulative gross receipts from sales from such referrals are in excess of $250,000 during the preceding four quarterly periods. Effective July 1, 2019, the sales threshold changes to $100,000 during the preceding four quarterly periods.
The changes to economic nexus and click-through nexus are the result of the enactment of House Bill 7424.
Connecticut isn’t the only state to change the small seller exception for remote sellers. Learn more about state economic nexus laws.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
Stay up to date
Sign up for our free newsletter and stay up to date with the latest tax news.