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Connecticut: Top Sales Tax Compliance Problems

  • Jul 11, 2014 | Gail Cole

 Don't be a criminal. Pay your Connecticut sales and use taxes.

Sales tax is a “trust tax.” Sellers are trusted by state and local governments to collect it on sales of taxable goods and services and then remit it to the proper tax authority. As a trust tax, sales tax faces a number of challenges.

The Connecticut Department of Revenue Services has enumerated several Connecticut sales tax challenges in its 2014 Sales Tax Collection Initiatives. These include:

  • Failure to register;
  • Inconsistent business registration information or inconsistent inter-agency enforcement;
  • Cash sales or shadow booking;
  • Non-reporting or under-reporting;
  • Lack of statewide automated point-of-sales (POS) infrastructure;
  • Out-of-state sales, on-line sales and other remote sales;
  • Low consumer use tax compliance;

Add to that the overall complexity inherent in sales and use tax compliance, and you’ve got a respectable list of problems.

The Connecticut Department of Revenue Services (DRS) collected more than 3.9 million dollars in sales and use tax FY 2012-13. That means a lot of Connecticut retailers are trustworthy. More than 95%, in fact.

The other 4+%

Approximately 1,300 audits conducted by the DRS each year uncover delinquent taxes, many of which arise from errors. DRS no longer renews sales tax permits for businesses with back taxes owed. If payment or an approved payment plan isn’t made in a timely manner, delinquent taxpayers are referred to the DRS Special Investigations Section (SIS).

SIS goes after criminals, which is what people who don’t pay taxes become. It made 34 arrests in FY 2012-13 and 62 arrests in FY 2011-12 for criminal violations related to sales tax.

Don’t mess with sales tax. Learn how an automated sales tax solution works.

photo credit: derekskey via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.