Understanding sales tax on clothing in Connecticut can get tricky, especially with exemptions, thresholds, and rules that vary by item type and price. Whether you’re a brick-and-mortar retailer, an online seller, or a business managing resale inventory, it’s crucial to understand how state tax laws apply to clothing, accessories, and footwear.
In this guide, we’ll break down everything you need to know about “Is Clothing Taxable in Connecticut?”, from exemptions to specific rules for discounted and used clothing.
Is Clothing Taxable in Connecticut?
In general, clothing and footwear under a certain dollar amount per item are exempt from sales tax in Connecticut. However, there are exceptions. Items of clothing or footwear priced over the threshold may be partially or fully taxable.
Additionally, certain items, such as formal wear, athletic gear, or protective clothing, may not qualify for the exemption and could be subject to sales tax regardless of price.
Connecticut Sales Tax Rate on Clothing
Connecticut’s statewide sales tax rate is 6.35%, which applies uniformly across the state, as there are no additional local (city or county) sales taxes.
Clothing and footwear are generally subject to the 6.35% sales tax. However, during the state’s annual Sales Tax-Free Week, typically held in August, most individual items of clothing and footwear priced under $100 are exempt from sales tax. It’s important to note that certain items, such as athletic or protective gear, may remain taxable even during this exemption period.
Additionally, Connecticut imposes a luxury tax of 7.75% on individual clothing items priced over $1,000, including handbags, luggage, umbrellas, wallets, and watches.
For detailed information on taxable and exempt items, you can refer to the Connecticut Department of Revenue Services.
What are Connecticut’s Exemptions and Special Cases for Clothing?
In Connecticut, clothing and footwear are generally subject to the state’s 6.35% sales tax. However, there are specific exemptions and special cases to be aware of:
Tax-Free Week
Connecticut offers an annual Sales Tax-Free Week, typically in August, during which most clothing and footwear items priced under $100 per item are exempt from sales tax. This exemption applies to each individual item, not the total purchase amount.
Exemptions
During the tax-free week, various items are exempt, including:
- Hats, gloves, and earmuffs
- Jeans, dresses, shorts, and shirts
- Socks, sneakers, and slippers
- Rented uniforms, work clothes, and formal wear
- Undergarments, robes, and swimsuits.
Exceptions
Certain items remain taxable, even during the tax-free week:
- Clothing and footwear priced over $100 per item
- Specialized clothing, such as athletic or protective gear
- Accessories, including handbags, jewelry, and watches.
Consumers and retailers must be aware of these exemptions and exceptions to ensure compliance with Connecticut’s sales tax regulations.
Tax on Clothing in Connecticut: Local vs. State
Here’s how statewide vs. local sales tax works in Connecticut for clothing:
| Type | Applies to Clothing? | Details |
|---|---|---|
| State Sales Tax | Yes | Connecticut has a statewide 6.35% Connecticut sales tax on clothing, with certain exemptions. |
| Local Sales Tax | No | Connecticut does not allow cities or counties to impose additional local sales taxes. |
In Connecticut clothing sales tax, clothing is taxed at the state level only. There are no additional city or county sales taxes, simplifying business and consumer compliance.
Sales Tax Registration Requirements for Clothing Sellers in Connecticut
To legally sell clothing in Connecticut, whether through a physical storefront or online, you must register for a Sales and Use Tax Permit with the Connecticut Department of Revenue Services (DRS).
- Who Needs to Register
- In-state retailers with a physical presence
- Out-of-state and online sellers meeting the state’s economic nexus thresholds of $100,000 in gross sales and 200 transactions
- Required Information
- Business name and address
- Federal Employer Identification Number (FEIN)
- Business structure details (e.g., sole proprietorship, LLC)
- Description of products or services offered
- Anticipated start date of sales
- Registration Fee
- A non-refundable $100 fee is required, payable via electronic check or credit card.
For detailed guidance and to initiate the registration process, visit the Connecticut DRS Business Registration page.
Sales Tax Filing Requirements for Clothing Businesses
In Connecticut, clothing retailers, operating physical stores or online, must adhere to specific sales tax filing requirements based on their sales volume. If you’re asking, is clothing taxable in Connecticut?, it’s not just about knowing the rates. Accurate and timely filing of your returns is equally important.
Here’s an overview of the filing frequencies, due dates, and penalties for late filing:
| Filing Frequency | Due Date |
|---|---|
| Monthly | Last day of the month following the reporting period (e.g., April sales due by May 31) |
| Quarterly | Last day of the month following the quarter’s end (e.g., Q1 ends March 31, due by April 30) |
| Annually | January 31 of the following year |
Note: If the due date falls on a weekend or holiday, the deadline is extended to the next business day.
Penalties for Late Filing or Payment
- Late Filing Penalty: 15% of the tax due or $50, whichever is greater.
- Interest on Late Payments: 1% per month or fraction thereof, accruing from the original due date until payment is made.
Zero Returns Requirement
Even if no sales tax was collected during a reporting period, businesses are still required to file a “zero return” to maintain compliance.
Filing Method
All sales tax returns must be filed electronically through the myconneCT portal.
Implications for Remote Sellers and E-commerce Clothing Sales
Here’s how Connecticut handles physical nexus and sales tax obligations for remote and e-commerce clothing sellers:
Economic Nexus Threshold
A remote seller must register to collect Connecticut sales tax if it:
- Has gross receipts exceeding $100,000 from sales into the state and
- Conducts 200 or more retail sales in Connecticut during the previous 12-month period.
This applies to all taxable sales, including clothing items that are not exempt (e.g., luxury apparel or items priced above the exemption limit).
Taxability of Remote Clothing Sales
Remote sales of clothing are taxable in Connecticut under the same rules as in-state sales. This means that clothing and footwear sold online to Connecticut customers are generally subject to the statewide 6.35% sales tax, and luxury items over $1,000 are taxed at 7.75%. The tax applies to both direct-to-consumer e-commerce businesses and those selling through online marketplaces.
Sales Tax Registration Requirements for E-commerce Sellers
Remote or online clothing businesses meeting the nexus threshold must:
- Register with the Connecticut Department of Revenue Services (DRS) through the myconneCT portal.
- Collect and remit sales tax on taxable clothing items sold to customers in the state.
- File returns as required (monthly, quarterly, or annually) based on the tax liability.
Marketplace Facilitator Rules
If selling through platforms like Amazon, Etsy, or eBay, Connecticut requires marketplace facilitators to collect and remit sales tax on behalf of third-party sellers. However, individual sellers must:
- Ensure the platform is compliant.
- Still register if they sell outside of marketplaces (e.g., via their own website).
Bottom Line
If you’re an out-of-state clothing retailer making regular sales in to Connecticut, it’s crucial to:
- Monitor your sales volume and transaction count.
- Register and comply if you meet economic nexus thresholds.
- Stay updated on which clothing items are taxable vs. exempt.
Failure to register and collect tax when required can lead to penalties and interest.
Sales Tax Compliance Challenges for Clothing Businesses in Connecticut
Here are common sales tax compliance challenges faced by clothing businesses in Connecticut and largely with US sales tax compliance:
- Tracking Exemptions Based on Price: Connecticut exempts most clothing and footwear priced under $100 per item. Businesses must carefully track and apply this threshold at the item level, not the total invoice, which can be tricky during sales or bundled purchases.
- Identifying Taxable Items: Not all clothing is exempt; specialized items like protective gear, sports uniforms, and accessories (e.g., handbags, jewelry) may be taxable. Misclassifying items can lead to incorrect tax collection or audits.
- Managing Remote and E-commerce Sales: Online clothing businesses must comply with economic nexus rules. Even without a physical store in Connecticut, high sales volume or order count may trigger the need to register, collect, and remit sales tax.
- Staying Updated on Tax Holidays: Connecticut state clothing sales tax occasionally offers sales tax holidays (like the one in August for back-to-school shopping). Clothing businesses must adjust their systems temporarily to reflect exemptions during that time, which can be confusing.
- Marketplace Facilitator Rules: For sellers using platforms like Amazon or eBay, marketplace facilitators collect and remit tax. Still, businesses need to ensure compliance for direct sales and confirm that platforms are handling tax correctly.
These challenges highlight the importance of proper tax classification, accurate system setup, and timely filing to stay compliant in Connecticut. Failure to comply with these requirements could trigger a sales tax audit, so it’s important to stay compliant.
Simplifying Connecticut Sales Tax with Automation
Handling sales tax for clothing in Connecticut can be tricky, with exemptions to consider, remote seller rules, and the need to stay current on the state tax rate. Commenda is a sales tax platform that streamlines this entire process through automation.
It accurately calculates the right sales tax on every transaction, applies any applicable exemptions, and monitors your sales activity to identify when you meet Connecticut’s economic nexus threshold, prompting timely registration and compliance.
Commenda also automates filings and payments and generates audit-ready reports, helping avoid errors and late penalties.
Stay compliant without the headache. Book a demo to see how Commenda makes Maine sales tax management easy.
FAQs
Q. Are clothing accessories taxable in Connecticut?
Yes, most accessories like handbags, jewelry, and hair items are taxable under Connecticut sales tax clothing.
Q. Is there a threshold for taxable clothing sales in Connecticut?
Yes, clothing and footwear priced under $100 per item are generally exempt. Items over $100 are taxable on the full amount under Connecticut tax on clothes.
Q. How do Connecticut sales tax rules apply to children’s clothing?
Children’s clothing follows the same rules as adult clothing, items under $100 are typically exempt.
Q. Are there specific rules for clothing sold at a discount in Connecticut?
The sales price after the discount determines taxability. The item is usually exempt if the final price is under $100 for sales tax clothing in Connecticut.
Q. Does Connecticut exempt clothing purchased for resale from sales tax?
Yes, resale purchases are exempt if the buyer presents a valid resale certificate.
Q. How do Connecticut sales tax exemptions apply to used clothing?
Used clothing is treated the same as new. It is generally exempt from tax if it’s sold for under $100 for clothing sales tax in Connecticut.
