Important sales tax updates

October 9, 2019

Please note, this message replaces and supersedes the communication issued on September 18, 2019 regarding the increased tax rate of 7.35% on meals and beverages.  The Connecticut Department of Revenue Services issued revised guidance as to what constitutes a “meal” under the new law.  Please refer to the italicized text, below, to identify amendments.

As the result of recent Connecticut tax legislation, certain sales tax changes are effective for sales made on or after October 1, 2019.

Meals and Beverages

The Connecticut sales tax rate on meals and beverages sold by an eating establishment, caterer, or grocery store will increase from 6.35% to 7.35%.  In accordance with guidance issued by the Connecticut Department of Revenue Services, this includes:

  • All food and beverages sold for human consumption at the seller’s location; and
  • Food products ordinarily sold in such form and portions that are ready for immediate consumption at or near the location of the seller.  This includes prepared foods, prepackaged foods, hot foods, and foods heated on the premises for the purchaser.

The definition of what constitutes a “meal” for the purposes of the tax is very broad. Please refer to Connecticut Department of Revenue Services Policy Statement 2002(2) for further information.

Beginning October 1, 2019, departments selling meals and beverages must collect Connecticut sales tax on such sales at the rate of 7.35%.  Consistent with current practice under Policy 2810 Sales & Use Tax, departments must report the sales to YSS on the monthly sales tax report, Form 2810 FR.01 Sales Tax Report.

Digital Goods

The sales of digital goods are now subject to Connecticut sales tax at the rate of 6.35%, where the billing address of the consumer or subscriber is in Connecticut.  Some examples of digital goods include: electronically accessed or transferred music; audiobooks; stock photographs or stock art work; clip art; greeting cards; magazines; and books.  Subscription sales of newspapers or magazines and college text books are not subject to Connecticut sales tax.  For further information on items subject to tax as “digital goods,” please refer to Connecticut Department of Revenue Services Special Notice 2019(8).

Beginning October 1, 2019, departments selling digital goods to consumers in Connecticut must collect Connecticut on such sales.  Consistent with current practice under Policy 2810 Sales & Use Tax, departments must report the sales to YSS on the monthly sales tax report, Form 2810 FR.01 Sales Tax Report.

Please contact the University Tax Department with any questions about the new requirements.