Business owners in Connecticut have a lot of responsibilities. Dealing with sales tax is one of them. Connecticut is, after all, of the many states that require sales tax be collected, reported and paid on all taxable products and services.
Earlier this year, the U.S. Supreme Court made a decision that will affect those who sell products online. Online retailers are now required to pay sales taxes to the states in which they do business, whether or not they have a physical presence in those states. Connecticut was ahead of the game on this, as the governor had already signed a bill into law requiring online business owners who sell more than $250,000 in products or services to pay sales tax. The Connecticut-specific sales tax law takes effect Dec. 1.
Connecticut residents who make a lot of big purchases throughout the year may wonder if they can use that to their advantage come tax time. The answer is, maybe. It may be possible to deduct sales tax and reduce the amount of taxes one owes. How does that work?
Business owners -- whether they are based in Connecticut or elsewhere -- have a lot of tax concerns compared to the typical person. Not only do they have to worry about filing their own income and business taxes, they also have to worry about making sure they collect and pay appropriate sales tax. This week's column will be a quick overview of sales tax basics.
Taxes, taxes, taxes -- they are a part of life that no one can escape. Connecticut residents who are business owners have to pay a slew of taxes, including sales tax on the items that they sell. How exactly does sales tax filing work?
Just about anything can be bought online these days and usually at a cheaper price than what is offered in standard brick-and-mortar establishments. Did you know, though, that some of your online purchases may be subject to Connecticut sales tax even if the seller does not charge you sales tax at the time of purchase? This may not be true for everything you purchase online, but it is for any tobacco products you may buy.
When tax season rolls around, it can be tempting to be a little dishonest in the hopes of avoiding paying an arm and a leg in taxes. However, lying on tax returns or filing bogus returns are tax crimes. Those in Connecticut and elsewhere who are caught doing either of these things could face some serious penalties.
Amazon is one of the biggest online retailers in the world. Millions of people use the site to sell their own goods, and Amazon itself offers popular products at relatively low prices. For a long time, the company got away with not charging sales tax. In 2013, the state of Connecticut said no more. While the company itself may charge Connecticut residents sales tax, personal sellers have not been too great about it, leaving them and Amazon on the hook for quite a bit in unpaid taxes.
You are a business owner in Connecticut. You are doing the best you can to keep your company afloat all while following the state and federal rules that govern certain aspects of your business. Tax season rolls around and it is not until then that you realize you made a big sales tax mistake -- either on your own or because you received an audit notification. What can you do?