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Connecticut Tax Nexus Generally, a business has nexus in Connecticut when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives.
However, the tax on computer and data processing services is 1%. Examples of taxable tangible personal property include equipment, machines, furniture, appliances, computers, computer software, office supplies, and books.
Nexus means a connection or a link... A business with nexus is required to register with DRS and pay (or collect from its customers) Connecticut taxes. An individual with nexus may be required to pay Connecticut personal income tax.
Nexus TriggersHaving a physical location within the state. Having employees work within the state or regularly travel to the state to perform business functions. Holding property (including intangible property and inventory) in the state. Delivering tangible goods to that state's residents (even if by common carrier)
Recently, Connecticut enacted legislation providing that having an employee telecommuting from Connecticut will not create a taxable presence (i.e., nexus) in the state for the employer.
Nexus is the amount of presence a business has in a certain location (e.g., state or city). You might have nexus in a state if you sell goods to a customer in that state. Sales tax is a pass-through tax. Businesses in specific localities or states must collect sales tax from customers at the point of sale.
Computer and data processing services are subject to tax in Connecticut if the benefit of the services is received in this state. Canned or prewritten software, as defined in Conn.
Generally speaking, access to informational databases are non-taxable in most states either because they are not included in the definition of tangible personal property, or they are not specially identified as taxable services in presumably non-taxable service states, or in a few cases they are specially made exempt
The majority of states which have addressed the issue and have concluded that software (at least unbundled software) is not tangible personal property for ad valorem tax purposes and therefore is generally not taxable.
Business Use: Electronically accessed or transferred canned or prewritten software, and any additional content related to such software, that is sold to a business for use by the business remains taxable at the 1% rate as computer and data processing services.