The Connecticut Department of Revenue Services announced that retailers making sales in Connecticut of tangible personal property to the public are required to collect a $0.10 fee per single-use plastic checkout bag for sales and use and excise tax purposes.
The store must indicate the number of single-use plastic checkout bags provided, and the total amount of the fee charged on any transaction receipt provided to taxpayers.
The announcement includes a Q&A:
What is the “Plastic Bag Fee”?
The Plastic Bag Fee is a statewide fee of $0.10 per “single-use checkout bag” that must be collected by retailers making sales in Connecticut of tangible personal property to the public.
Who is required to collect the Plastic Bag Fee?
All “stores” are required to collect the Plastic Bag Fee. The new law defines a “store” as any retailer who is registered for Connecticut sales tax that sells goods directly to the public and maintains a retail location in Connecticut that provides plastic bags to its customers.
When must stores start collecting the Plastic Bag Fee?
Stores must start collecting the Plastic Bag Fee on August 1, 2019.
What is a “single-use checkout bag”?
A “single-use checkout bag” means a plastic bag with a thickness of less than four mils that is provided by a store to a customer at the point of sale.
What is not considered to be a “single-use checkout bag”?
A “single-use checkout bag” does not include:
• Paper bags;
• Reusable (four mils or thicker) plastic bags;
• Thin plastic bags on a continuous, perforated roll that are used to contain meat, seafood, loose produce or other unwrapped food items;
• Newspaper bags; or
• Laundry or dry cleaning bags.
What if stores already charge a fee for their bags?
If a store charges its own fee for a plastic bag, the store’s fee would have to be in addition to the state Plastic Bag Fee. Any store charges for a bag are subject to sales tax.
What if a store uses donated plastic bags?
The imposition of the Plastic Bag Fee is based on the provision of a plastic bag to a customer, not on a store’s purchase of plastic bags. As a result, even the use of donated bags would be subject to the Plastic Bag Fee if the donated bags are provided to customers as part of a sales transaction.
Are plastic bags provided by restaurants for take-out meals or to contain leftover meals being taken with customers considered single-use plastic checkout bags?
Yes. Restaurants must collect the Plastic Bag Fee on each single-use plastic checkout bag that is provided to customers to take meals off the premises.
What if a store uses plastic bags for reasons other than sales transactions?
The Plastic Bag Fee does not need to be collected if there is no sale to a customer. As a result, plastic bags used by a store for other purposes, such as providing promotional materials or offering free items unrelated to a sales transaction, are not subject to the Plastic Bag Fee.
What must a store include on the transaction receipts it provides to customers?
The store must indicate the number of single-use plastic checkout bags provided and the total amount of the fee charged on any transaction receipt provided to a customer.
Is the Plastic Bag Fee included in gross receipts for purposes of the sales tax?
No. Sales tax is not imposed on the single-use plastic checkout bag fee. However, any municipal charges for bags are subject to sales tax. See Question 13, below.
How does a store report the single-use plastic checkout bag fees it collected?
Each store must report all Plastic Bag Fees it collects to DRS with its sales tax return under Conn. Gen. Stat. § 12-414, and remit such fees at the same time and in the same form and manner required under that section.
May municipalities pass their own ordinances regarding checkout bags?
Yes. Municipalities may enact or enforce an ordinance concerning single-use plastic checkout bags, provided the ordinance is as restrictive or more restrictive as the state legislation. In addition, municipalities may enact or enforce an ordinance concerning paper checkout bags, including, but not limited to, enabling each store to charge a fee for any such bag distributed to a customer. Any municipal charges for a bag are subject to sales tax. If a municipality were to charge its own plastic bag fee, it would be in addition to the state plastic bag fee.
Is there a ban on plastic bags?
As of July 1, 2021, single-use plastic checkout bags are scheduled to be banned in the State of Connecticut. Municipalities may enact bans of plastic bags prior to that date.
Major grocers like Stop & Shop sell reusable tote bags as part of efforts to remove plastics from the waste stream; Stop & Shop says it’s removed 1 billion plastic bags since 2011.
Many local restaurants have given up plastic straws in favor of paper or metal ones, and Mystic Seaport Museum recently announced an environmental stewardship campaign to use plant-based straws, paper shopping bags and to-go containers, and strands of pasta instead of plastic stirrers.
On July 1, 2019, more remote sellers are required to collect and remit sales tax on Connecticut sales. Admissions taxes to a variety of events venues are lower, and they’ll drop further starting July 1, 2020.
The per-ride fee imposed on transportation network companies like Lyft and Uber is higher. The real estate conveyance tax no longer applies to certain sales.
Retailers in Connecticut don’t have to deal with a tax on sweetened beverages, which was proposed but didn’t make the final cut. However, they will have to collect a single-use plastic bag fee come August 1, 2019.
Additional new taxes:
Starting October 1, 2019, taxes on digital goods and services as well on taxes on prepared meals will increase in Connecticut.
There will be higher taxes on alcoholic beverages — except beer — and lower taxes on beer sold to-go by craft breweries.
Vaping products will be subject to tax for the first time, and short-term home rental facilitators like Airbnb and HomeAway will be required to collect and remit occupancy taxes on behalf of hosts.
More specifics are provided below.
New requirements for remote sellers. As of July 1, 2019, remote sellers with $100,000 in sales and at least 200 transactions in a 12-month period must collect and remit Connecticut sales tax. Prior to that date, the threshold was at least $250,000 in sales and 200 or more retail sales and systematic solicitation in the state in a 12-month period.
Lower tax on admissions. Admissions to many events venues in the Constitution State were taxed at 10 percent prior to July 1, 2019; they’re now taxed at either 7.5 percent or 5 percent (depending on the venue). The 7.5 percent admissions tax rate will drop to 5 percent starting July 1, 2020, while admissions taxed at 5 percent will become exempt.
Higher tax on Lyft and Uber. The per-ride fee on transportation network companies increased from 25 cents to 30 cents on July 1, 2019.
Tax break for crumbling foundations. Sales of principal residences with crumbling foundations are exempt from the real estate conveyance tax as of July 1, 2019.
Higher tax rate on digital goods and services. Categorized as computer and data processing services, digital goods and services are currently subject to a 1 percent sales and use tax rate. As of October 1, 2019, the full Connecticut state sales tax rate of 6.35 percent will apply.
Higher taxes on prepared meals and beverages. Meals and beverages sold by a caterer, eating establishment, or grocery store are subject to an extra 1 percent tax starting October 1, 2019, for a total rate of 7.35 percent.
Increased taxes on alcohol sales. The tax on sales of alcoholic beverages (except beer) will jump by 10 percent starting October 1, 2019. That same date, alcoholic beverage tax on beer sold to-go by craft breweries will drop by 50 percent. Starting January 1, 2020, only the first 15 barrels served a year at a craft brewery taproom will be exempt.
New tax on e-cigarettes and vaping products. A 40-cent per milliliter tax on vaping products takes effect October 1, 2019, as does a 10-percent tax on the wholesale price of vaping “juice.”
Tax collection requirement for home rental marketplaces. Connecticut already requires many marketplace facilitators to collect and remit tax on sales made through the marketplace. Starting October 1, 2019, home rental marketplaces will have to collect occupancy taxes on behalf of their hosts.
Additional product taxability changes will take effect at the start of the new year.
Effective January 1, 2020, sales of the following (currently exempt) will be subject to Connecticut sales tax:
- Dry cleaning and laundry, with the exception of coin-operated laundry
- Interior design services
- Metered and other previously exempt parking (will this include parking at federal, local, and state parks?)
- Safety apparel