Resources Blog Services
by TaxJar May 2, 2026
In many US states, sales tax only applies to tangible goods. While businesses specializing in professional services are often exempt from sales tax obligations, some states require service-based businesses to charge and remit sales tax. As the economy shifts away from manufacturing and evolves into a service-based structure, states may shift tax obligations, too. Here’s what merchants need to know about taxing services in the state of Connecticut, where the state sales tax rate is 6.35% .
Connecticut is one of the states in the country where many services are taxed. Connecticut’s laws state that taxable services include :
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be taxed. For an in-depth look at Connecticut sales tax, TaxJar’s guide to Connecticut sales tax and the Connecticut Department of Revenue Services have more details.
In Connecticut, most service-based businesses must assess sales tax, file a return, and remit payment to the state. Yet, not all services are taxed and some services – like SaaS sold to a business and used for business – require a lower sales tax rate. Use TaxJar to simplify all the sales tax processes. Learn more about TaxJar and start automating your sales tax compliance. Sign up for a free, 30-day trial and find out how TaxJar can work for you.
Learn more about the common questions (and their answers) about charging sales tax on services in Connecticut.
Some labor or repair work may be taxable (see the state’s guidelines). However, per The Building Contractors’ Guide to Sales and Use Tax (State of Connecticut): “A contractor’s labor is subject to tax when the service is to: • Existing commercial real property; • Existing industrial real property; • Existing income-producing real property; or • Any real property if it is one of the services listed in Services Taxable to All Real Property on Page 13.”
Yes, SaaS is taxed at the standard state sales tax rate of 6.35%; however, SaaS sold to a business and used for business is taxed at a reduced 1% sales tax rate.
Shoe repair services are exempt from sales tax. In addition, some services rendered at a home or residence of a disabled individual also may be exempt from sales tax, per the Connecticut State Department of Revenue Services; these services include “…Landscaping and horticulture services, window cleaning services, or maintenance services rendered at the residence of a person eligible for and currently receiving total disability benefits under the Social Security Act. “ Water, steam, and telegraph services also are exempt. Visit the Department of Revenue Services for a full list of exempted products and services.
Connecticut offers a very specific definition of marketing , and, because of this, digital marketing agencies might need to charge and remit sales tax. Marketing, per the state’s definition, includes testing and research for a client related to the development of a product or goods/services. However, the state also notes the following: “Business analysis, management, management consulting and public relations services, however, are not considered to be marketing services and are subject to the Sales and Use Tax even if an insignificant portion of the contract involves marketing services.” If you are unsure if your business needs to assess and remit sales tax, consult a tax professional for advice and clarification.
It's time to solve your tax complexity
Talk to a TaxJar expert about automating your sales tax compliance.