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CT – Can’t Advertise “tax-free sale”

Posted by salestax on April 3, 2009

For the small business owners out there; take heed to this publication put forth by the Connecticut Department of Revenue.    While you can technically give a discount to your customers that are equal to the amount of sales tax, you cannot advertise that you will absorb or include the taxes in the price of goods.  What you can do, though, is give a customer a discount on the full price equal to the sales tax and then charge sales tax on that reduced price – just be careful how you word what this discount is. 

There are three things that stand true in most states: 1.  Shifting of sales tax is mandatory from vendor to customer, 2.  Absorption of sales tax by vendor is not allowed and 3.  Sales Tax is required to be separately stated on a customer’s invoice.  (exceptions to these rules typically include states such as AZ, CA, HI, NM, SC).

So, if you’re planning to use sales taxes as the reason for your big sale, heed this warning and make sure you’re not setting your business up for trouble.

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