Connecticut Surcharge for Dry Cleaning No Longer Applies to “Drop Stores”

Wednesday, September 13th, 2017

 
 
A rack of dry cleaned shirts.
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The Connecticut Department of Revenue Services recently released a publication about the taxation of dry cleaning establishments. Connecticut requires these establishments to pay a 1% dry cleaning surcharge on their retail gross receipts of dry cleaning services.

The surcharge is imposed on dry cleaners, not their customers. As a result, dry cleaners are not required to add the surcharge to a customer's bill. However, if a dry cleaner decides to bill its customers for the surcharge, that amount will also be included in the gross receipts and subject to the surcharge.

Effective October 1, 2017, this surcharge no longer applies to "drop stores." "Drop stores" only accept items to be cleaned. The actual cleaning services are performed elsewhere by a separate dry cleaning establishment. Because the drop stores are not performing the dry cleaning services, they are no longer subject to the surcharge.

Note that this surcharge also does not apply to gross receipts from any other service, such as shirt laundering, alterations, tailoring, or sales of goods.

https://www.ttrus.com/sites/default/files/newspdf/sn2017-4_1505333050.pdf


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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