WHAT ARE OTHER COMMON ERRORS BY BUSINESSES THAT LEAD TO USE TAX LIABILITY?
The improper use of other exemption certificates can lead to use tax liability. For example, non-manufacturing companies may not use manufacturer’s exemption certificates for the purchase of machinery, or for the purchase of materials, fuel and tools. Likewise, nonprofit organizations may not purchase goods or services exempt from tax unless the goods or services are for the exclusive use of the organization. 13. HOW DOES THE DEPARTMENT OF REVENUE SERVICES DISCOVER USE TAX LIABILITIES? DRS periodically audits businesses. In addition, Connecticut has reciprocal agreements with numerous states. These agreements enable Connecticut to obtain information on purchases subject to use tax and to share such information with other states. 14. WHAT ARE THE PENALTIES FOR LATE PAYMENT OR UNDERPAYMENT OF THE USE TAX? The penalty is 15% of the tax due or $50, whichever is greater. Interest is charged at the rate of 1% per month from the due date of the tax return. There are also criminal sanctions fo
