What common mistakes by a business leads to use tax liability?
The improper use of exemption certificates can lead to use tax liability. For example, non-manufacturing companies may not use manufacturers exemption certificates to purchase machinery, 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. In general, a contractor may not use a resale certificate to purchase goods and services used in fulfilling a construction contract. The lease of trucks, heavy equipment, and scaffolding, or the purchase of lumber, nails, tools, or security services are taxable to the contractor and may not be purchased with a resale certificate. The contractor owes use tax on the purchases and leases if no Connecticut sales tax was paid. 13. How does a business that owes use tax remit the tax to the Department of Revenue Services (DRS)? Businesses that make taxable purchases of goods, such as office furniture, computers, and supplie
