Connecticut – Amended Penalty Waiver, Permit, and Licensing Provisions

SALT Report 2622 –The state of Connecticut recently enacted legislation that amends or creates provisions regarding the disclosure of tax information, penalty waivers, and sales and use tax permits. These provisions apply to income tax, cigarette and tobacco tax, and sales and use tax.

Disclosure of Tax Information

The Commissioner of the Department of Revenue Services is authorized to disclose tax returns and return information in connection with personnel proceedings and any administrative or judicial proceedings that involve a current or former Department employee if the Commissioner determines that the information is relevant to the proceedings. If the Commissioner releases any tax information it is required to release the same information to the employee who is the subject of the proceedings, or their agent, if the employee requests it.

Additionally, the Commissioner is authorized to establish certain terms and conditions regarding the disclosure of the employee’s information, such as, that it can only be used for the necessary purposes of the proceedings.

Anyone involved in the proceedings who is found to be using the tax information for purposes other than the proceedings will be subject to a fine of up to $1,000, one year in prison, or both.

These provisions are effective June 25, 2013.

Penalty Waivers

The legislation requires the Penalty Review Committee to review and approve:

  • All tax penalty waivers granted by the Commissioner, and
  • All lottery sales agent penalty waivers granted by the Consumer Protection Commissioner,
  • If the penalty waivers are in excess of $1,000

The $1,000 threshold has been increased from the previous amount of $500.

This provision is effective July 1, 2013.

Failure to Obtain or Renew a Sales Tax Permit

A civil penalty of $250 for the first day and $100 for each subsequent day will be imposed on any person who conducts business without a permit or who fails to obtain or renew a sales tax permit. The penalty for each violation of the sales tax permit law is a fine of up to $500, three months in prison, or both.

The Commissioner may waive all or a part of the penalty if they find that the person’s failure to get or renew the permit has a reasonable cause and is not intentional or due to neglect.

This provision is effective July 1, 2013.

For Further Information

Connecticut State Legislature – House Bill 6567, Act 150, Laws 2013