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77 Higher Taxes for Connecticut

HARTFORD – According to a new tally by the Yankee Institute, the State of Connecticut will impose at least 77 separate tax increases over 24 categories as part of the changes recently made by the General Assembly.

1. Raises income tax on individuals making as little as $50K and couples making at least $100K
a. Expands the number of brackets from 3 to 6
b. “Bracket Creep” shifts many taxpayers into higher brackets
c. Highest marginal rate rises from 6.5% to 6.7%
d. Phases out the 3% tax bracket for taxpayers with CT AGI of over 56,500 for individuals, $100,500 for joint filer,
e. Income tax hikes retroactive to January 1, 2011

2. Recapture Provision for high income earners effectively flattens the income tax rate on high income earners for the entire amount of their income

3. Property tax credit reduced from $500 to $300 and phased out for couples over $100,500

4. Sales and Use Tax – Increased the general sales and use tax rate from 6% to 6.35%

5. Eliminates Sales and Use Tax Exemptions for:
a. Hazardous waste removal
b. Valet parking at any airport
c. Yoga instruction at a yoga studio
d. Clothing and footwear costing less than $50
e. Non-prescription drugs and medicine
f. Cloth or fabric for non-commercial sewing
g. Property or services used in operating solid waste-to-energy facilities
h. Yarn
i. Smoking cessation products

6. Expands the Sales and Use Tax to include:
a. Motor vehicle storage
b. Packing and crating
c. Motor vehicle towing and road services
d. Intrastate transportation via limousine, community car, or van with a driver
e. Pet grooming and boarding
f. Cosmetic medical procedures
g. Manicures and pedicures
h. Spa services

7. Estate Tax – Lowers the threshold at which the estate tax applies from $3.5 million to $2 million. The estate tax has eight rates starting at 7.2% for estates between $2 million and $3.5 million up to 12% on estates over $10.1 million
8. Hotel tax – Increased from 12% to 15%
9. Luxury Goods Tax – 7% sales and use tax on motor vehicles costing more than $50,000, boats over $100,000, jewelry over $5,000, and clothing over $1000. Rate applies to the entire cost of the item, not just the amount over the threshold.
10. Rental Car Surcharge – Increased from 6.35% to 9.35% on short term car rentals
11. Alcoholic beverages tax
a. Increases excise taxes on alcoholic beverages by 20%
b. One-time floor tax on alcoholic beverages in inventory as of 7/1/2011
12. Corporate Tax Surcharge – 20% corporation tax surcharge for the 2012 and 2013 income years for companies with at least $100 million in annual gross income in those years and a tax liability that exceeds $250. This replaces a temporary 10% surcharge in law for FY2011.
13. Cigarette tax
a. Increases from $3 to $3.40 per pack
b. One-time floor tax on cigarettes in the inventory of stores as of 6/30/2011
14. Tobacco Products Tax
a. Increased on snuff tobacco from $0.55 to $1/ounce
b. Increases of 27.5% to 50% on all other tobacco products such as cigars, pipe tobacco, etc.
15. Diesel Fuels Tax
a. Increases the base tax on diesel fuel from $0.26 to $0.29 per gallon
b. Imposes a $0.03/gallon tax on diesel in inventory as of 6/30/2011
16. Real Estate Conveyance Tax
a. Increases the real estate conveyance tax rates from 0.5% to 0.75% on the first $800,000 of the sale price of a residential property
b. Increases the marginal tax on nonresidential and residential property over $800,000 from 1.00% to 1.25%
17. Electric Generation Tax – Imposes a new temporary tax of .25 of one cent per net kilowatt hour of electricity generated and uploaded into the regional bulk power grid at Connecticut facilities, except for solar, wind, or fuel cell energy
18. Admissions Tax Exemptions Eliminated – The following locations are no longer exempt from the 10% admissions tax on the ticket price:
a. Hartford Civic Center
b. New Haven Coliseum
c. New Britain Beehive Stadium
d. New Britain Stadium
e. New Britain Veterans Memorial Stadium
f. Bridgeport Harbor Yard Stadium
g. Stafford Motor Speedway
h. Lyme Rock Park
i. Thompson Speedway
j. Waterford Speedbowl
k. Tennis Foundation of Connecticut
l. William A. O’Neill Convocation Center
m. Nature’s Art
n. Connecticut Convention Center
o. Dodd Stadium
p. Arena at Harbor Yard
q. New Britain Rock Cats games
r. New Haven Ravens games
s. Waterbury Spirit games
19. Amazon tax – Requires remote sellers with no physical presence in Connecticut to collect sales taxes on their taxable sales in Connecticut
20. Cremation certificate – fee increases from $100 to $150
21. DMV fee changes
a. Increases fees on late renewals
b. Increases fees on getting a regular drivers license and CDL
c. Increases all vehicle registrations
d. Increases fees paid by violators of certain motor vehicle laws such as speeding, reckless driving, and DUI
22. Hospital Tax – establishes a new 4.6% quarterly tax on hospitals’ net patient revenue
23. Nursing Home Resident User Fee – increases fee from 5.5% to 6%
24. Handicapped Care Fee – establishes a new fee for providers of care to individuals with mental retardation. Currently 5.5% is the Connecticut maximum, but can go up to the federal maximum (currently 6%) as of Oct. 1.

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