Proposed Increases to Connecticut's Sales Tax
Recently, House Democrats proposed an increase to Connecticut's sales tax. This increased tax proposal comes in addition to other increased tax proposals on luxury items, hotel stays, and Uber rides (to name a few). The proposed plan is a possible solution to the roughly $3.5 billion deficit for the New England state. Voting is expected to occur on September 14th.
The Current State of Connecticut
Currently, sales tax in Connecticut is at 6.35 percent, one of the highest in the country. Under the proposed plan, sales tax would increase to 6.85 percent. For luxury items specifically, sales tax would increase from the current 7.75 percent to 8.35 percent. "Luxury" items include motor vehicles with value in excess of $50,000, jewelry with value in excess of $5,000, and items such as footwear, handbags, and watches with value in excess of $1,000.
According to the Hartford Courant, the state's "sales and use tax remains one of its most lucrative revenue generators netting about $4.3 billion in fiscal 2016." An increased sales tax would certainly aid the state in eliminating its deficit.
Other Tax Increases in the Works
Furthermore, other major changes involve property tax credit on the state income tax, reductions in the earned income tax credit for the working poor, and increases to the tax on smokeless tobacco. There are also proposals to increase the hotel tax to 16 percent as well as establishing a 25 cent ride-sharing fee for individuals who use services like Uber and the like.
.png?width=250&height=66&name=TaxConnex_logo_withoutTagline_R%20(1).png){kind=logo}
.png?width=225&height=59&name=TaxConnex_logo_withoutTagline_R%20(1).png){kind=logo}
