OLR Amended Bill Analysis

SB 848 (File 16, as Amended by Senate "A")*

AN ACT CONCERNING THE EXPENSES OF THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT

SUMMARY:

PA 03-2 imposes the sales and use tax on newspapers and magazines sold on or after April 1, 2003. Starting on that date, this bill requires newspaper producers and wholesalers to collect the 6% sales tax when they transfer newspapers to vendors who do not sell any other taxable items.

The bill allows these vendors to pass the tax along to their customers by adding it to the retail sales price of the newspapers without remitting the amount to the state. Presumably the wholesalers and producers would remit the tax they must collect under the bill to the state. Current law requires all newspaper vendors to register with the Department of Revenue Services (DRS) and collect the tax directly from customers, unless a newspaper wholesaler makes an agreement with DRS to collect the tax on behalf of its newspaper carries and remit the tax to the state (DRS Special Notice SN 2003(5)).

*Senate Amendment "A" adds the provision requiring newspaper wholesalers and producers to collect the sales tax and drops the provisions of the original bill that allowed the economic and community development commissioner to use bond funds to support business clusters and pay for environmental assessment of economic development projects.

EFFECTIVE DATE: Upon passage and applicable to sales occurring on or after April 1, 2003.

COMMITTEE ACTION

Commerce Committee

Joint Favorable Report