Tax Increases and New Taxes Since 1990

You asked for a table showing new state taxes and tax increases enacted by the General Assembly since 1990.

The table below shows the requested information. It includes new taxes; increases in tax rates; extensions of existing taxes to cover new products, services, and entities; and tax credits or deductions reduced, limited, or eliminated. It does not include delays in scheduled tax phase-outs or repeals, or minor definitional changes or clarifications. Tax changes are listed in chronological order, by tax. Taxes are listed alphabetically.


Business Entity Tax
2002	$ 250 per year tax established on limited liability companies and partnerships, limited partnerships, and S corporations
2003	20% surcharge established for 2003
Capital Gains, Interest, and Dividends Tax
1990	Tax extended to nonresidents’ gains from sale of Connecticut real estate (tax eliminated in 1991)
Cigarette Tax
1991	Increased from 40 to 45 cents per pack as of 10/1/91
1993	Increased from 45 to 47 cents per pack
1994	Increased from 47 to 50 cents per pack
2001	Increased from 50 cents to $ 1. 11 per pack
2003	Increased from $ 1. 11 to $ 1. 51 per pack
Controlled Substances Tax
1991	New tax on marijuana and other illegal controlled substances imported into the state. Rates: • Marijuana - $ 3. 50/gram • Other illegal drugs - $ 200/gram • Illegal drugs not sold by weight - $ 2,000/50-unit dose
Corporation Tax
1992	Tax extended to nonprofit corporations’ unrelated business income
1993	Eliminate deduction from gross income for non-life insurance company unpaid loss reserve adjustment
1997	• Eliminate credits for the following expenses: o Air pollution o Industrial waste o Work education o Employee training o New facilities • Eliminate deduction for home-grown cattle • Limit credit for any single investment in an insurance reinvestment fund to $ 15 million
2000	Eliminate credits for investments in insurance reinvestment funds created after 7/1/00
2001	Eliminate credit for investments in insurance reinvestment funds as of 12/ 31/15
2002	• Bar use of special federal bonus depreciation deductions • Require companies to pay $ 250 annual minimum tax regardless of credits • Limit annual credits to 70% of tax liability without credits • Limit annual R & D credit refunds to $ 1. 5 million per company for 2002 and after. Stretch out payment of unpaid 2000 and 2001 refunds greater than $ 1 million per company over up to three years
2003	• 20% surcharge established for 2003 • 25% surcharge for 2004 for companies paying more than the $ 250 minimum • Increase maximum supplemental tax on corporate groups filing combined returns from $ 25,000 to $ 250,000
Gift Tax
1991	New tax applicable to federally taxable transfers of real and personal property (tangible and intangible) located in Connecticut – Tax rates vary depending on value of gift
Hospital Gross Receipts Tax
1994	New 11% tax as of 4/1/94
Income Tax
1991	Personal income tax established. Rates are 1. 5% for 1991 income year and 4. 5% for income years 1992 and after
1993	Establish alternative minimum tax (AMT) equal to 23% of federal AMT
1994	New AMT established – lesser of 19% of adjusted federal tentative minimum tax or 5% of adjusted federal AMT
2001	Extend tax to nonresident winners of Connecticut lottery if winnings exceed $ 5,000 (repealed before taking effect)
2002	Individuals receiving income from business not covered by the corporation tax cannot deduct federal bonus depreciation allowance
2003	• Increase rate on upper bracket from 4. 5% to 5% • Reduce maximum property tax credit from $ 500 to $ 350
Insurance Premiums Tax
1994	Extend 1. 75% premium tax to HMOs
2002	Eliminate HUSKY credit retroactive to 1/1/01 and replace with payments equal to 100% of credit for FY 02 and 25% for FY 03
Motor Fuels Tax
1991	• Gasoline tax (per gallon) increases scheduled: o $ . 23 to . 25 as of 9/1/91 o $ . 25 to . 26 as of 1/1/92 o $ . 26 to . 28 as of 1/1/93 o $ . 28 to . 29 as of 7/1/93 o $ . 29 to . 30 as of 1/1/94 o $ . 30 to . 31 as of 7/1/94 o $ . 31 to . 32 as of 1/1/95 o $ . 32 to . 33 as of 7/1/95 o $ . 33 to . 34 as of 1/1/96 • Gasohol tax (per gallon) increase from $ . 22 to . 33 according to the above schedule
1993	• Gasoline tax (per gallon) increases: o Advance scheduled increase from $ . 33 to . 34 from 1/1/96 to 10/1/95 o $ . 34 to . 35 as of 1/1/96 o $ . 35 to . 36 as of 4/1/96 o $ . 36 to . 37 as of 7/1/96 o $ . 37 to . 38 as of 10/1/96 o $ . 38 to . 39 as of 1/1/97 • Gasohol tax (per gallon) increase from $ . 33 to . 38 according to the above schedule
2002	Increase diesel tax from $ 0. 18 to . 26 as of 8/1/02
2004	Increase gasohol tax from $ 0. 24 to . 25 per gallon
Petroleum Products Gross Earnings Tax
1991	• Increase tax from 3% to 5% of each quarter’s gross earnings • Expand tax to any company importing more than $ 100,000 worth of petroleum products into the state quarterly for its own use
Real Estate Conveyance Tax
2003	Increase municipal tax rate from . 11% to . 25%. Allow 18 towns to increase their rates to . 5%. Higher rate to expire 6/30/04
2004	. 25% municipal rate expiration extended to 7/1/05. Option for extra . 25% for 18 towns made permanent.
Sales and Use Taxes
1991	• 6% sales and use tax applied to: o Studio photography o Motor vehicle repairs o Parking in lots with 30 or more spaces, with some exceptions o Home paving, painting, staining, wallpapering, roofing, siding, and exterior sheet metal work o Over 100 amusement and recreational services, including dance studios, bowling alleys, and riding stables o 30 miscellaneous personal services, including massage parlors, tattoo parlors, and buyers’ clubs o Tax preparation o Warranty and service-related contracts o DOT-authorized transportation services other than taxis and regularly scheduled route services o Boat slip rentals for noncommercial vessels o 900 phone calls o International phone calls o Non-subscription newspaper sales o Clothing for people aged 10 and over costing more than $ 50 o Children’s clothing costing more than $ 50 o Livestock and feed (except for horses racing in the state) o Seedlings and other items sold by the state forester o Fertilizer, seed, pesticides, nursery stock of edible items, and related products sold to nonfarmers o Sales of ambulances and similar vehicles o Vessels sold in the state by a shipbuilder or marine dealer to nonresidents for use out-of-state • Increase hotel and lodging house tax rate from 8% to 12%
1992	• Extend 12% hotel and lodging house tax to campground spaces • Extend tax to: o All compensation and employment-related expenses for service-provider’s employees o Transportation services licensed by the Interstate Commerce Commission o Raw materials bought and assembled out-of-state made into building components used in state o Golfing services provided at municipally owned golf courses
1993	Extend tax to: • Hospital patient care services (later suspended from 7/1/01 to 7/1/03) • Separately stated shipping and delivery charges • Certain business analysis, management, or management consultant services provided by general partner to limited partnership • New modular and prefabricated homes
1995	Extend tax to: • Vehicles sold to state residents for out-of-state use only and not registered in the state • Farm management and operations services
2002	Extend tax to self-storage rental space
2003	• Impose 3% sales tax on sale of advertising services • Extend 6% tax to: o For-profit, private health and athletic club services o Newspapers and magazines sold by subscription • Reduce threshold for exemption for clothing and footwear from $ 75 to $ 50 • Eliminate sale-tax-free week (later restored before taking effect)
	Succession, Estate, and Generation-Skipping Transfer Taxes
1997	• State generation-skipping transfer tax established • Extend succession tax to nonresident estates
2003	Temporary tax on estates over $ 1 million of people who die between 7/1/04 and 12/31/04
Miscellaneous Taxes
1992	1. 75% tax on nursing home facility net revenues between 4/1/92 and 3/31/93
1993	$ 2 tax on all motor vehicle tires sold in the state
1994	1% surcharge on dry cleaning services as of 7/1/94
2002	Extend 3% rental car surcharge to rental trucks
2003	5% gross earnings tax imposed on satellite t. v. companies


February 23, 2005		2005-R-0211
NEW TAXES AND TAX INCREASES ENACTED SINCE 1990

By: Judith Lohman, Chief Analyst