July 14, 2008



State Tax Changes 1990-2008


By: Judith Lohman, Chief Analyst



You asked for a list of state tax increases and decreases enacted since 1990. OLR Report 2011-R-0419 lists changes from 2009 through 2011.




The General Assembly made hundreds of changes in state taxes between 1990 and 2008.  It enacted tax increases in the form of entirely new taxes; increases in rates of existing taxes; extensions of existing taxes to new products, services, and entities; and elimination or reduction of, or limits on, tax credits and deductions.  Tax decreases include tax phase-outs and repeals; reduced tax rates; and new and expanded tax exemptions, credits, and deductions.  The table below lists these increases and decreases year by year for each tax. It does not include minor definitional changes and clarifications. It covers only state taxes and does not include changes in the local property tax.


In addition to the tax increases and decreases listed below, during the 18 years covered by this report, the General Assembly also enacted three tax amnesties (in 1990, 1995, and 2002) and two tax rebate programs (in 1998 and 1999).


TAX changes 1990-2008


Tax increases enacted in 1990 and after include new taxes; increases in tax rates; expanded tax bases; and tax credits, exemptions, and deductions eliminated, reduced, or limited.  Tax decreases include taxes eliminated or scheduled for elimination; new and expanded tax exemptions, credits and deductions; and reductions in tax rates.


Tax Changes, 1990-2008


Admissions Tax

Exempt events at Beehive Stadium, O’Neill Center, Tennis Foundation, and New Britain Memorial Stadium.


Exempt carnival and amusement park rides.



o    Live performances at Candlewood Playhouse and Ocean Beach Park.

o    Movie charges under $4.50.



o    Movie charges under $5.

o    Events at Stafford Motor Speedway, Lime Rock Park, Thompson Speedway, Waterford Speed Bowl, Bridgeport Harbor Yard Stadium, and New Haven Ravens and Waterbury Spirits games.


·         Exempt:

o    Events at Connecticut Expo Center.

o    Establishments formerly subject to cabaret tax.

·            Reduce tax on movie tickets over $5 from 10% to 8% as of 7/1/00 and to 6% as of 7/1/01.


Exempt events at:

  • Nature’s Art, near Waterford, effective 4/1/06.
  • Arena at Harbor Yard, Bridgeport, effective 11/1/06.
  • Dodd Stadium, Norwich, effective 11/1/06.

Exempt events at Connecticut Convention Center

Business Entity Tax


New $250 per year tax on limited liability companies and partnerships, limited partnerships, and S corporations.


Impose 20% surcharge for 2004.

Cabaret Tax



  • Places offering karaoke without paid entertainer.
  • Restaurants serving only beer or only beer and wine.


Tax repealed effective 7/1/99.

Capital Gains, Interest, and Dividends Tax


Tax extended to nonresidents’ gains from sale of Connecticut real estate


·            Rates reduced as of 1/1/91:

o    Capital gains from 7% to 4.75%.

o    Dividends and interest from a range of 1% -14% to a range of 0.75% - 9.5%.

·            Tax repealed effective 1/1/92.  Income is subject to personal income tax (see below).

Cigarette Tax


Increase from $0.40 to $0.45 per pack as of 10/1/91.


Increase from:

o    $0.45 to $0.47 per pack as of 7/1/93.

o    $0.47 to $0.50 per pack as of 7/1/94.


Increase from $0.50 to $1.11 per pack as of 4/3/02.


Increase from $1.11 to $1.51 per pack as of 3/15/03.


Increase from $1.51 to $2.00 per pack as of 7/1/07.


Controlled Substances Tax


·    New tax on marijuana and other illegal controlled substances imported into the state.

·    Rates:

o    Marijuana - $3.50/gram

o    Other illegal drugs - $200/gram

o    Illegal drugs not sold by weight - $2,000 per 50-dose unit

Corporation Tax


·         Cap tax liability of regulated investment companies and real estate investment trusts under capital base method of calculating tax at $50,000 annually starting on and after 1/1/91.

·         Limit tax liability due from such companies under the capital base method at $500,000 per year for income years 1/1/86 to 1/1/91.


·         Reduce tax surcharge from 20% to 10% as of 1/1/92 and eliminate surcharge as of 1/1/93.

·         Provide up to 10% credit for natural gas vehicle operating costs for 1991 and 1992 income years.


·            Extend tax to nonprofit corporations’ unrelated business income.

·            Credits:

o    20% research and development (R&D) credit – phased in 10% per year over two years starting 1/1/93 – full credit starting 1/1/94.

o    25% job training credit phased in 5% per year starting in 1995 – full credit starting 1/1/99.

o    25% credit for technology-related R&D grants to Connecticut colleges and universities.

o    Maximum 25% credit for up to seven years for new manufacturing or economic base industries, depending on facility size and number of new workers hired.


·            Eliminate deduction from gross income for non-life insurance company unpaid loss reserve adjustment.

·            Exempt mutual funds and real estate investment trusts.

·            Establish multi-year tax rate reduction (Schedule modified in 1995 – see below):

  • 11.5% to 11.25% as of 1/1/95
  • 11% as of 1/1/96
  • 10.5% as of 1/1/97
  • 10% as of 1/1/98

·            Credits:

  • 5% credit for small and 10% credit for medium-sized companies for increased machinery and equipment spending.
  • 1% to 6% credit for R&D spending.


·            Exempt cooperative housing corporations retroactive to 1990.

·            Credits:

o   Increase credit for apprenticeship wages from $2.40 to $4 per hour and maximum annual credit per apprenticeship from $3,000 to $4,800 per year.

o   50% credit for expenses of traffic reduction program related to federal Clean Air Act.

o   Expand 5% credit for small companies’ machinery and equipment spending to companies with up to 800 employees.

o   100% credit for property taxes on electronic data processing equipment starting with taxes on 10/1/94 grand list.

o   50% credit for certain alternative fuel vehicle expenses for 1994-98 income years.

o    10%-20% credit for investments in Connecticut insurance companies through qualified insurance reinvestment funds (applies against corporation, insurance premium, and personal income taxes).



·            Establish new tax rate reduction schedule:

  • 11.25% to 10.75% as of 1/1/96
  • 10.5% as of 1/1/97
  • 9.5% as of 1/1/98
  • 8.5% as of 1/1/99
  • 7.5% as of 1/1/00

·            Credits:

  • Delay start of Clean Air Act credit from 1/1/95 to 1/1/96 but make expenses during 1995 and 1996 eligible for a credit in 1997.
  • Defer start of small- and medium-sized company credit for machinery and equipment spending from 1/1/95 to 1/1/97.
  • Delay start of credit against insurance premium tax for electronic data processing equipment property taxes from 10/1/94 grand list to 10/1/96 grand list.
  • Modify 50% tax credit for firm moving to state that builds building of at least 900,000 square feet and locates at least 2,000 jobs in state to provide 40% credit for 1,600 jobs and 30% credit for 1,200 jobs.
  • Extend apprenticeship credit to qualified plastics trade apprenticeships
  • Credit for firms investing in the Critical Industries Development Account.


·         Four-year phase-out of tax on subchapter S corporations by gradually reducing the percentage of their net taxable income as follows:

o    90% as of 1/1/97

o    75% as of 1/1/98

o    55% as of 1/1/99

o    30% as of 1/1/00

·         Exempt:

o    S corporations exempt as of 1/1/01.

o    Out-of-state corporations if their only state contact is as a limited partner in an investment partnership.

o    Banks, insurers, and investment companies if (1) 100% of their business is conducted outside the US and (2) their headquarters are located in a special Hartford export zone.

o    Out-of-state companies whose only contact with state is a contract with Connecticut commercial printers.

·         Allow regulated investment companies to use an alternative apportionment formula.

·         Credits:

o    Job creation tax credit

o    10-year credit for new business locating in an enterprise zone that hires zone residents – credit is 100% for three years and 50% for seven years

o    Expand alternative fuel vehicle credit

o    Credit for parent education and child care programs


·            Allow certain companies to use single-factor apportionment for credit card income.

·            Credits:

o    Establishes credits for fixed and human capital investments and phases credits in over three years as follows:

Ø  3% for 1998

Ø  4% for 1999

Ø  5% for 2000 and after

o    Up to $1,000 per year credit for each construction trade apprenticeship

o    Extend alternative fuel credit for two additional years.

o    Increase overall limit on Neighborhood Assistance Act credits from $3 million to $4 million.

o    Increase maximum Neighborhood Assistance Act tax credit a business can receive for certain employee child daycare facilities to $50,000.



·            Exempt:

o    Passive investment companies.

o    Domestic insurers.

o    Capital gains from sale of open space or of land to the state, municipality, nonprofit conservation organization, or water company if it is permanently preserved as open space or class I or II watershed land.

·            Allow single-factor apportionment for financial services companies and exclude such companies from the capital base alternative.

·            Eliminate minimum tax for foreign corporations whose sole Connecticut activity is trading stocks and securities for their own accounts.

·            Credits:

  • Extend R&D credit carry-forward to 15 years starting in 2000.
  • Extend 6% R&D credit to qualifying business with less than $100 million in gross income starting in 2000.
  • Give electric suppliers a one-time, $1,500 tax credit for each dislocated worker they employ for more than six months.


·            Extend the maximum length of net operating and capital loss carryovers from five to 20 years.

·            Credits:

  • Increase limit on overall Neighborhood Assistance Act credits from $4 million to $5 million.
  • Extend alternative fuel credits to 1/1/02.
  • Credit for guarantee fees paid when obtaining financing from the Small Business Administration.
  • Historic home rehabilitation credit – maximum $30,000 per home/ $3 million per year.
  • Permit companies with less than $70 million in gross sales to sell unused R&D tax credits to the state for 65% of their value.
  • Increase annual overall limit on low- and moderate-income housing program and Rental Housing Assistance Trust Fund credits from $1 million to $5 million.
  • 50% credit for land donated to state, municipality, or nonprofit land conservation organization for open space.
  • Allow S corporations to claim 100% of Neighborhood Assistance Act credits for the 1999 and 2000 income years, instead of 55% and 30% respectively.



o    Eliminate credit for investments in insurance reinvestment funds created after 7/1/00.

o    Credit for donating new or used computers to schools.

o    Allow S corporations to claim 100% of low- and moderate-income housing program credits for the 1999 and 2000 income years, instead of 55% and 30% respectively.

o    Establish credit for urban site remediation.

o    Apply human capital credit to contributions to individual development accounts.


·            Allow manufacturers and broadcasters to use single-factor apportionment starting 1/1/01 for manufacturers and 10/1/01 for broadcasters.

·            Credits:

o    Eliminate credit for investments in insurance reinvestment funds as of 12/31/15.

o    Make investments in eligible environmental remediation and urban site reinvestment projects through community economic entities eligible for Urban & Industrial Site Remediation Fund credit.



·         Bar use of special federal bonus depreciation deductions in state corporation tax.

·         Require companies to pay the $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.

·         Extend alternative fuel credit to 7/1/04.


·         Impose 20% surcharge for 2003.

·         Impose 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.

·         Increase credit from 40% to 60% of certain Neighborhood Assistance Act investments (applies to all business taxes).


·         20% surcharge for 2006 for companies paying more than the $250 minimum tax.

·         15% surcharge for 2007 for companies paying more than the $250 minimum tax (surcharge eliminated in 2006).

·         Investment threshold for urban and industrial sites reinvestment credit reduced from $20 million to $5 million ($2 million for rehabilitating historic properties).

·         Exempt corporations whose only activity in Connecticut is participating in trade shows at the Hartford convention center, if they meet certain conditions.


·         Credits (applicable to all business taxes):

o    Increase maximum total credits for contributions to nonprofit housing developers from $5 million to $10 million per year.

o    25% of state income tax withheld from new employees’ wages by a company that relocates to Connecticut and creates at least 50 new full-time jobs here (Job Creation Credit).

o    $1,500 per worker credit for hiring Connecticut worker previously laid off because of a corporate restructuring in which at least 10 workers in the state lost jobs.

o    Eliminate tax credit of up to $100,000 for employer contributions to revolving loan fund for loans to low- and moderate-income employees.

·            Corporation Tax only:

o    Eliminate 15% tax surcharge for the 2007 income year for all corporations other than those that owe the $250 minimum.

o    Establish a transferable credit equal to 30% of eligible film and digital media production expenses incurred in Connecticut over $50,000.

o    Establish a credit of 25% of qualified costs up to $2.7 million for rehabilitating historical commercial and industrial properties for residential use.

o    Expand range of projects eligible for urban and industrial sites reinvestment credit.

o    Allow corporations to pass through corporate tax credits to non-corporate subsidiaries under certain conditions.

o    Extend credit for hiring construction trade apprentices to nonunion businesses.



·         Corporation Tax Credits:

o    Transferable credit for capital investments in film industry infrastructure – credits are 10%, 15%, or 20% depending on size of investment.

o    Transferable credit equal to 30% of eligible digital animation production expenses incurred in Connecticut over $50,000.

·            Business Tax Credits:

o    25% of qualified expenses for rehabilitating historic property for mixed residential and commercial use (30% if a portion of the units are affordable housing).

o    Expand creation tax credit (see above) to cover any company that creates at least 10 new jobs and increase the credit amount from 25% to 60% of the state income taxes withheld from new employees’ wages.

o    Increase Neighborhood Assistance Act credit for energy conservation projects in low-income housing developments or nonprofit properties from 60% to 100% of investment and extend the credit to properties these organizations own but do not occupy.

Dues Tax



o    Private lawn bowling clubs.

o    Portion of dues paid by club members used to acquire open space.


Exempt club locker rentals.

Estate, Succession, and Generation-Skipping Transfer Taxes


·            Exempt gifts not subject to state gift tax.

·            Provide credit for state gift tax paid.


Succession tax phase-out enacted, starting 1/1/97. Tax fully eliminated as follows:

o    Class A heirs – as of 1/1/01

o    Class B heirs – as of 1/1/02

o    Class C heirs – as of 1/1/05


·         State generation-skipping transfer tax established.
·         Extend succession tax to nonresident estates.


·            Delay succession tax phase out schedule for one year for Class B and C heirs still subject to the tax as of 1/1/01

·            Freeze tax rates at 2001 levels for deaths occurring in 2002 instead reducing rates as previously scheduled on 1/1/02


·         Impose temporary tax on estates over $1 million of people who die between 7/1/04 and 12/31/04.

·         Delay remaining steps in succession tax phase-out by two years, postponing final phase-out from 1/1/04 to 1/1/06 for Class B, and from 1/1/06 to 1/1/08 for Class C, heirs.


·         Establish new estate tax applicable to:
o      Estates exceeding $2 million of those who die on or after 1/1/05.
o      Estates of decedents who die on or after 1/1/05 whose combined taxable estate and value of taxable gifts (see below) made during life after 1/1/05 exceeds $2 million.

·         Rates vary from 5.085% to 16.0% depending on estate value.

·         Repeal succession tax for remaining Class B and C heirs as of 1/1/05


Gift Tax


·    New tax applicable to federally taxable transfers of real and personal property (tangible and intangible) located in Connecticut.

·    Rate: Variable, depending on value of gift.


Phase tax on gifts under $1 million as follows:

o    Gifts of $25,000 or less - 1/1/01

o    Gifts $25,001 to $50,000 – 1/1/04

o    Gifts $50,001 to $75,000 – 1/105

o    Gifts $75,001 to $100,000 – 1/1/06

o    Gifts $100,001 to $950,000 – 1/1/07

o    Gifts $1 million or less – 1/1/08


Delay phase-out of tax on gifts of $1 million or under for two years, from 1/1/08 to 1/1/10.


·            Repeal old gift tax.

·            Establish new gift tax for gifts made on or after January 1, 2005 exceeding a lifetime exclusion of $2 million. Tax rates range from 5.085% to 16.0% depending on value of gift.  The $2 million lifetime exclusion applies against both new gift and new estate tax (see above).

Hospital Gross Receipts Tax


New 11% tax as of 4/1/94.


Phased reduction over four years as follows:

o    11% to 9.25% as of 10/1/96

o    8.25% as of 10/1/97

o    7.25% as of 10/1/98

o    6.25% as of 10/1/99


Exempt Connecticut Children’s Hospital.


·            Exempt John Dempsey Hospital.

·            6.25% rate scheduled to take effect 10/1/99 reduced to 4.5% (tax eliminated as of 4/1/00).

Income Tax


·    Personal income tax on Connecticut taxable income (federal adjusted gross income (AGI) with certain modifications) of resident and nonresident individuals, trusts, and estates.

·    Rate: 1.5% for 1991 income year; 4.5% for income years 1992 and after.


Deduction for expenses connected with income that is federally tax exempt but taxable in Connecticut.


Establish alternative minimum tax (AMT) equal to 23% of federal AMT.


·            Restructure the personal credit to increase the maximum AGI that qualifies a person for the credit, phases out the credit for higher incomes, and generally creates a more graduated structure to reduce income tax “cliffs.”

·            Establish new AMT– lesser of 19% of adjusted federal tentative minimum tax or 5% of adjusted federal AMT.

·            Limit taxation of Social Security benefits to the amounts subject to federal taxation before 1993.

·            Establish credit for property tax paid on privately owned motor vehicle – phase-in starts 1/1/97.

·            10-20% credit for investments in qualified insurance reinvestment fund.


·            Rates reduced from 4.5% to 3% as of 1/1/96 on first:

o    $4,500 of taxable income for singles

o    $7,500 for heads of household

o    $9,000 for joint filers

·            Property tax credit up to $100.


Exempt income derived from foreign residents in connection with a company located in designated Hartford insurance and financial services export zone



·            Increase income that is subject to 3% tax rate over three years:

o    Joint Filers

Ø  From $9,000 to $12,500 as of 1/1/97

Ø  To $15,000 as of 1/1/98

Ø  To $20,000 as of 1/1/99

o    Heads of Household

Ø  From $7,000 to $10,000 as of 1/1/97

Ø  To $12,000 as of 1/1/98

Ø  To $16,000 as of 1/1/99

o    Singles

Ø  From $4,500 to $6,250 as of 1/1/97

Ø  To $7,500 as of 1/1/98

Ø  To $10,000 as of 1/1/99

·            Increase maximum property tax credit:

  • From $100 to $215 as of 1/1/97.
  • To $285 as of 1/1/98.
  • Reduce credit above $100 by 10% for every $10,000 in income above state thresholds.
  • Extend credit to vehicles leased for more than one year.

·            Exempt 50% of Social Security benefits previously subject to income tax, starting with 1998 income year.


·            Increase maximum property tax credit scheduled to take effect 1/1/98 from $285 to $350.


·            Phase in increase in standard deduction for single filers from $12,250 to $15,000 over six years from 1/1/00 to 1/1/07.

·            Increase personal credit phase-out threshold for single filers over seven years beginning in tax year 2000.

·            Increase maximum property tax credit:

  • From $350 to $425 as of 1/1/99.
  • To $500 as of 1/1/00.

·            Exempt federally taxable Social Security benefits from state income tax for the following:

  • Singles and married people filing separate with AGI under $50,000.
  • Joint filers and heads of household with AGIs under $60,000.



o    Holocaust settlement payments.

o    Interest earned on funds deposited in individual development accounts.


Extend tax to nonresident winners of Connecticut lottery if winnings exceed $5,000.


·            Individuals receiving income from business not covered by the corporation tax cannot deduct federal bonus depreciation allowance.

·            Delay each scheduled increase in standard deduction and tax credits for singles for two years – phase-in completed in 2009 instead of 2007.

·            Provide income tax relief to terrorist victims of September 11, 2001 and anthrax attack occurring between September 11, 2001 and January 1, 2002.


·         Increase rate on upper bracket from 4.5% to 5%.

·         Reduce maximum property tax credit from $500 to $350. (Credit increased to $500 again in 2004 to start in 2005, but see below.)

·         Eliminate $100 minimum property tax credit.


·         Reduce maximum property tax credit for 2005 from $500 to $350.

·         Reduce maximum property tax credit for 2006 and after from $500 to $400 (later raised to $500 as of 1/1/06).

·         Delay scheduled income tax reductions for single filers by two years

·         Exempt 50% of military retirement income starting with income years on and after January 1, 2008.



·         Increase the maximum property tax credit from $400 to $500 for tax years starting 1/1/06.

·         Allow taxpayers to deduct contributions to the Connecticut Higher Education Trust of up to $5,000 for individuals and $10,000 for joint filers.


Exempt interest earned on an account in the Connecticut Home Care Option Program for the Elderly.


Exempt dividends and capital gains earned on an account in the Connecticut Home Care Option Program for the Elderly.

Insurance Premium Tax


·            Reduce rate from 2% to 1.75%.

·            Extend tax to HMOs.


Exempt State Health Plan and federal Medicare policies.


Exempt Medicaid, HUSKY, and General Assistance health insurance policies.


Credit for HMOs providing coverage under HUSKY programs equal to $55 per patient per month.


Increase HUSKY tax credit to $73.50 per patient per month (credit eliminated in 2002 – see below).


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.



o    Transferable credit for capital investments in film industry infrastructure – credits are 10%, 15%, or 20% depending on size of investment.

o    Transferable credit equal to 30% of eligible film and digital media production expenses incurred in Connecticut over $50,000.

o    Transferable credit equal to 30% of eligible digital animation production expenses incurred in Connecticut over $50,000.


Apply transferable 30% film production expense credit against 2006 insurance premium tax liability.

Motor Fuels Tax


·    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.

·         Reduce diesel fuel tax from $.23 to .18 per gallon.


·         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.

·         Reduce tax on propane sold for vehicles to $.18 per gallon.


Exempt alternative fuels sold to fleets covered by Clean Air Act from 7/1/94 to 6/30/99.


Reduce tax on natural gas sold for vehicles to $.18 retroactive to 9/1/91.


Exempt all alternative fuels until 7/1/01.


·            Gasoline tax reduced:

o    $.39 to .36 as of 7/1/97

o    $.36 to .33 as of 7/1/98

·            Exempt:

o    Fuel used for federally funded Meals on Wheels programs.

o    Diesel fuel used for portable generators larger than 150 kw.


·            Reduce gasoline tax by an additional $.01 (to $.32).

·            Exempt school bus fuel.


Extend alternative fuel exemption expiration to 7/1/02.


Reduce gasoline tax from $.32 to .25.


·            Extend alternative fuel exemption expiration to 7/1/04.

·            Increase diesel tax from $.18 to .26 as of 8/1/02.


Increase gasohol tax from $.24 to .25 per gallon.


·            Increase diesel tax from $.26 to .37 per gallon effective 7/1/07.

·            Starting 7/1/08, require DRS to calculate new diesel tax rate annually.

·            Limit diesel fuel tax refund for farmers to $ .26 per gallon.

·            Give waste haulers a refund of tax paid on fuel used exclusively for hauling waste for the Connecticut Resource Recovery Authority’s Mid-Connecticut Project.

Nursing Home Provider Tax


Establish a nursing home provider tax of 6% of net revenues adjusted for number of annual patient days.


Reduce tax rate from 6% to 5.5% of net revenue.

Petroleum Products Gross Earnings Tax


·         Increase tax from 3% to 5% per quarter.

·         Expand tax to any company importing more than $100,000 worth of petroleum products into the state quarterly for its own use.


Exempt bunker and marine diesel fuel oils and marine gas used in vessels with displacements of 4,000 dead weight tons or more.


Exempt kerosene for home heating.


Exempt propane for motor fuel or nonresidential heating from 7/1/95 to 1/1/00.


Exempt No. 2 oil used in commercial fishing vessels.


Phase down tax on the following from 1998 to 2002 to 1% as of 7/1/02:

o    Fuel used in vessels primarily engaged in interstate commerce.

o    #6 fuel oil used by industrial customers.


Exempt paraffin and microcrystalline waxes.


Extend exemption for propane used as motor vehicle fuel to 7/1/02.



o    Fuel cell fuel until 7/1/04.

o    Extend exemption for propane used as motor fuel to 7/1/04.


·         Increase tax from 5% to:

o    5.8% for FY 06

o    6.3% for FY 07

o    7.0% for FY 08

o    7.5% for FYs 09-13

o    8.1% for FY 14 and thereafter.


Exempt commercial heating oil blends containing not less than 10% biofuels.


Exempt all diesel fuel except diesel used in an electric generating plant to generate electricity.


Eliminate rate increase to 7.5% scheduled for 7/1/08.


Public Service Companies Tax


Phase-out tax on electricity and natural gas sold to manufacturers by 1% per year starting 1/1/94, with such sales exempt as of 1/1/98.


·            Exempt:

o    Water companies.

o    Natural gas sold for motor vehicles.

·         100% credit for property tax paid on data processing equipment as of 10/1/94 grand list.


·         Exempt propane sold for motor fuel as of 7/1/95.

·         Delay property tax credit to 10/1/96 grand list property.


Phase out tax on steam companies by 1% per year starting 7/1/96, with such companies exempt as of 7/1/00.


Historic home rehabilitation credit – maximum $30,000 per home/ $3 million per year.


Extend exemptions for propane and natural gas motor fuels until 7/1/02.


Extend exemptions for propane and natural gas motor fuels until 7/1/04.


Increase tax rates for municipal electric companies from 4% to 6.8% for transmitting power to residential customers and from 5% to 8.5% for transmission to nonresidential customers.

Real Estate Conveyance Tax


Exempt transfers of real property between affiliated corporations that are federally tax-exempt and where one corporation controls 100% of the other or a third party controls 100% of them both.


·            Rate reduced from 1% to .5% on transfers to regulated lending institutions of property worth more than $800,000 with mortgage at least six months. Delinquent (reduction extended to subsidiaries of lending institutions in 1992).

·            Exempt transfers between certain tax-exempt corporations and transfers to nonprofit organizations that hold land in trust for conservation or recreation.


Exempt conveyance of burial rights in cemeteries.


Exempt conveyance of farmland development rights to the state.


Exempt deeds of property for the Adraien’s Landing and UConn stadium sites.


Increase municipal tax rate from 0.11% to 0.25% until 7/1/04.  Allow 18 towns to increase their rates to 0.5% until 7/1/04. 


·            Extend 0.25% municipal rate expiration to 7/1/05.  Make option for extra 0.25% for 18 towns permanent.

·            Exempt employer and relocation company sales of residential property acquired through employee relocation plans.


Extend 0.25% municipal rate expiration to 7/1/07.


Extend 0.25% municipal rate expiration to 7/1/08.


Extend 0.25% municipal rate expiration to 7/1/10.

Sales and Use Taxes


·    Limit tax on consulting services to management consulting services.

·    Extend sales tax liability to out-of-state companies that ship taxable items to or for use in Connecticut (not implemented due to U.S. Supreme Court decision).

·    Exempt:

o    Accommodations at a facility operated by and in the name of a nonprofit organization from the hotel occupancy tax.

o    Increase exemption threshold for items sold by charitable organizations and elementary and secondary schools to raise money for student and youth activities from $5 to $20 per item.

o    Equipment used to produce, clean, or store computer discs.

o    Materials and equipment used to produce radio and television programs for accredited medical training on or after 10/1/86.

o    Molds, dies, patterns, and sand handling equipment bought by metal casting foundries.

o    Sales of such equipment by pattern shops to metal casting foundries.


·    Reduce rate from 8% to 6%.

·    Increase tax from 8% to 12% for hotel and lodging house rooms.

·    Extend tax 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

·    Exempt:

o    Architectural and building engineering, planning, and design services, including interior design and decorating

o    Cooperative and direct mail advertising

o    Sale, rental, and leasing of large commercial trucks, truck tractors, tractors, and semitrailers used to carry interstate freight

o    Printing materials and equipment

o    Manufacturing machinery components

o    Licensed landscape architect services

o    Public broadcasting equipment and equipment used to transmit medical and surgical training programs

o    Coin-operated car washes

o    Equipment associated with operating natural gas-powered vehicles purchased between 10/1/91 and 1/1/93


·         Extend 12% hotel and lodging house tax to campground spaces (reversed in 1993)

·         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

·         Exempt:

o    Government-owned recreation and amusement facilities retroactive to 10/1/91

o    Amusement and recreation services subject to admissions or dues taxes

o    Parking in lots owned or leased for at least 10 years by employers for exclusive use of employees

o    Land surveying services

o    Dancing lessons

o    Athletic or sporting activities for adults (over age 19), other than swimming, provided by government, nonprofit charitable hospitals, or charitable and religious organizations

o    Massage therapists

o    Increase exemption for separately stated wages and fringe benefits of property management services employees from 95% to 100% and extend exemptions to all employees, not just those performing repair, maintenance, and other routine services to property (retroactive to 1/1/86)

o    Commercial vehicles carrying more than 16 people or 9 students in addition to the driver

o    Aviation fuel

o    Commercial fishing vessels with coastwise fishing certificates from Coast Guard (retroactive to 10/1/91)

o    Aircraft replacement parts and equipment and repair services and equipment

o    Marine fuel oil for large vessels

o    Motor vehicle equipment installed for exclusive use of a physically disabled person

o    Returnable dairy products containers

o    Computer and data processing services by a retailer who acquired the data processing facility after 7/1/91 from its data processing customer


·            Extend tax to:

o    Hospital patient care services (later suspended from 7/1/01 to 7/1/03)

o    Separately stated shipping and delivery charges

o    Certain business analysis, management, or management consultant services provided by general partner to limited partnership

o    New modular and prefabricated homes


·            Exempt:

o   Free prescription drug samples provided by their manufacturers

o   Materials and equipment used to make optical lenses

o   Public and private campgrounds

o   Car washing service

o   Valet parking at airports

o    Wholesale auto auction sales agent services

o    Amusement and recreation services

o    Winter boat storage between 11/1 and 4/30

o    Business-related tax preparation service

o    Sales to nonprofit organizations at least 75% funded by the state or a municipality

o    Custom-made wigs or hairpieces for permanent hair loss due to disease

o    Hearing aid and apnea monitor repairs

o    Equipment used directly to make or transmit finished films for t.v. and radio programs for accredited medical training

o    Landscaping and horticultural, window cleaning, and maintenance services at the home of anyone receiving permanent and total Social Security disability benefits

o    Sales to UConn Educational Properties, Inc. for use at the Connecticut Technology Park

o    Commercial vehicles deriving at least 75% of their revenues from out-of-state trips

o    Sales under $100 at any nursing home and elderly housing facility gift shop, if profits are used to benefit patients

o    Sales to and by state-licensed nonprofit homes for the aged and nursing and rest homes

o    Modular home resales

o    Wages and fringe benefits for leased employees

o    Mobile manufactured home resales in state-licensed parks (use tax)

o    Farm sales tax exemption extended to contract farmers and those who raise and harvest fish



o    Services sold by community economic development affiliates to other affiliates

o    Hazardous waste removal and environmental consulting services (retroactive to 7/1/89)

o    Five-year phase-out of taxes on computer and data processing services – services to be exempt as of 7/1/01

o    Health and recreation clubs

o    Management and consulting services provided to limited partnerships by affiliates

o    All tax preparation and auctioneer services

o    Process control and material and product testing machines

o    Aircraft trade-ins

o    Sales to private water companies

o    Safety apparel

o    Puzzle magazines


·            Extend tax to:

o    Vehicles sold to state residents for out-of-state use only and not registered in the state

o    Farm management and operations services

·            Exempt:

o    Blood plasma and oxygen for medical uses in people or animals

o    Health aid device repairs

o    Library support group book sales

o    Municipal and library sales over $5

o    Vending machine food products

o    Motion picture and sound equipment

o    Rare or antique coins

o    Fuel for vessels primarily engaged in interstate commerce

o    Material and services for Connecticut Resources Recovery Authority projects

o    Off-duty police officers at construction sites

o    Space in municipally operated railroad parking facilities located where air quality does not meet federal Clear Air Act standards

o    Licensed hypertrichologists

o    Certain motor vehicles declared as total loss

·            Exemption Delays:

o    Computer and data processing services by one year until 1/1/02

o    Until 7/1/97:

Ø  tax preparation

Ø  auctioneers

Ø  safety apparel

Ø  private water company purchases

Ø  aircraft trade-ins




o    Machinery, equipment, tools, materials, supplies, and fuel bought by biotechnology companies

o    Banks, insurers, and investment companies headquartered in Hartford export zone if all their business is outside the U.S.

o    Phase-out tax on repairs or maintenance services to water transportation vehicles, except seaplanes - services exempt as of 7/1/99

o    Services by out-of-state printing companies whose only Connecticut activities are contracts with in-state commercial printers to print and distribute printed material

o    Trade-in allowance on remanufactured motor bus parts and components

o    Machinery, equipment, tools, and materials used exclusively in commercial processing of photographic film and paper

o    Livery services, including limousine and sedan car services



o    Services to a low- or moderate-income housing facility sponsored by a mutual housing association

o    Certain construction and renovation services to low- or moderate-income housing facilities

o    Services and property sold to solid waste-to-energy facilities

o    Services and property sold to tourism districts

o    Vegetable seeds

o    Yarn for noncommercial use

o    Radio and t.v. station broadcast equipment – sales, storage, use, rental, or lease

o    Sales by nonprofit organizations at up to five one-day bazaars, fairs, picnics, etc. per year

o    Sales by historical societies

o    Connecticut Development Authority sales of personal property and services

o    Computer and data processing services in connection with the Internet

o    All off-duty police and firefighter services

o    Oxygen equipment bought or leased by veterinarians for use on animals

o    Sale, storage, or use of aircraft with minimum takeoff weight of 6,000 pounds or more

o    Replacement parts for all such aircraft

o    Property purchased for out-of-state delivery or to be incorporated into such property

o    Connecticut Children’s Hospital patient care services



o    Newspapers sold over the counter

o    Trade-in credits provided by retailers

o    The face value of coupons

o    State-mandated deposits, including those for beverage containers and batteries

o    Repair and replacement parts for manufacturing as of 1/1/99

o    Shipping charges on tax-exempt items

o    Any new or remanufactured part for any item of tangible personal property



o    Three–year phase-out of tax on residential paving, staining or painting, wallpapering, roofing, and siding or exterior sheet metal work – services exempt as of 7/1/01

o    Personal property sold under leaseback agreements

o    Inclined stairway chairlifts and their repair and replacement parts

o    Repair and replacement parts for equipment used mainly by disabled people

o    Labor on vessels

o    Vessels sold to out-of-state residents who register them out-of-state

o    Business services provided among affiliated businesses

o    Personnel and business services to joint ventures formed to market and support new or experimental products or systems

o    Training services provided by state-licensed or accredited colleges and universities

o    Tangible personal property used in low- and moderate-income housing projects owned and operated by public housing authorities and services they obtain to develop and operate these projects

o    More types of nonprescription drugs, including dietary supplements and asthma medicine

o    Firearm safety devices, including safes, lock boxes, and trigger and barrel locks

o    Bicycle helmets

o    Railroad locomotives, track ballasts, ties, rails, and machinery and equipment for maintaining rights-of-way if used or operated exclusively for carrying freight

o    Services for calibrating manufacturing machinery, equipment, or instruments

o    Services or practices a business must obtain in order to register and comply with industry-set quality management and quality assurance standards

o    Shoe repair services

o    Services public utilities provide to the Department of Public Utility Control's "Call Before You Dig" Program

o    Motor vehicles sold to limited liability companies or their members when a company is formed or dissolved if the vehicles' last sale was taxable

o    Extend expiration of exemption for alternative fuel vehicles to 7/1/02


·         Exempt:

o    Vending machine items costing less than $.50

o    Clothing and footwear costing less than $75

o    Clothing and footwear costing less than $300 from the third Sunday in August to the following Saturday (“sales tax free week”)

o    High-mileage cars until 7/1/02

o    Child car seats

o    College textbooks

o    Closed-circuit television equipment used to help visually impaired people read

o    Canes for invalids and handicapped people

o    Medically necessary support hose

o    Smoking cessation products

o    Burial caskets

o    Wages and benefits for employees paid under professional employee agreements

o    High-speed data transmission equipment used by telecommunications and cable t.v. companies

o    Internet access

·            Credit for a qualified company selected by the commissioner of higher education on computer equipment it buys on or after July 1, 2000 to use in Connecticut for electronic commerce. Credit equals the resources company provides on or after July 1, 2000 to a Connecticut college or university for (1) designing, planning, building, or renovating buildings or classrooms; (2) acquiring computer equipment; or (3) acquiring property or licenses needed to operate computer programs used for student instruction in business studies related to electronic commerce or workforce development.  The maximum credit is $2 million (later increased to $4 million).



o    Parking in state-operated railroad parking facilities located in areas with substandard air

o    Hospital patient care services from 7/1/01 to 7/1/03

o    Material, equipment, tools and machinery used by fuel cell manufacturing facility

o    Alternative fuel vehicle exemption extended to 7/1/02

o    Caskets used for cremation

o    Services provided between Indian tribes and their affiliated businesses


·         Extend tax to self-storage rental space

·         Exempts:

o    Certain aircraft-related services retroactive to 1/1/94

o    Delay full exemption for computer and data processing services to 7/1/04

o    Noncable communications services bought by cable t.v. companies

o    Extend alternative fuel vehicle exemption expiration to 7/1/04



·         Impose 3% sales tax on sale of advertising services starting 4/1/03 (removed as of 7/1/03).

·         Extend 6% tax to:

o    For-profit, private health and athletic club services

o    Newspapers and magazines sold by subscription (removed as of 7/1/04).

·         Reduce threshold for exemption for clothing and footwear from $75 to $50.

·         Eliminate sale-tax-free week (later restored before taking effect).

·         Freeze sales and use tax on computer and data processing services at 1% (tax had been scheduled to be fully phased out as of 7/1/04)



o    Items sold on the premises of a for-profit hospital by a federally tax-exempt nonprofit organization.

o    Items and services a for-profit hospital buys in connection with building or equipping a hospital facility if the hospital filed a certificate of need before and the certificate was pending on July 1, 2005.



o    Textbooks and related workbooks for private occupational school course

o    Boat brokerage charges

o    Retailers whose only activity in Connecticut is participating in trade shows at the Hartford convention center, if they meet certain conditions.

o    Residential weatherization and energy efficiency products and energy efficient heating equipment from 11/25/05 to 4/1/06

o    Energy-efficient natural gas boilers, propane furnaces and boilers, doors, oil boilers, and ground-based heat pumps; and all water heaters from 12/1/5/05 to 4/1/06



o    Residential weatherization and energy efficiency products and energy efficient heating equipment from June 1, 2006 to July 1, 2007 (exemption made permanent in 2007)

o    Aircraft repair and replacement parts and aircraft repair services for ultralight aircraft

o    Extends to LLCs an existing exemption for business services rendered between joint venture participants under a joint venture agreement  and extends the duration of the exemption from 10 to 20 years from the date the joint venture is formed

o    Charges for yoga instruction provided at a yoga studio

o    Items or services used, incorporated into, or otherwise consumed in building the Connecticut Science Center in Hartford



o    Energy efficient appliances from 7/1/07 to 9/30/07

o    Separately stated charges for fringe benefits, workers’ compensation, and payroll taxes or assessments paid to a media payroll services company

o    Compact fluorescent light bulbs

o    High mileage vehicles (40 mpg or higher) from 1/1/08 to 7/1/10

o    Solar electric and space and water heating systems and related equipment and installation services

o    Geothermal systems and related equipment and installation services

o    Ice storage systems used for cooling and related equipment and installation services for utility customers billed on time-of-use rates

o    Meals sold from honor boxes and coin-operated vending machines

Tobacco Products Tax


Reduce tax on snuff from 20% of wholesale price to $.40 per ounce.


Miscellaneous Taxes


·    Allow full refund against motor carrier road tax for Connecticut motor fuel tax paid on fuel purchased in Connecticut and used out-of-state.

·    Extend hazardous waste generator tax for two years, through June 30, 1992.


Impose 1.75% tax on nursing home facility net revenues between 4/1/92 and 3/31/93.


Impose $2 tax on all motor vehicle tires sold in the state (tax eliminated effective 7/1/96).


Impose 1% surcharge on dry cleaning services as of 7/1/94.


Extend 3% rental car surcharge to rental trucks.


Impose 5% gross earnings tax ion satellite t.v. companies.


Eliminate 10% quarterly tax on the retail value of oysters harvested from state-seeded shellfish grounds.


·            Impose 1.5% surcharge on heavy equipment rentals similar to surcharge on rental cars and trucks.

·            Impose $1-per-trip surcharge on tickets for travel on New Haven line from 1/1/08 to 7/1/15 (later eliminated effective 7/1/07).



·            2% gross earnings tax on railroad express companies.

·            4.5% gross earnings tax on telegraph and undersea cable companies.


Extend 5% gross earnings tax to providers of certified competitive video services.