Connecticut laws/regulations; Background;

OLR Research Report

November 29, 2011




By: Judith Lohman, Assistant Director

You asked if state employees are exempt from the attorney occupational tax and, if so, why.


State employees are exempt from the $565 annual attorney occupational tax and have been since 1984. According to the law's legislative history, the General Assembly's reasons for exempting state employees were that (1) the tax was intended to apply to lawyers in private practice; (2) the exemption applies only to full-time state employee attorneys who are prohibited from engaging in private practice; and (3) at the time the exemption was enacted, the state was already reimbursing some state employee attorneys for their tax payments, apparently as a result of collective bargaining agreements, and the reimbursements were administratively cumbersome for agencies. 


The state imposes an annual $565 tax on attorneys who engaged in the practice of law (CGS 51-81b). The statute exempts from the tax any attorney who is liable for it solely because he or she practiced law while acting as an employee of the state. The following are also exempt:

1. attorneys who have been removed from the list maintained by the clerk of the Hartford Superior Court,

2. retired attorneys who notify the clerk of their retirement,

3. attorneys who served on active duty in the U.S. armed forces for more than six months during the calendar year for which the tax is due,

4. attorneys who do not practice law for a living and receive less than $450 per year in fees or other compensation from legal practice, and

5. attorneys who are liable for the tax only because they practiced law as employees of any political subdivision of the state or probate court (CGS 51-81b (g) & (h)).


The attorney occupational tax was enacted in 1972 as part of a larger bill increasing various occupational licensing and license renewal fees (PA 223). The 1972 act set the tax at $150 annually. It contained only the first three of the exemptions described above. There was no state employee exemption.

The exemption for state employees was enacted in 1984, when the tax was still $150 per year (PA 84-308). The bill that later became law (HB 5268) was raised by the Judiciary Committee.  Its statement of purpose was:

To exempt persons in state service from the occupational tax on attorneys in order to eliminate the cumbersome and costly process of reimbursing those state employees who are subject to the tax; to insure the equal treatment of all state employees subject to the tax; and to provide that any state employee subject to the tax by virtue of activities outside of state employment would be liable for the tax by virtue of such activities.


At the bill's public hearing on March 5, 1984, only one witness, Jack Cronin from the Chief State's Attorney's Office, testified about it.  He supported the bill because the Chief State's Attorney's Office reimbursed its attorneys for the tax and processing the reimbursements was an administrative burden.  The Judiciary Committee reported the bill favorably.

The only legislative debate on the bill occurred in the Senate. The House passed the bill on the Consent Calendar on April 25, 1984. The Senate took it up the next day (April 26). Senator Zinsser asked the bill's proponent, Senator Owens, “Why should they [attorneys working as state employees] be exempt and no other attorneys?” Senator Owens answered that it was because the state employee attorneys were “not out in the marketplace making money as lawyers . . . . They are full-time state employees. They have no part-time practice on the side.” He said the exemption was justified because “full-time state employees are absolutely prohibited from any type of private practice . . .” The Senate passed the bill by a vote of 20-15.


Bills to repeal the state employee exemption were considered in both the 2009 and 2010 sessions.

The 2009 bill was sSB 1157 (File 678), “An Act Concerning the Interest Earned on the Lawyers' Clients' Fund Account Program and the Transfer of Certain Court Fees to Fund Such Program.” Among other things, the bill eliminated the exemption for all government employees, both state and municipal. However, the provision eliminating the exemption was removed by a Senate amendment (Senate “A”) offered by Senator MacDonald. Although the House later rejected Senate “A” and substituted House “A,” it did not restore the exemption repeal provision. There was extensive debate on the amendments in both houses, but it did not focus on the exemption and no one stated a rationale for maintaining it (Senate Transcript, May 21, and June 1, 2009; House Transcript, May 29, 2009).

The 2010 bill was SB 478 (File 607), “An Act Concerning the Estate and Gift Tax, the Hospital Tax and the Attorneys' Occupational Tax.” Among other things, the bill would have eliminated only the state employee exemption. The Finance, Revenue and Bonding Committee reported the bill favorably on April 6, 2010, but it died without debate on the Senate calendar at the end of the 2010 session.