Taxes are coming!

June 28, 2011

I did not support, or vote for the Governor’s budget this year.

It relied too much on tax increases and not enough on cutting state spending. With that said it is important for all of us to plan ahead.

Here are some important dates to remember.

AUGUST 1ST:

Income Tax:

You will see more money come out of your paycheck to make up for the income tax increase that is retroactive to January 1, 2011.

The inheritance tax has also been increased and will be retroactive to January 1, 2011 as well. Be sure to check with your tax preparer.

To see the revised withholding tables click here [PDF].

WHEN YOU FILE NEXT TAX SEASON:

Property Tax Credit:

The property tax credit is reduced from $500 to $300.

JULY 1ST

Sales and Use Taxes:

  • The general sales and use tax rate increases from 6% to 6.35%;
  • The room occupancy tax increases from 12% to 15%;
  • Renting or leasing of a car for 30 days or less increases to 9.35%;
  • Luxury tax of 7% for cars more than $50,000, boats more than $100,000, jewelry more than $5,000, clothing or footwear, handbag, luggage, umbrella, wallet or watch more than $1,000.

Service Taxes:

  • Valet parking provided at any airport;
  • Yoga instruction provided at a yoga studio;
  • Motor vehicle storage services;
  • Packing and crating services;
  • Motor vehicle towing and road services;
    livery services;
  • Pet grooming, pet boarding services, and pet obedience services;
  • Services in connection with a cosmetic medical procedure;
  • Manicure services, pedicure services and all other nail services; and
    Spa services.

New Taxes:

  • Clothing and footwear under $50;
  • Nonprescription drugs and medicines, and smoking cessation products; and
  • Cloth or fabric for noncommercial sewing, and yarn for noncommercial use.

Additional Taxes:

  • Cigarette tax will increase to $3.40 per pack.
  • Cigar tax will be $.50 cents per cigar.
  • Alcoholic beverage tax will increase by 20%.

It is my hope that in the months to come we can get a jobs package together that will benefit all of Connecticut. We should not be relying on more taxes, to balance the state budget. We should be putting people back to work.

Tony