Forced Debit Cards for Taxpayers a Bad Policy, Markley Says

April 8, 2013

Hartford, CT – State Senator Joe Markley (R-Southington) is trying to amend the policy of the Department of Revenue Services which requires that state income tax refunds are made through a debit card. Markley’s bill, SB 157 AN ACT CONCERNING INCOME TAX REFUNDS, would change the general statutes to allow taxpayers to choose to receive refunds either in the form of a check or a debit card.

“I was against this policy change because it came without warning; I’m against it still because it is unfair to taxpayers—it gives us no options,” said Sen. Markley.

The State Department of Revenue Services had advised taxpayers that if you are owed a state refund and opt not to use direct deposit, it will be delivered in the form of debit card rather than check. Nearly half of all refunds in 2011 were made through paper check.

Sen. Markley expressed concern that the shift in policy came too late for some filers. “Those who filed early were never informed of the change and had no chance to consider the options. Additionally, though there are no fees associated with the debit card within the first year, if you don’t cancel the account after a year there is a $1-per-month fee.”

“This policy shift is a convenience to the state but a pain for many taxpayers. Since they’re the ones writing the checks, I think their wishes should be respected,” added Sen. Markley. “If this legislation doesn’t succeed this session, I will be back with it next year.”

Meantime, Connecticut’s Tax Freedom Day – the day on which the state’s citizens stop working for the government and start working for themselves – comes on May 13, 2013, the latest in the nation according to the Tax Foundation.

“Our state’s tax freedom day is eight days later than it was last year, which is truly amazing,” added Sen. Markley.

Here are some of Connecticut’s taxes at a glance as reported by the Tax Foundation:

  • Connecticut’s personal income tax system consists of six brackets and a top rate of 6.7%. That rate ranks 18th highest among states levying an individual income tax. Connecticut’s income tax collections per person were $1617 in 2010 which ranked 4th highest nationally.
  • Connecticut’s corporate income tax system consists of a flat rate of 9%. That rate ranks 6th highest among states levying a corporate income tax. Connecticut’s corporate tax collections per person were $142 in 2010 which ranked 12th highest nationally.
  • Connecticut levies a 6.35% general sales or use tax on consumers, which is above the national median of 6%. Connecticut’s state and local governments collect $881 per person in general sales taxes and $623 per person in excise taxes, for a combined figure of $1505, which ranks 15th highest nationally. Connecticut’s gasoline tax stands at 45¢ (4th highest nationally), while its cigarette tax stands at $3.4 (3rd highest nationally.)
  • Connecticut’s state and local governments collected approximately $2522 per person in property taxes, which ranks 3rd highest nationally.