CT Senate Republicans Call for Sales Tax Reduction

January 4, 2022

Senate Republicans Offer Proposal to Provide Relief to Working- and Middle-Class Families as Inflation Surges

 

 

SIGN THE PETITION: Cut the CT Sales Tax. Families Need Relief.

 

HARTFORD – Connecticut Senate Republican lawmakers are calling on the state legislature to temporarily reduce the Connecticut sales tax rate to provide relief to families being crushed by surging inflation.

 

“Connecticut’s state budget is benefitting from inflation as the state sales tax and gas tax brings in new, unplanned for revenue – a result of surging prices. Meanwhile, CT residents are struggling to balance their own family budgets with no relief in sight as inflation drives up the costs of everything, from food to energy to home heating oil,” said Senate Republican Leader Kevin Kelly (R-Stratford).

 

“Senate Republicans want to direct the influx in tax revenue back to residents and provide immediate relief from the crushing impact of inflation,” said Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme).

 

Senate Republicans are proposing to reduce the sales tax from 6.35% to 5.99% and eliminate the additional 1% meals tax from February 15 through the end of calendar year 2022.

“We want to help working- and middle-class families when it comes to kitchen table economics and reduce every day financial strains that make it harder and harder to budget for a family,” said Sen. Kelly.

 

The proposal will result is a temporary tax reduction totaling $315.1 million ($132.3 million in FY 22 and $182.8 million in FY 23) during the difficult months ahead.

 

Senate Republicans emphasized that this is just the beginning of the policies Connecticut must advance to make our state more affordable, address burdens, and provide relief during tough times.

 

The state budget remains whole even with this tax reduction. The state budget is in surplus and is already directing a record amount of excess revenue to pay down on the state’s pension debt, a policy adopted in the 2017 bipartisan budget. Connecticut is expected to collect over $155.2 million more in state sales tax revenue than originally projected in fiscal year 2022 and $144.6 million more in fiscal year 2023. In addition, CT is expected to collect over $20 million more in gross receipts tax revenue (one of the state’s gas taxes) than originally projected in fiscal year 2022 and $25.6 million more in fiscal year 2023.

 

Connecticut can afford the proposed tax cut with the additional sales tax revenue and gross receipts tax revenue collected by the state as a result of surging inflation to provide a temporary sales tax reduction during this difficult time.

 

“The growth in these revenues above and beyond the revenue already counted on in the state budget will allow for nearly a full year of a sales tax reduction, giving families substantial relief to get through the most difficult months ahead,” said Sen. Kelly.

 

Read the plan.

Proposal overview:

  • Decrease the sales tax from 6.35% to 5.99% from February 15 through the end of calendar year 2022.Reduction would only apply to the sales tax that is at the 6.35% rate (e.g., no reduction to the 7.75% “luxury” rate for motor vehicles over $50,000 or jewelry over $5,000).
  • Eliminate the meals tax surcharge from February 15 through the end of calendar year 2022.The meals tax surcharge is one percent added to the base 6.35% sales tax rate. It applies to meals at restaurants and prepared foods sold at supermarkets and grocery stores.