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Highlights Of Budget Deal

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taxes

By The Associated Press
Highlights of the two-year budget deal approved Thursday by the General Assembly’s Finance Revenue and Bonding Committee and Appropriations Committee:
_ Sales tax exemptions are restored for boat services such as storage and repairs, car washes, haircuts, trade-ins for automobiles and discounts received from using coupons.
_ The state’s highest personal income tax rate of 6.7 percent is imposed on more taxpayers.
_ Assumes $2 billion in yet-to-be-resolved labor savings over two years.
_ Sales tax increases from 6 percent to 6.35 percent for most transactions.
_ Raises tax on cigarettes from $3 to $3.40 per pack and 27.5 percent to 50 percent of wholesale price of other tobacco products. Alcohol tax is also increased.
_ Restores annual sales-tax free week.
_ The maximum $500 property tax credit against the personal income tax is reduced to $300. Malloy had proposed its elimination and then requested the $300 figure.
_ Sales tax exemptions would still be eliminated for clothing and footwear under $50, nonprescription drugs, pet grooming services, yoga studios, automotive storage, limousine services, automotive towing services, manicures and pedicures, airport valet parking services, cosmetic surgery services and spa services.
_ The state gasoline and diesel taxes each increase by three cents per gallon.
_ A flat 7 percent luxury tax would be imposed on the entire purchase of luxury goods. It would affect cars starting at $50,000, boats at $100,000, jewelry at $5,000 and clothing at $1,000.
_ A so-called “Amazon tax” would be imposed for online purchase. For example, if someone purchases an item on Amazon.com through a website based in Connecticut, state sales tax must be collected. The proposal also affects other companies that do business through a website in the state.
_ The budget adds $1.1 million in each year for Operation Fuel, a fuel-assistance program for the needy and $1 million in each year for domestic violence shelters.
_ Malloy’s proposed 10 percent surcharge on the corporation tax is increased to 20 percent for income years 2012 and 2013.
_ Ends funding for basic rest areas, typically those with only picnic tables and toilets.
_ The budget expands estimated savings from offender management efforts, such as use of house arrest.

_ Restores $4 million in each year in state education aid to needy Priority School Districts.

Sources: Connecticut Office of Policy and Management, Office of the Governor and Connecticut General Assembly.

     (Copyright 2011 by The Associated Press.  All Rights Reserved.)

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