New Laws, New Taxes Take Effect July 1
Recently passed state laws -- including a bevy of new Connecticut taxes -- are set to take effect on the first day of July.
They were a busy bunch in Hartford this year.
During the 5-month-long 2011 legislative session, the General Assembly passed a wide range of bills changing the rules on everything from finance and taxation to social policy. With the first Democratic governor in 20 years and a Democratic majority in the statehouse, it proved to be one of the busiest sessions in recent years.
It also proved to be one of the most expensive for state residents: Lawmakers enacted the largest tax increase in the state’s history.
Some of the headline-grabbing laws won’t actually go into effect until Oct. 1 at the earliest. Here, Patch takes a look at the interesting, consequential and polarizing acts slated to go into effect on July 1.
BIGGEST IMPACT
The Budget. The General Assembly passed a $40.1 billion budget. It contains $1.4 billion in tax increases, about $800 million in spending cuts, and $1.6 billion in union concessions. But last week, the union membership failed to ratify the concessions deal and the governor called a special session of the legislature for Thursday so the state can approve a budget by start of fiscal year on July 1.
Sales and Use Taxes. People will soon face a myriad of new and increased taxes. Here they are in no particular order:
- The general sales and use tax rate increases from 6 to 6.35 percent;
- The room occupancy tax increases from 12 to 15 percent;
- Tax on renting or leasing a car for 30 days or less increases to 9.35 percent;
- Luxury tax of 7 percent for cars purchased for 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;
- Valet parking provided at any airport will now be taxed;
- Yoga instruction provided at a yoga studio will now be taxed;
- Motor vehicle storage services will now be taxed;
- Packing and crating services will now be taxed;
- Motor vehicle towing and road services; livery services will now be taxed;
- Pet grooming, pet boarding services, and pet obedience services will now be taxed;
- Services in connection with a cosmetic medical procedure will now be taxed;
- Manicure services, pedicure services and all other nail and spa services will now be taxed;
- Clothing and footwear under $50 will now be taxed;
- Nonprescription drugs and medicines, and smoking-cessation products will now be taxed; and
- Cloth or fabric for noncommercial sewing, and yarn for noncommercial use, will now be taxed.
Diesel Tax. At 46 cents, Connecticut now has the highest diesel tax in the nation. Some worry truckers will fill up at the border, zoom through and leave Connecticut diesel users to foot the bill.
Sin Taxes. Cigarette taxes are rising 40 cents a pack and the alcoholic beverage tax increases by 20 percent.
INTERESTING
Bosnian Affairs Commission. The commission shall consist of 21 members. To focus on ensuring the Bosnian American population of the state are healthy, safe, achieve educational success, are economically self-sufficient, and free from discrimination.
Divesting from Iran. The state treasurer will look at the state’s holdings in companies doing business with Iran and the Sudan and encourage those businesses to divest.
Dairy-Aid. Legislators made permanent the agricultural sustainability account established in 2009, which supports a grant program for dairy farmers. The same law also makes permanent a $10 increase (from $30 to $40) in the fee people pay when filing documents with town clerks and credits $10 of each fee to the agricultural sustainability account.
Thermal Receipt Ban. A ban on Bisphenol-A, or BPA, an ingredient used in thermal receipt paper. So when you're paying more taxes at the pump, know that the receipt coming out of the machine is free of cancer-causing substances.
Paint Stewardship. Connecticut is the third state in the nation to require paint manufacturers to safely manage leftover latex and oil-based paint from households and painting contractors. There will be more and better recycling opportunities for architectural paint.
POLARIZING
In-State Tuition for Undocumented Immigrants. Undocumented immigrants who are residents of Connecticut and graduated from a Connecticut high school are eligible for in-state tuition status. They must file an affidavit with the college stating they are in the process of legalizing their immigration status or their intention to do so as soon as they can apply.
Good behavior. This law permits the Department of Correction commissioner to reduce an inmate’s maximum prison sentence and make inmates eligible for early release from prison for good behavior. Only inmates convicted of the following crimes are ineligible for the credits: murder, capital felony, felony murder, arson murder, home invasion, and 1st-degree aggravated assault. That means rapists and sex offenders are eligible for the initiative.
Marijuana Possession. This decriminalizes adult possession of up to a half-ounce of marijuana. If caught with less than the said amount, it’s a non-criminal infraction punishable by a fine, no jail, and no criminal record.
No New Hookah Lounges. The state is still moving toward a total ban on hookah lounges, but in the meantime it has banned new hookah lounges, where customers share flavored tobacco smoked from a common pipe.
Paid Sick Leave. Connecticut became the first state in the nation to require paid sick leave to certain private-service workers. Employers with 50 or more employees must provide paid sick leave at a rate of one hour per 40 hours worked.
“Amazon” Tax. Certain remote sellers, including such online retailers as Amazon.com and Overstock.com, who have no physical presence in Connecticut, must now collect sales tax on their taxable sales in the state. The requirement applies to sellers who pay commissions to people located in Connecticut to refer customers to them.
PUBLIC SAFETY
Cell Phone Fine Increase. Using a cell phone or texting while driving just got more expensive. First-time offenders will now be fined $125, up from $100; a second offense means an increase from $150 to $250, and for subsequent offenses from $200 to $400. Anyone caught texting while driving a commercial motor vehicle could be disqualified from operating a commercial motor vehicle. But it allows texting from these vehicles in an emergency.
Boating Under the Influence. Friends don’t let friends boat drunk. Effective July 1, a conviction for reckless boating results in the suspension of a person's boating rights. Police are now allowed to administer a second breathalyzer test within 10 minutes rather than 30 minutes.
School Bullying and Cyberbullying. This bill specifically bans bullying based on a student's actual or perceived “differentiating” characteristics, such as race, gender, sexual orientation or physical appearance. It also prohibits “cyberbullying” -- bullying using electronic communications or devices.
Norm Carlson
11:30 am on Monday, June 27, 2011
With the new tax at 6.35 percent does that mean that on a one dollar purchase the tax is rounded up to
be 7 cents since we don't have the currency to pay 6.35 cent tax on one dollar. This looks like the scam the gas industry does by advertizing one price the charging the rounded up price. I am tired of not being able to pay for things at the advertized prices.
R Eleveld
4:41 pm on Monday, June 27, 2011
I will presume you are correct. So at $3 the tax is $0.1905, at 2.99 it is $0.1898.
I believe the $0.009 gas issue is a State tax construct, not a gas dealer creation. The site below indicates: 25 cents in gasoline tax, and 39.6 cents in diesel tax, and 26.9 cents in "Other Taxes". "“Other Taxes” column for gasoline includes gross receipts earnings tax collected at the wholesale level." [http://www.connecticutgasprices.com/tax_info.aspx]
Do you think truckers will buy gas in CT? Would you if you can save real money considering these trucks load up on hundreds of gallons at a time. Consider New York's Diesel tax is 8 cents, or Rhode Island at 32 cent, or Massachusetts at 21 cents. Granted this does not include the "other" taxes that are also due... check the captioned website.
janet
12:05 pm on Monday, June 27, 2011
The sick day pay is just a jobs killer. Now resturarnts and bars will no longer have more than 50 employees and those that do will not give their employees the hrs required to have to provide sick pay. The amazon tax will kill small businesses and home based businesses since Amazon and Overstock, etc will no longer do business with CT. The in-state tuition for ILLEGALS is just that ILLEGAL. Looks like the libs have really sealed CT grave. As soon as I retire I am out. How about passing a bill making all state employees who retire have to remain in CT so their full pay pensions can be used to pay all these stupid tax increases. Charging taxes on clothes under 50 bucks hurts the poor. Mass is looking better every day. Cheaper gas, no liquor tax, no tax on clothes!
R Eleveld
4:49 pm on Monday, June 27, 2011
Part timers are covered by this measure as I read it. The book keeping will be onerous since it is 1 to 40 ratio. It will increase payroll costs 3-5% and that equates to higher menu prices.
The "Amazon Tax" has already caused some CT companies to be persona non grata. They either leave CT or get rid of employees. Which will it be, both are bad for CT.
I think in-state tuition should be for legal in-state residents. However, I can make a very good argument for the law on a demographics/economics basis.
Drat, another leaving the state. Please do not leave me alone, I can't afford to pay for everything!!!!!!!!!!
That is an novel idea, If you are a State employee and live elsewhere you receive a 10% cut in your pension to live in the south... you will still be better off, and we in CT will be a little better off.
I wrote about taxes hurting the poor the most in a blog entry: Taxes effect the poor much more than the wealthy.... [http://windsor.patch.com/blog_posts/taxes-effect-the-poor-much-more-than-the-wealthy]
Scott Wilhelmi
2:04 pm on Friday, July 1, 2011
Another state committing suicide. Enjoy the lost jobs and lower standard of living Connecticut. You can now join California, New York, Michigan and Illinois as states in decline. Taxation has NEVER led to prosperity.
R Eleveld
10:41 am on Saturday, July 2, 2011
Let's save some money and rethink government!
Since mowing is a function of the Highway department. I am sure the total cost of mowing done by the private sector would be less than the State. Repair work on our roads is an ongoing issue, and that would be a better value proposition for the taxpayers.
Why not let AAA, if they were willing, handle other simple elements of the DMV process? We can also look at outsourcing aspects of the operation as with any in the state. Only certain State employees know how to process paper?
Department of Education, we have a federal department that does not educate I would guess a single child. Why do we need it? It is and should be the State's responsibility to run education. Provide state block grants and let the State level education departments do the job as the State sees fit! If a state wants to score low on national tests it is the states prerogative. We are after all a Republic and need to stop baby sitting every person.
We can look at every quasi organization in the state that employs 10's of thousands of people also for what purpose? Do we really need some of these organization, why can't they be converted to a 'for profit' business. The Lottery can be run like an 'enterprise fund'... and the profits go to the state. Novel idea.
The Insurance and Banking Departments should be able to make the State a 'profit'. 2 more enterprise funds, and why 4 'higher educ' incl. Uconn departments?
I can go on...