- Associated Press - Wednesday, June 3, 2015

HARTFORD, Conn. (AP) - Here are highlights of the two-year, $40.3 billion Democratic state budget being considered in the Connecticut Senate:

- Fully exempts federally taxable military retirement pay form the personal income tax. Currently law exempts 50 percent

- Increases marginal income tax rates for incomes more than $500,000 for joint filers and $250,000 to single filers and married people filing separately.

- Increases cigarette tax in two steps, from 3.40 to $3.65 per pack on October 1, 2015 and from $3.65 to $3.90 per pack on July 1, 2016.

- Provides $9 million to 50 unionized nursing homes and $3 million to 180 non-union nursing homes to increase wages and benefits.

- Adds 135 new state employees to the current ranks of approximately 45,644 workers.

- Reduces property tax credit against the income tax from $300 to $200 beginning with income year 2016.

- Increases sales tax rate on luxury items from 7 percent to 7.75 percent. It applies to vehicles costing more than $50,000; jewelry costing more than $5,000; and clothing, handbags, luggage and footwear costing more than $1,000.

- Eliminates sales tax exemption for clothing and footwear costing less than $50 that was scheduled to take effect July 1.

- Eliminates sales tax exemption for non-metered parking in seasonal lots with 30 or more spaces.

- Eliminates sales tax on goods or services purchased by water companies.

- Imposes sales tax on car washing services.

- Limits sales tax exemption for clothing and footwear during sales-tax-free-week to items costing less than $100. It’s currently $300.

- Expands hours that package stores, grocery stores and other locations can sell alcohol by one hour, to 6 p.m. on Sundays and to 10 p.m. the rest of the week.

- Extends 20 percent surcharge on corporate income tax for two more years.

- Allows the Connecticut Lottery Corporation to offer keno to existing lottery vendors and interested bars and restaurants.

- Increases various state license renewal fees.

- Requires companies with a presence in Connecticut and other states to pay tax based on net income of entire operation.

Sources: Connecticut Office of Fiscal Analysis, Connecticut Association of Health Care Facilities.

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