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General Assembly Raised Bill No. 7176
January Session, 2025
LCO No. 4527
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING SALES AND USE TAXES RELATED TO
CERTAIN VEHICLES AND AIRCRAFT INDUSTRY JOINT VENTURES,
THE DEDICATION OF A PORTION OF THE MEALS TAX REVENUE
AND THE DUES TAX THRESHOLD.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subdivision (1) of section 12-408 of the general statutes is 1
repealed and the following is substituted in lieu thereof (Effective July 1, 2
2025, and applicable to sales occurring on or after July 1, 2025): 3
(1) (A) For the privilege of making any sales, as defined in 4
subdivision (2) of subsection (a) of section 12-407, at retail, in this state 5
for a consideration, a tax is hereby imposed on all retailers at the rate of 6
six and thirty-five-hundredths per cent of the gross receipts of any 7
retailer from the sale of all tangible personal property sold at retail or 8
from the rendering of any services constituting a sale in accordance with 9
subdivision (2) of subsection (a) of section 12-407, except, in lieu of said 10
rate, the rates provided in subparagraphs (B) to (I), inclusive, of this 11
subdivision; 12
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(B) (i) At a rate of fifteen per cent with respect to each transfer of 13
occupancy, from the total amount of rent received by a hotel or lodging 14
house for the first period not exceeding thirty consecutive calendar 15
days; 16
(ii) At a rate of eleven per cent with respect to each transfer of 17
occupancy, from the total amount of rent received by a bed and 18
breakfast establishment for the first period not exceeding thirty 19
consecutive calendar days; 20
(C) With respect to the sale of a motor vehicle to any individual who 21
is a member of the armed forces of the United States and is on full-time 22
active duty in Connecticut and who is considered, under 50 App USC 23
574, a resident of another state, or to any such individual and the spouse 24
thereof, at a rate of four and one-half per cent of the gross receipts of any 25
retailer from such sales, provided such retailer requires and maintains a 26
declaration by such individual, prescribed as to form by the 27
commissioner and bearing notice to the effect that false statements made 28
in such declaration are punishable, or other evidence, satisfactory to the 29
commissioner, concerning the purchaser's state of residence under 50 30
App USC 574; 31
(D) (i) With respect to the sales of computer and data processing 32
services occurring on or after July 1, 2001, at the rate of one per cent, and 33
(ii) with respect to sales of Internet access services, on and after July 1, 34
2001, such services shall be exempt from such tax; 35
(E) (i) With respect to the sales of labor that is otherwise taxable under 36
subparagraph (C) or (G) of subdivision (2) of subsection (a) of section 37
12-407 on existing vessels and repair or maintenance services on vessels 38
occurring on and after July 1, 1999, such services shall be exempt from 39
such tax; 40
(ii) With respect to the sale of a vessel, a motor for a vessel or a trailer 41
used for transporting a vessel, at the rate of two and ninety-nine-42
hundredths per cent, except that the sale of a vessel shall be exempt from 43
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such tax if such vessel is docked in this state for sixty or fewer days in a 44
calendar year; 45
(iii) With respect to the sale of dyed diesel fuel, as defined in 46
subsection (d) of section 12-487, sold by a marine fuel dock exclusively 47
for marine purposes, at the rate of two and ninety-nine-hundredths per 48
cent; 49
(F) With respect to patient care services for which payment is 50
received by the hospital on or after July 1, 1999, and prior to July 1, 2001, 51
at the rate of five and three-fourths per cent and on and after July 1, 2001, 52
such services shall be exempt from such tax; 53
(G) With respect to the rental or leasing of a passenger motor vehicle 54
for a period of thirty consecutive calendar days or less, at a rate of nine 55
and thirty-five-hundredths per cent; 56
(H) With respect to the sale of (i) a motor vehicle for a sales price 57
exceeding [fifty] seventy-five thousand dollars, at a rate of seven and 58
three-fourths per cent on the entire sales price, (ii) jewelry, whether real 59
or imitation, for a sales price exceeding five thousand dollars, at a rate 60
of seven and three-fourths per cent on the entire sales price, and (iii) an 61
article of clothing or footwear intended to be worn on or about the 62
human body, a handbag, luggage, umbrella, wallet or watch for a sales 63
price exceeding one thousand dollars, at a rate of seven and three-64
fourths per cent on the entire sales price. For purposes of this 65
subparagraph, "motor vehicle" has the meaning provided in section 14-66
1, but does not include a motor vehicle subject to the provisions of 67
subparagraph (C) of this subdivision, a motor vehicle having a gross 68
vehicle weight rating over twelve thousand five hundred pounds, or a 69
motor vehicle having a gross vehicle weight rating of twelve thousand 70
five hundred pounds or less that is not used for private passenger 71
purposes, but is designed or used to transport merchandise, freight or 72
persons in connection with any business enterprise and issued a 73
commercial registration or more specific type of registration by the 74
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Department of Motor Vehicles; 75
(I) With respect to the sale of meals, as defined in subdivision (13) of 76
section 12-412, sold by an eating establishment, caterer or grocery store; 77
and spirituous, malt or vinous liquors, soft drinks, sodas or beverages 78
such as are ordinarily dispensed at bars and soda fountains, or in 79
connection therewith; in addition to the tax imposed under 80
subparagraph (A) of this subdivision, at the rate of one per cent; 81
(J) The rate of tax imposed by this chapter shall be applicable to all 82
retail sales upon the effective date of such rate, except that a new rate 83
that represents an increase in the rate applicable to the sale shall not 84
apply to any sales transaction wherein a binding sales contract without 85
an escalator clause has been entered into prior to the effective date of the 86
new rate and delivery is made within ninety days after the effective date 87
of the new rate. For the purposes of payment of the tax imposed under 88
this section, any retailer of services taxable under subdivision (37) of 89
subsection (a) of section 12-407, who computes taxable income, for 90
purposes of taxation under the Internal Revenue Code of 1986, or any 91
subsequent corresponding internal revenue code of the United States, 92
as amended from time to time, on an accounting basis that recognizes 93
only cash or other valuable consideration actually received as income 94
and who is liable for such tax only due to the rendering of such services 95
may make payments related to such tax for the period during which 96
such income is received, without penalty or interest, without regard to 97
when such service is rendered; 98
(K) (i) For calendar quarters ending on or after September 30, 2019, 99
the commissioner shall deposit into the regional planning incentive 100
account, established pursuant to section 4-66k, six and seven-tenths per 101
cent of the amounts received by the state from the tax imposed under 102
subparagraph (B) of this subdivision and ten and seven-tenths per cent 103
of the amounts received by the state from the tax imposed under 104
subparagraph (G) of this subdivision; 105
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(ii) [For calendar quarters ending on or after September 30, 2018, the] 106
The commissioner shall deposit into the Tourism Fund established 107
under section 10-395b: (I) For calendar quarters ending on or after 108
September 30, 2018, ten per cent of the amounts received by the state 109
from the tax imposed under subparagraph (B) of this subdivision; and 110
(II) for calendar quarters ending on or after September 30, 2025, fifty per 111
cent of the amounts received by the state from the tax imposed under 112
subparagraph (I) of this subdivision; 113
(L) (i) For calendar months commencing on or after July 1, 2021, but 114
prior to July 1, 2023, the commissioner shall deposit into the municipal 115
revenue sharing account established pursuant to section 4-66l seven and 116
nine-tenths per cent of the amounts received by the state from the tax 117
imposed under subparagraph (A) of this subdivision, including such 118
amounts received on or after July 1, 2023, attributable to the fiscal year 119
ending June 30, 2023; and 120
(ii) For calendar months commencing on or after July 1, 2023, the 121
commissioner shall deposit into the Municipal Revenue Sharing Fund 122
established pursuant to section 4-66p seven and nine-tenths per cent of 123
the amounts received by the state from the tax imposed under 124
subparagraph (A) of this subdivision; and 125
(M) (i) For calendar months commencing on or after July 1, 2017, the 126
commissioner shall deposit into the Special Transportation Fund 127
established under section 13b-68 seven and nine-tenths per cent of the 128
amounts received by the state from the tax imposed under 129
subparagraph (A) of this subdivision; 130
(ii) For calendar months commencing on or after July 1, 2018, but 131
prior to July 1, 2019, the commissioner shall deposit into the Special 132
Transportation Fund established under section 13b-68 eight per cent of 133
the amounts received by the state from the tax imposed under 134
subparagraphs (A) and (H) of this subdivision on the sale of a motor 135
vehicle; 136
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(iii) For calendar months commencing on or after July 1, 2019, but 137
prior to July 1, 2020, the commissioner shall deposit into the Special 138
Transportation Fund established under section 13b-68 seventeen per 139
cent of the amounts received by the state from the tax imposed under 140
subparagraphs (A) and (H) of this subdivision on the sale of a motor 141
vehicle; 142
(iv) For calendar months commencing on or after July 1, 2020, but 143
prior to July 1, 2021, the commissioner shall deposit into the Special 144
Transportation Fund established under section 13b-68 twenty-five per 145
cent of the amounts received by the state from the tax imposed under 146
subparagraphs (A) and (H) of this subdivision on the sale of a motor 147
vehicle; 148
(v) For calendar months commencing on or after July 1, 2021, but 149
prior to July 1, 2022, the commissioner shall deposit into the Special 150
Transportation Fund established under section 13b-68 seventy-five per 151
cent of the amounts received by the state from the tax imposed under 152
subparagraphs (A) and (H) of this subdivision on the sale of a motor 153
vehicle; and 154
(vi) For calendar months commencing on or after July 1, 2022, the 155
commissioner shall deposit into the Special Transportation Fund 156
established under section 13b-68 one hundred per cent of the amounts 157
received by the state from the tax imposed under subparagraphs (A) 158
and (H) of this subdivision on the sale of a motor vehicle. 159
Sec. 2. Subdivision (1) of section 12-411 of the general statutes is 160
repealed and the following is substituted in lieu thereof (Effective July 1, 161
2025, and applicable to sales occurring on or after July 1, 2025): 162
(1) (A) An excise tax is hereby imposed on the storage, acceptance, 163
consumption or any other use in this state of tangible personal property 164
purchased from any retailer for storage, acceptance, consumption or any 165
other use in this state, the acceptance or receipt of any services 166
constituting a sale in accordance with subdivision (2) of subsection (a) 167
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of section 12-407, purchased from any retailer for consumption or use in 168
this state, or the storage, acceptance, consumption or any other use in 169
this state of tangible personal property which has been manufactured, 170
fabricated, assembled or processed from materials by a person, either 171
within or without this state, for storage, acceptance, consumption or any 172
other use by such person in this state, to be measured by the sales price 173
of materials, at the rate of six and thirty-five-hundredths per cent of the 174
sales price of such property or services, except, in lieu of said rate, [:] the 175
rates provided in subparagraphs (B) to (I), inclusive, of this subdivision; 176
(B) (i) At a rate of fifteen per cent of the rent paid to a hotel or lodging 177
house for the first period not exceeding thirty consecutive calendar 178
days; 179
(ii) At a rate of eleven per cent of the rent paid to a bed and breakfast 180
establishment for the first period not exceeding thirty consecutive 181
calendar days; 182
(C) With respect to the storage, acceptance, consumption or use in 183
this state of a motor vehicle purchased from any retailer for storage, 184
acceptance, consumption or use in this state by any individual who is a 185
member of the armed forces of the United States and is on full-time 186
active duty in Connecticut and who is considered, under 50 App USC 187
574, a resident of another state, or to any such individual and the spouse 188
of such individual at a rate of four and one-half per cent of the sales price 189
of such vehicle, provided such retailer requires and maintains a 190
declaration by such individual, prescribed as to form by the 191
commissioner and bearing notice to the effect that false statements made 192
in such declaration are punishable, or other evidence, satisfactory to the 193
commissioner, concerning the purchaser's state of residence under 50 194
App USC 574; 195
(D) (i) With respect to the acceptance or receipt in this state of labor 196
that is otherwise taxable under subparagraph (C) or (G) of subdivision 197
(2) of subsection (a) of section 12-407 on existing vessels and repair or 198
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maintenance services on vessels occurring on and after July 1, 1999, such 199
services shall be exempt from such tax; 200
(ii) (I) With respect to the storage, acceptance or other use of a vessel 201
in this state, at the rate of two and ninety-nine-hundredths per cent, 202
except that such storage, acceptance or other use shall be exempt from 203
such tax if such vessel is docked in this state for sixty or fewer days in a 204
calendar year; 205
(II) With respect to the storage, acceptance or other use of a motor for 206
a vessel or a trailer used for transporting a vessel in this state, at the rate 207
of two and ninety-nine-hundredths per cent; 208
(III) With respect to the storage, acceptance or other use of dyed diesel 209
fuel, as defined in subsection (d) of section 12-487, exclusively for 210
marine purposes, at the rate of two and ninety-nine-hundredths per 211
cent; 212
(E) (i) With respect to the acceptance or receipt in this state of 213
computer and data processing services purchased from any retailer for 214
consumption or use in this state occurring on or after July 1, 2001, at the 215
rate of one per cent of such services, and (ii) with respect to the 216
acceptance or receipt in this state of Internet access services, on and after 217
July 1, 2001, such services shall be exempt from such tax; 218
(F) With respect to the acceptance or receipt in this state of patient 219
care services purchased from any retailer for consumption or use in this 220
state for which payment is received by the hospital on or after July 1, 221
1999, and prior to July 1, 2001, at the rate of five and three-fourths per 222
cent and on and after July 1, 2001, such services shall be exempt from 223
such tax; 224
(G) With respect to the rental or leasing of a passenger motor vehicle 225
for a period of thirty consecutive calendar days or less, at a rate of nine 226
and thirty-five-hundredths per cent; 227
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(H) With respect to the acceptance or receipt in this state of (i) a motor 228
vehicle for a sales price exceeding [fifty] seventy-five thousand dollars, 229
at a rate of seven and three-fourths per cent on the entire sales price, (ii) 230
jewelry, whether real or imitation, for a sales price exceeding five 231
thousand dollars, at a rate of seven and three-fourths per cent on the 232
entire sales price, and (iii) an article of clothing or footwear intended to 233
be worn on or about the human body, a handbag, luggage, umbrella, 234
wallet or watch for a sales price exceeding one thousand dollars, at a 235
rate of seven and three-fourths per cent on the entire sales price. For 236
purposes of this subparagraph, "motor vehicle" has the meaning 237
provided in section 14-1, but does not include a motor vehicle subject to 238
the provisions of subparagraph (C) of this subdivision, a motor vehicle 239
having a gross vehicle weight rating over twelve thousand five hundred 240
pounds, or a motor vehicle having a gross vehicle weight rating of 241
twelve thousand five hundred pounds or less that is not used for private 242
passenger purposes, but is designed or used to transport merchandise, 243
freight or persons in connection with any business enterprise and issued 244
a commercial registration or more specific type of registration by the 245
Department of Motor Vehicles; 246
(I) With respect to the acceptance or receipt in this state of meals, as 247
defined in subdivision (13) of section 12-412, sold by an eating 248
establishment, caterer or grocery store; and spirituous, malt or vinous 249
liquors, soft drinks, sodas or beverages such as are ordinarily dispensed 250
at bars and soda fountains, or in connection therewith; in addition to the 251
tax imposed under subparagraph (A) of this subdivision, at the rate of 252
one per cent; 253
(J) (i) For calendar quarters ending on or after September 30, 2019, the 254
commissioner shall deposit into the regional planning incentive 255
account, established pursuant to section 4-66k, six and seven-tenths per 256
cent of the amounts received by the state from the tax imposed under 257
subparagraph (B) of this subdivision and ten and seven-tenths per cent 258
of the amounts received by the state from the tax imposed under 259
subparagraph (G) of this subdivision; 260
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(ii) [For calendar quarters ending on or after September 30, 2018, the] 261
The commissioner shall deposit into the Tourism Fund established 262
under section 10-395b: (I) For calendar quarters ending on or after 263
September 30, 2018, ten per cent of the amounts received by the state 264
from the tax imposed under subparagraph (B) of this subdivision; and 265
(II) for calendar quarters ending on or after September 30, 2025, fifty per 266
cent of the amounts received by the state from the tax imposed under 267
subparagraph (I) of this subdivision; 268
(K) (i) For calendar months commencing on or after July 1, 2021, but 269
prior to July 1, 2023, the commissioner shall deposit into the municipal 270
revenue sharing account established pursuant to section 4-66l seven and 271
nine-tenths per cent of the amounts received by the state from the tax 272
imposed under subparagraph (A) of this subdivision, including such 273
amounts received on or after July 1, 2023, attributable to the fiscal year 274
ending June 30, 2023; and 275
(ii) For calendar months commencing on or after July 1, 2023, the 276
commissioner shall deposit into the Municipal Revenue Sharing Fund 277
established pursuant to section 4-66p seven and nine-tenths per cent of 278
the amounts received by the state from the tax imposed under 279
subparagraph (A) of this subdivision; and 280
(L) (i) For calendar months commencing on or after July 1, 2017, the 281
commissioner shall deposit into said Special Transportation Fund seven 282
and nine-tenths per cent of the amounts received by the state from the 283
tax imposed under subparagraph (A) of this subdivision; 284
(ii) For calendar months commencing on or after July 1, 2018, but 285
prior to July 1, 2019, the commissioner shall deposit into the Special 286
Transportation Fund established under section 13b-68 eight per cent of 287
the amounts received by the state from the tax imposed under 288
subparagraphs (A) and (H) of this subdivision on the acceptance or 289
receipt in this state of a motor vehicle; 290
(iii) For calendar months commencing on or after July 1, 2019, but 291
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prior to July 1, 2020, the commissioner shall deposit into the Special 292
Transportation Fund established under section 13b-68 seventeen per 293
cent of the amounts received by the state from the tax imposed under 294
subparagraphs (A) and (H) of this subdivision on the acceptance or 295
receipt in this state of a motor vehicle; 296
(iv) For calendar months commencing on or after July 1, 2020, but 297
prior to July 1, 2021, the commissioner shall deposit into the Special 298
Transportation Fund established under section 13b-68 twenty-five per 299
cent of the amounts received by the state from the tax imposed under 300
subparagraphs (A) and (H) of this subdivision on the acceptance or 301
receipt in this state of a motor vehicle; 302
(v) For calendar months commencing on or after July 1, 2021, but 303
prior to July 1, 2022, the commissioner shall deposit into the Special 304
Transportation Fund established under section 13b-68 seventy-five per 305
cent of the amounts received by the state from the tax imposed under 306
subparagraphs (A) and (H) of this subdivision on the acceptance or 307
receipt in this state of a motor vehicle; and 308
(vi) For calendar months commencing on or after July 1, 2022, the 309
commissioner shall deposit into the Special Transportation Fund 310
established under section 13b-68 one hundred per cent of the amounts 311
received by the state from the tax imposed under subparagraphs (A) 312
and (H) of this subdivision on the acceptance or receipt in this state of a 313
motor vehicle. 314
Sec. 3. Subdivision (58) of section 12-412 of the general statutes is 315
repealed and the following is substituted in lieu thereof (Effective July 1, 316
2025): 317
(58) (A) Sales of any services rendered for purposes of (i) personnel 318
services, (ii) commercial or industrial marketing, development, testing 319
or research services, or (iii) business analysis and management services, 320
whenever, pursuant to a joint venture agreement, the recipient of any 321
such services is either a corporation, a partnership, or a limited liability 322
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company, and such services are rendered by one or more corporate 323
shareholders, or a corporate partner or corporate member in such joint 324
venture, and in accordance with which, except as provided in 325
subparagraph (B) of this subdivision, the company rendering such 326
service must have an ownership interest equivalent to not less than 327
twenty-five per cent of total ownership in such joint venture, provided 328
(I) the purpose of such joint venture is directly related to production or 329
development of new or experimental products or systems and the 330
marketing and support thereof, (II) at least one of the corporations 331
participating in such joint venture shall have been actively engaged in 332
business in this state for not less than ten years, and (III) exemption for 333
such sales in accordance with this subsection, with respect to any single 334
joint venture, shall not be allowed for a period in excess of twenty 335
consecutive years from the date of such venture's incorporation, 336
formation or organization, or in the case of a joint venture in existence 337
prior to January 1, 1986, within the aircraft industry, for a period in 338
excess of [forty] fifty consecutive years, and such exemption shall be 339
applicable to sales of such services rendered on or after January 1, 1986. 340
(B) In the case of a joint venture in the aircraft industry, the ownership 341
interest percentage of each participant in such joint venture shall be 342
equal to the aggregate ownership interest percentage owned directly or 343
indirectly by every participant in such venture that is a related member, 344
as defined in subsection (a) of section 12-218c. 345
Sec. 4. Section 12-412 of the general statutes is amended by adding 346
subdivision (127) as follows (Effective July 1, 2025, and applicable to sales 347
occurring on or after July 1, 2025): 348
(NEW) (127) Sales of and the storage, use or other consumption of (A) 349
any ambulance-type motor vehicle used exclusively to transport any 350
medically incapacitated individual, except any such vehicle used to 351
transport any such individual for payment, and (B) any ambulance 352
operating under a license or certificate issued in accordance with the 353
provisions of section 19a-180. 354
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Sec. 5. Section 12-543 of the general statutes is repealed and the 355
following is substituted in lieu thereof (Effective July 1, 2025): 356
(a) There is hereby imposed a tax equivalent to ten per cent of any 357
amount paid as dues or initiation fees to any social, athletic or sporting 358
club. Such tax shall be imposed upon the club receiving such amounts. 359
Reimbursement for such tax shall be collected by the club from the 360
member. Such reimbursement, termed "tax", shall be paid by the 361
member to the club charging the dues or initiation fees. Such tax when 362
added to the amounts charged shall be a debt from the member to the 363
club charging such amounts and shall be recoverable at law. The 364
amount of tax reimbursement, when so collected, shall be deemed to be 365
a special fund in trust for the state. [of Connecticut.] 366
(b) The following shall be exempt from the dues tax: 367
(1) A club [shall be exempt from the dues tax] if the annual dues of a 368
member enjoying full privileges and any initiation fee required of such 369
a member are each [one hundred] two hundred fifty dollars or less; [.] 370
(2) A club sponsored and controlled by a charitable or religious 371
organization, a governmental agency or a nonprofit educational 372
institution; [shall be exempt from the dues tax.] 373
(3) Any society, order or association operating under the lodge 374
system or any local fraternal organization among students of a college 375
or university; [shall be exempt from the dues tax.] and 376
(4) Lawn bowling clubs. [shall be exempt from the dues tax.] 377
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025, and
applicable to sales
occurring on or after July
1, 2025
12-408(1)
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Sec. 2 July 1, 2025, and
applicable to sales
occurring on or after July
1, 2025
12-411(1)
Sec. 3 July 1, 2025 12-412(58)
Sec. 4 July 1, 2025, and
applicable to sales
occurring on or after July
1, 2025
12-412(127)
Sec. 5 July 1, 2025 12-543
Statement of Purpose:
To (1) increase the sales price threshold of motor vehicles subject to a
higher sales and use taxes rate, (2) dedicate a portion of the revenue
generated from the meals tax to the Tourism Fund, (3) extend a sales
and use taxes exemption for certain joint ventures within the aircraft
industry, (4) exempt from the sales and use taxes the sale of and the
storage, use or other consumption in this state of ambulance-type motor
vehicles and ambulances, and (5) increase the threshold for imposition
of the dues tax.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]