Researcher: SM Page 1 3/10/25
OLR Bill Analysis
SB 1262
AN ACT REDUCING THE SALES AND USE TAXES FOR CERTAIN
GOODS USED IN NEW HOUSING CONSTRUCTION.
SUMMARY
Existing law imposes a 6.35% sales and use tax, with some exceptions,
on tangible personal property and select services purchased in the state
or purchased outside the state for use in Connecticut. This bill decreases
the sales and use tax rate to 3% for tangible personal property purchased
to build a new residential development project with at least (1) 50
dwelling units of affordable housing (see below) or (2) 20% of its units
comprised of affordable housing. It also makes a conforming change (§
3).
Under the bill, the 3% rate does not apply to projects that qualify for
an existing sales and use tax exemption for purchases used in the
construction, rehabilitation, renovation, repair, maintenance, or
operation of qualifying low- and moderate-income housing facilities. To
qualify for this exemption, a nonprofit housing organization or housing
authority must sponsor the construction and own and operate the
facility (CGS § 12-412(29)).
Under existing law, “affordable housing” is that for which
households earning no more than the federally determined area median
income pay 30% or less of their annual income (CGS § 8-39a).
EFFECTIVE DATE: July 1, 2025, and applicable to sales occurring on
or after this date.
COMMITTEE ACTION
Housing Committee
Joint Favorable
Yea 18 Nay 0 (02/20/2025)