HARTFORD, Conn. (WTNH) – Connecticut Senate Republicans are calling on the state legislature to temporarily reduce the state sales tax rate to provide relief to working- and middle-class families.
Senate Republicans are proposing to reduce the sales tax from 6.35% to 5.99% and eliminate the additional 1% meals tax from Feb. 15 through the end of the 2022 calendar year. The proposal would result in a temporary tax reduction totaling $315.1 million ($132.3 million in FY 22 and $182.8 million in FY 23).
“Connecticut’s state budget is benefitting from inflation as the state sales tax and gas tax brings in new, unplanned for revenue – a result of surging prices,” Senate Republican Leader Kevin Kelly (R-Stratford) said. “Meanwhile, CT residents are struggling to balance their own family budgets with no relief in sight as inflation drives up the costs of everything, from food to energy to home heating oil.”
The GOP said the state can afford to make the reduction since it has maintained a surplus throughout the coronavirus pandemic.
“Taxpayers would save over $315 million during the difficult months ahead,” State Sen. Paul Formica from Old Lyme, the Republican Senate Deputy Minority Leader, said. “If you divide that by the number of families in the state of Connecticut, it is over $250 per family.”
Guilford Democrat Rep. Sean Scanlon is reigniting an idea for a state child tax credit for families earning less than $220,000 a year.
“The average middle-class family in Connecticut, living in Meriden that has two children, would get $1,200 off their state income tax, a 40% income tax cut in Connecticut.”
When asked about resurrecting an old campaign promise to increase the property tax credit, Gov. Ned Lamont said, “I’m gonna try again. I think it’s the right thing to do. I think the property tax hits the middle class really hard.”
Last week, the governor unilaterally doubled the earned income tax credit, giving nearly $400 to households earning less than $56,000 a year.
“We need to review the Senate Republican proposal and its impact more closely, but generally speaking, we do support the push to provide broad tax relief for all residents,” House Republicans said.
Following Tuesday’s press conference, Senate President Pro Tempore Martin Looney (D-New Haven) said Democrats will unveil their own proposals in the next legislative session, which begins Feb. 9.
“Democrats will be unveiling our own revenue proposals in the coming session, including a look at ways to reduce Connecticut’s onerous local property tax burden,” Looney said in a statement. “Therefore, there will be a time for a comprehensive discussion of various revenue proposals and to closely examine questions such as who will benefit most and what Connecticut can afford in both the short-term and the long-term. I look forward to having that discussion with my Republican colleagues.”
OVERVIEW OF SENATE REPUBLICANS’ PROPOSAL
- Decrease the sales tax from 6.35% to 5.99% from Feb. 15 through the end of the 2022 calendar year.
- Reduction would only apply to the sales tax that is at the 6.35% rate (e.g., no reduction to the 7.75% “luxury” rate for motor vehicles over $50,000 or jewelry over $5,000).
- Eliminate the meals tax surcharge from Feb. 15 through the end of the 2022 calendar year. The meals tax surcharge is 1% added to the base 6.35% sales tax rate. It applies to meals at restaurants and prepared foods sold at supermarkets and grocery stores.