Kelly, CT Republicans propose state sales tax cut

Connecticut Senate Republican Leader Kevin Kelly, (R-Stratford), and other Connecticut Senate Republican lawmakers, are calling on the state legislature to temporarily reduce the Connecticut sales tax rate, to provide relief to families being crushed by surging inflation, according to information from Connecticut Senate Republicans Press Secretary Nicole Rall. The press conference declaring the information, is shown.

Connecticut Senate Republican Leader Kevin Kelly, (R-Stratford), and other Connecticut Senate Republican lawmakers, are calling on the state legislature to temporarily reduce the Connecticut sales tax rate, to provide relief to families being crushed by surging inflation, according to information from Connecticut Senate Republicans Press Secretary Nicole Rall. The press conference declaring the information, is shown.

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Connecticut Senate Republican Leader Kevin Kelly joined fellow Republican lawmakers last week in calling for a temporary reduction the Connecticut sales tax rate.

Republicans are proposing to reduce the state sales tax from 6.35 percent to 5.99 percent, and eliminate the additional 1 percent meals tax from Feb. 15, through the end of the 2022 calendar year — with the goal of providing relief to families in the face of rapidly increasing inflation.

“Connecticut’s state budget is benefiting from inflation as the state sales tax and gas tax brings in new, unplanned for revenue, a result of surging prices,” Kelly, who represents Shelton, said. “Meanwhile, Connecticut 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 proposal will result is a temporary tax reduction totaling $315.1 million, $132.3 million in the 2022 fiscal year, and $182.8 million in the 2023 fiscal year, during the difficult months ahead. The state budget will remain whole even if this tax reduction were to be approved.

“Senate Republicans want to direct the influx in tax revenue back to residents and provide immediate relief from the crushing impact of inflation,” Senate Republican Leader Pro Tempore Paul Formica (R-East Lyme) said.

Senate Republicans emphasized that this is just the beginning of the policies, that Connecticut must advance to make the state more affordable, address burdens, and provide relief during tough times.

“The government's budget grows, while family budgets get crushed,” Kelly said. “There must be a better way, and there is. We want to help working- and middle-class families when it comes to kitchen table economics and reduce every day financial strains that make it harder and harder to budget for a family.”

The state budget is in surplus, and is already directing a record amount of excess revenue to pay down on the state's pension debt, a policy that was adopted in the 2017 state bipartisan budget.

Kelly said Connecticut is expected to collect more than $155.2 million more in state sales tax revenue than originally projected in fiscal year 2022 and $144.6 million more in fiscal year 2023.

He added that Connecticut is also expected to collect more than $20 million more in gross receipts tax revenue, one of the state’s gas taxes, than originally projected in fiscal year 2022, and $25.6 million more in fiscal year 2023.

“The growth in these revenues above and beyond the revenue already counted on in the state budget will allow for nearly a full year of a sales tax reduction, giving families substantial relief to get through the most difficult months ahead,” Kelly said.

The overview Republican proposal calls for:

* Decrease the sales tax from 6.35 percent to 5.99 percent, from the Feb. 15, through the end of 2022 calendar year.

* Reduction would only apply to the sales tax that is at the 6.35 percent rate, e.g., no reduction to the 7.75 percent “luxury” rate for motor vehicles more than $50,000 or jewelry more than $5,000.

* Eliminate the meals tax surcharge from Feb. 15, through the end of calendar year 2022. The meals tax surcharge is 1 percent added to the base 6.35 percent sales tax rate. It applies to meals at restaurants, and prepared foods that are sold at supermarkets, and grocery stores.