For the latest news and updates on Connecticut state and local tax

January 13, 2023

Authored by: Brandon Spinella

Connecticut Governor Ned Lamont declared the beginning of authorized retail sales of cannabis in CT to persons 21 and older by licensed retailers. Such sales may begin on January 10, 2023 and are subject to sales and use taxes and excise taxes. There will be three separate taxes on Connecticut cannabis sales, including:

  • The state’s 6.35% sales and use tax;
  • A local 3% sales tax; and,
  • An excise tax predicated on tetrahydrocannabinol content, which will range from 10%-15% of the sale price.

May 13, 2022

Connecticut Governor Signs Budget With $600 Million in Tax Cuts

Governor Ned Lamont signed the fiscal year 2023 budget containing $600 million of tax cuts. The enacted law extends the gas tax holiday, the child tax credit, and increases the property tax credit. Governor Lamont described the bill as “significant tax relief” for Connecticut’s lower and middle-earning families and retirees. The law:

  • Suspends the state’s excise tax on gasoline through Nov 30, 2022;
  • Allows a $250 per-child tax credit for lower and middle-income families;
  • Increases the state’s earned income tax credit to 41.5% of the federal credit; and
  • Increases the property tax credit from $200 to $300.

April 1, 2022

Connecticut Pauses Gas Tax and Provides Sales Tax Holiday

On March 24, 2022, Connecticut Governor Lamont signed legislation to suspend the 25 cents per gallon tax on gasoline and gasohol purchases from April 1, 2022 through June 30, 2022. Connecticut has stated that any retailer that fails to reduce the per-gallon price of gasoline during the sales tax holiday will be considered engaging in unfair or deceptive trade practices.

Additionally the state announced a sales tax holiday for clothing and footwear intended to be worn on or about the human body costing less than $100 from from April 10, 2022 through April 16, 2022. The state further clarified that clothing or footwear does not include accessories such as jewelry, handbags, luggage, umbrellas, watches, and other similar items carried on or about the human body but not worn on the body.

November 10, 2021

Connecticut Announces Tax Amnesty Program

On October 28, 2021, the Connecticut Department of Revenue Services (“DRS”) announced a Tax Amnesty which will run from November 1, 2021 through January 31, 2022. Pursuant to the Amnesty Program, individuals and businesses can pay past due taxes. Amnesty participants will receive penalty abatement, partial interest abatement, and may avoid criminal prosecution. The Tax Amnesty applies to any tax (except motor carrier road tax) for any tax period ending on or before December 31, 2020, in which an individual or business either under-reported, has current liabilities, or has not filed required returns and paid the applicable tax. If eligible tax obligations are not resolved via an amnesty filing by January 31, 2022, the taxpayer will face full interest, penalties, and potential criminal prosecution. [See:]

July 8, 2021

Connecticut Enacts State and Municipal Cannabis Taxes on Recreational Marijuana

The governor of Connecticut, Ned Lamont, has signed legislation legalizing the recreational use of marijuana effective July 1, 2021. The bill allows for three taxes on the retail sale of cannabis. State sales tax at the standard 6.35% state sales tax rate, 3% sales tax dedicated to city or town municipals, and an additional cannabis tax rate based on the THC content that will cost roughly between 10 to 15% of the sale price. State of Connecticut Governor News

March 23, 2021

Connecticut Update on Extension of Filing Deadline

The Connecticut Department of Revenue Services (DRS) is extending the filing and payment deadline for Connecticut individual income tax returns to Monday, May 17th, 2021 to align with the recently announced extension for federal returns. ( Connecticut filing, payment deadlines for individual income tax returns extended to May 17th, 2021, 03/19/2021.)

March 17, 2021

Connecticut Permits Certain Remote Employees Credit for Taxes Paid to Other States

For the 2020 tax year, Connecticut residents who paid income tax to any other state with a “convenience of the employer rule” will be permitted a credit against their Connecticut individual income tax for such taxes paid to those other states on their income earned while working remotely from Connecticut. The aforementioned credit is signed into law via H.B. 6516, which also permits a credit for the 2020 tax year for Connecticut residents who paid takes to another jurisdiction on income earned while working remotely from Connecticut.

March 3, 2021

Connecticut Aiming To Protect Telecommuters from Double-Taxation

A proposed senate bill would expand a credit that has mainly been used by Connecticut residents commuting into New York or Massachusetts for work. Under the proposal, any Connecticut resident who regularly worked out of state prior to March 11, 2020 would be eligible for the credit, which would only be available to telecommuters for the 2020 tax year.

March 21, 2020

CT Filing and Payment Deadline Extended

The Connecticut Department of Revenue Services (DRS) is extending the filing and payment deadline for Personal Income tax returns 90 days, to July 15, 2020. The extension also applies to Connecticut’s estimated income tax payments for the first and second quarters of 2020. Learn more here.

March 2020

DRS Uses Statutory Authority to Grant Extensions

The Connecticut Department of Revenue Services (“DRS”) is using its statutory authority to grant an automatic extension of Connecticut filing deadlines for certain annual tax returns to support businesses during the COVID-19 outbreak. Effectively immediately, business return deadlines are extended until June 15 and Individuals’ returns will follow the IRS relief provisions. Additionally, the filing deadlines for certain annual tax returns due on or after March 15, 2020, and before June 1, 2020, are extended by at least 30 days. Payments associated with these returns are extended to the corresponding due date in June.

The impacted returns and the associated filing dates and payment deadlines are below:

  • 2019 Form CT-1065/CT-1120 SI Connecticut PassThough Entity Tax Return: Filing date extended to April 15, 2020; payment deadline extended to June 15, 2020.
  • 2019 Form CT-990T Connecticut Unrelated Business Income Tax Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020.
  • 2019 Form CT-1120 and CT-1120CU Connecticut Corporation Business Return: Filing date extended to June 15, 2020; payment deadline extended to June 15, 2020.

For those preparing the Connecticut income tax (Form CT-1040) returns due April 15, DRS will adjust due dates for filing and payment of state income taxes to align with any specific, actionable announcement from the Internal Revenue Service regarding due dates for the filing and payment of federal income taxes.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.

July 2019

Corporate and Pass-Through Entities

Beginning January 1, 2020 the bi-annual business entity tax will be eliminated. The pass-through entity tax credit will be reduced to 87.5% from 93.01%. The filing fee for pass-through entities will go up to $80 from $20 beginning July 1, 2020.

Sales and Use Tax

The threshold for economic nexus has been reduced to $100,000 in gross receipts and 200 transactions, down from the $250,000 threshold. This will be in effect July 1, 2019.

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The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.