Connecticut HB 7410 Summary

• Sales Tax Changes (Effective January 1, 2020): Implements tiered sales tax rates ranging from 6.35% to 15% depending on product type, including higher rates on luxury goods (motor vehicles over $50,000, jewelry over $5,000, clothing over $1,000) and lodging (15% for hotels, 11% for bed & breakfasts).

• Service Taxation Expansion (Effective January 1, 2020): Extends sales tax to previously untaxed services including travel arrangements, interior design, veterinary services, sports instruction, and waste management services.

• Estate and Gift Tax Modifications (Effective January 1, 2019): Restructures Connecticut gift and estate tax rates with exemption thresholds tied to the federal basic exclusion amount starting in 2023, with rates ranging from 7.2% to 12%.

• Business Tax Changes (Effective July 1, 2019): Eliminates capital base tax for income years beginning January 1, 2020; modifies operating loss carry-over rules; reduces tax credit limitations to 50.01% for most taxpayers.

• STEM Scholarship Program (Effective July 1, 2019): Establishes scholarship program administered by Office of Higher Education awarding $5,000 annually to up to 4,000 undergraduate students per year in STEM fields or teacher preparation programs, funded by $200 million in state bonds.