DRS: 2015 Legislative Summary

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

25 Sigourney Street
Hartford CT 06106-5032
 
 
 
 
 
 

 
 
 
The following is a summary of 2015 legislation affecting State taxes
DRS will publish additional guidance in the coming weeks

Alert: Please use the information available from this page for the most up-to-date tax information. Many of our older publications and Frequently Asked Questions may not have been updated to accommodate the recent legislative changes.

SALES TAX

  • Car wash services are taxable as of July 1, 2015.
  • Water company purchases taxable as of July 1, 2015.  Eliminates previous exemption.
  • Clothing and footwear sales remain taxable.  Exemption for clothing and footwear costing less than $50 NOT restored on July 1, 2015.
  • Motor vehicle parking in seasonal parking lots and hospital garages are taxable as of July 1, 2015.  Only applies to non-metered parking lots with 30 or more parking spaces.
  • Luxury sales tax rate increased to 7.75% as of July 1, 2015.   No change to items to which the luxury sales tax rate applies.
  • Sales tax-free week will still be August 16-22 this year but for items costing less than $100.
  • Computer and data processing services rate is NOT changed but services in connection with the creation, development, hosting or maintenance of a website will be taxable at 1% as of October 1, 2015.
  • Sales tax return filing due date will be the end of the month (rather than the 20th day) for taxable periods ending on or after December 31, 2015.
RELATED PUBLICATIONS
  • SN 2015(4) - Sales and Use Taxes on Car Wash Services
  • SN 2015(5) - 2015 Legislative Changes to the Sales and Use Taxes
INCOME TAX
  • Military retirement pensions are fully exempt from the income tax for the 2015 tax year.
  • Rate increase to 6.9% starting with the 2015 tax year for those individuals in the second highest existing income tax bracket, which includes single filers with adjusted gross income exceeding $250,000, head of household filers with adjusted gross income exceeding $400,000 and joint filers with adjusted gross income exceeding $500,000.
  • Rate increase to 6.99% starting with the 2015 tax year for those individuals in the newly created highest tax bracket, which includes single filers with adjusted gross income exceeding $500,000, head of household filers with adjusted gross income exceeding $800,000 and joint filers with adjusted gross income exceeding $1,000,000.
  • Single filer exemption remains at the 2014 exemption amount of $14,500 for the 2015 tax year.
  • Connecticut earned income tax credit remains at the 2014 level of 27.5% for the 2015 and 2016 tax years.
  • Employers must now submit to DRS the state copies of federal Form W-2, Wage and Tax Statement, and Form CT-W-3, Connecticut Annual Reconciliation of Withholding, by January 31.
CORPORATION BUSINESS TAX
  • Mandatory unitary combined reporting will be effective for income years starting on or after January 1, 2016.
  • 20% surtax continued for income years through 2017.
  • Net operating loss carryforwards limited to 50% of net income for income years starting on or after January 1, 2015.
  • Tax credits limited to 50.01% of tax for income years starting on or after January 1, 2015.
OTHER TAXES
  • Heavy equipment rental surcharge expanded to include all equipment a rental company owns and rentals of less than a year effective as of July 1, 2015. Revised definition of rental company.

  • Ambulatory surgical centers will be subject to a gross receipts tax beginning with the quarter starting October 1, 2015.  The first $1 million in gross receipts are exempt each fiscal year and revenue subject to the hospitals tax is also exempt.

  • Unified gift and estate tax capped at $20 million for gifts made after January 1, 2016 and estates of decedents dying after January 1, 2016.

  • Cigarette tax increased to $3.65 a pack on October 1, 2015 and $3.90 a pack on July 1, 2016.  Floor tax for inventory of a dealer or distributor as of September 30, 2015 and June 30, 2016.

  • Harbor Yard Ballpark athletic events exempt from admissions tax effective July 1, 2015 until June 30, 2017.