CT House Bill 7424, which is currently pending signature, makes certain changes to the state’s tax laws. Effective for sales occurring on or after October 1, 2019, the definition of tangible personal property taxed at the general 6.35 percent sales and use tax rate is amended to include digital goods and canned or prewritten software that is electronically accessed or transferred, other than when purchased by a business for use by such business. The bill also increases the rate of sales and use tax imposed on meals and drinks sold at eating establishments and bars by one percent, meaning these sales will be taxed at a 7.35 percent rate.
House Bill 7424 also expands the sales tax base to include dry cleaning services and laundry services, and interior design services, unless purchased by a business for use in such business. These new services will be taxed effective for sales occurring after January 1, 2020. On the income and capital stock tax side, House Bill 7424 incrementally reduces the capital stock tax rates until the tax is phased out entirely for income years commencing on or after January 1, 2024. The bill also extends the ten percent corporate surtax through tax years beginning prior to January 1, 2021. There are additional tax changes included in the bill. Please stay tuned to TWIST for future legislative updates.
To view past weeks of TWIST that you may have missed, please visit our TWIST homepage.
To receive the TWIST e-mail each Monday, make sure that State and Local Tax is checked off as one of your topics of interest on the KPMG Tax subscription site.