Connecticut State Department of Revenue Services

MOTOR CARRIER ROAD TAX

Since 1996, Connecticut has participated in the International Fuel Tax Agreement (IFTA), which is a cooperative agreement among most states and provinces of Canada to simplify the collection and reporting of fuel use tax by interstate motor carriers. Under IFTA, fuel tax returns are filed in the base jurisdiction of the motor carrier. The base jurisdiction of a motor carrier is where the vehicle is based for registration purposes and where operations are controlled and the vehicle is operated. For IFTA fuel tax reporting, a qualified motor vehicle is a vehicle that is designed to transport persons or property and that has: two axles and a gross vehicle weight or registered gross vehicle weight over 26,000 pounds; or three or more axles regardless of weight; or when used in combination, a combined gross vehicle weight over 26,000 pounds. Motor carriers who meet this qualification, and who travel solely within the State, are not required to file a return, but instead are subject to the tax at the time of purchase.

Revenue

FY 1999-00

$10,078,118

2000-01

10,274,045

2001-02

8,480,356

Exemption

Motor bus companies whose operations in Connecticut are exclusively for purposes of charter or special operations.

Number of Taxpayers/Filing Frequency

2,900 IFTA filers/Quarterly

3,500 Motor Carrier filers/Quarterly

Basis and Rate

Rate per Gallon

Gasoline

25¢

Gasohol

24¢

Diesel Fuel

18¢    (26¢ effective 8/1/02)

Natural Gas

18¢

Propane

18¢

MOTOR VEHICLE FUEL TAX

Motor fuel used or sold in Connecticut is subject to Motor Vehicle Fuels Tax. "Fuel" includes gasoline, diesel, gasohol, propane, or any combustible gas or liquid which generates the power needed to propel a motor vehicle.

Revenue

FY 1999-00

$496,658,719

2000-01

407,559,662

2001-02

430,285,552

Exemptions

  • Fuel sold to United States Government, the State of Connecticut, any Connecticut municipality or transit district, when such fuel is used in vehicles owned and operated, or leased and operated by any of these entities;
  • Fuel sold exclusively for heating purposes and to furnish gas, water, steam or electricity, if delivered to consumers through mains, lines or pipes;
  • Alternative fuels (compressed natural gas, liquefied petroleum gas, and liquefied natural gas);
  • Aviation fuel and fuel sold to owners or operators of an aircraft, or to a licensed aviation fuel dealer whose place of business is located at an airport;
  • Fuel used in school buses; and
  • Diesel fuel sold exclusively for use in portable power system generators that are larger than one hundred fifty kilowatts.

Number of Taxpayers/Filing Frequency

700 taxpayers/Monthly

Basis and Rate

Rate per Gallon

Gasoline

25¢

Gasohol

24¢

Diesel Fuel

18¢   (26¢ effective 8/1/02)

Natural Gas or Propane

18¢

Comparative Data

Number of Gallons Sold

FY 1999-00

FY 2000-01

FY 2001-02

Gasoline

1,374,425,596

1,430,548,750

1,485,866,361

Special Fuel

233,541,951

245,977,444

248,267,116

Gasohol

40,653,552

19,743,011

21,658,709

Total Gallons

1,648,621,099

1,696,269,205

1,755,792,186

MOTOR VEHICLE RENTAL SURCHARGE

Effective July 1, 2002, 2002 Conn. Pub. Acts 70, makes the motor vehicle rental surcharge applicable to the rental of any rental truck, defined as either a vehicle rented without a driver that has a gross vehicle weight rating of 26,000 pounds or less and is used in the transportation of personal property but not for business purposes, or a trailer that has a gross vehicle weight rating of not more than 6,000 pounds.

Revenue

FY 1999-00

$ 549,713

2000-01

127,365

2001-02

84,755

Exemptions

  • Motor vehicles delivered to a lessee outside Connecticut;

  • Rentals by an agency of United States Government;

  • Rentals of 31 days or more; and

  • Rentals of motor vehicles by a person that is not a rental company.

Number of Taxpayers / Filing Frequency

256 taxpayers / Annually

Basis and Rate

3% of the total rental charges imposed by the rental company.

Comparative Data

Gross collections by rental companies during 2001 amounted to $5,397,714. The $5,312,959 difference between gross collections and the amount remitted was retained by rental companies to reimburse personal property taxes and titling and registration fees paid during 2001.

OCCUPATIONAL TAX

An occupational tax is levied against any person who has been admitted as an attorney by the judges of the superior court, and who is engaged in the practice of law in Connecticut.

Revenue

FY 1999-00

$5,914,532

2000-01

5,937,106

2001-02

5,947,456

Exemptions

  • Judges and employees of the State of Connecticut;
  • Any attorney who has retired from the practice of law;
  • Any attorney serving on active duty with the United States Armed Forces for more than six months of a given year; and
  • Any attorney employed by a political subdivision of Connecticut or any probate court.

Number of Taxpayers/Filing Frequency

        13,217 Attorneys/Annually

Basis and Rate

        $450 per practicing attorney

PETROLEUM COMPANIES GROSS EARNINGS TAX

A tax is levied on the gross earnings of companies distributing petroleum products in Connecticut. Petroleum products include gasoline, aviation fuel, kerosene, diesel fuel, benzol, distillate fuels, residual fuels, crude oil and derivatives of petroleum such as paint, detergents, antiseptics, fertilizers, nylon, asphalt, plastics and other similar products.

Revenue

FY 1999-00

$103,338,078

2000-01

127,567,873

2001-02

100,113,929

Exemptions

  • Number 2 heating oil used exclusively for heating purposes or in a commercial fishing vessel;
  • Bunker fuel oil, intermediate fuel, marine diesel oil and marine gas oil used in vessels displacing over 4,000 dead weight tons;
  • Kerosene used exclusively for heating purposes, when the fuel is delivered via a truck with a metered delivery ticket, or to a centrally metered system serving a group of homes;
  • Propane gas used exclusively for heating and used as a fuel for a motor vehicle; and
  • Paraffin and microcrystalline waxes.

Number of Taxpayers/Filing Frequency

        660 taxpayers/Quarterly

Basis and Rate

  • 5% of the gross earnings from the sale or use of all petroleum products, with the exception of Number 2 heating oil used exclusively in vessels engaged in interstate commerce and Number 6 fuel oil used by manufacturers; and

  • 1% of the gross earnings from the sale or use of Number 2 heating oil used exclusively in vessels engaged in interstate commerce and Number 6 fuel oil used by manufacturers. The tax rate on these products is being reduced by 1% per year until fully exempt on or after July 1, 2002.

PUBLIC SERVICE COMPANIES TAX

Revenue

FY 1999-00

$166,263,478

2000-01

180,546,412

2001-02

166,598,313

Exemptions

  • All sales for resale of water, steam, gas, and electricity to public service corporations and municipal utilities.
  • Gas and Electric sales to manufacturing in SIC codes 2000 through 3999.
  • Natural Gas sold to out-of-state users or entities.
  • Sales by a gas company of natural gas or propane used as a motor vehicle fuel.
  • Retail sales of steam by utility companies.

Number of Taxpayers/Filing Frequency

117 taxpayers:

79 Public Utility Companies/Quarterly

26 Community Antenna TV Companies/Annually (April 1)

12 Railroad Companies/Annually (July 1)

Basis and Rate

Community Antenna TV 5%
Railroad 2 - 3.5%
Gas, Electric and Power 5%
Gas and Electric sales to residential customers 4%

Residential Credit

The electric, power, and gas companies claimed $4,850,040 in Fiscal Year 2001-02 under the one-percent credit attributable to the sale of gas and electric power for residential use.

Manufacturing Companies Credit

$9,209,303 was claimed in credit for Fiscal Year 2001-02 for gas and electric sales used directly by a company engaged in a manufacturing production process.

Comparative Data

FY 98-99

FY 00-01

FY 01-02

Community Antenna TV Systems

$24,698,633

$28,640,293

$29,667,698

Electric & Power Companies

28,376,064

27,865,890

30,882,437

Gas Companies

32,858,100

50,591,376

31,181,829

Gas and Electric Companies

79,978,795

73,393,178

74,762,744

Railroad Companies

167,364

55,585

103,605

Steam Companies*

184,515

0

0

Telecommunications**

7

90

0

Total Tax

$166,263,478

$180,546,412

$166,598,313

* Tax on steam companies repealed July 1, 2000.

** Tax on telecommunications repealed on January 1, 1990

Electric Restructuring

Effective for calendar quarters commencing on or after January 1, 2000, the gross receipts tax on generation services was eliminated. However, the rate on transmission and distribution services was increased to 6.8% for residential customers and to 8.5% for non-residential customers (other than manufacturers) as of the same date. Also, the Competitive Transition Assessment (CTA), the Systems Benefit Charge (SBC) and the charges for energy conservation and renewable energy are subject to the gross receipts tax.

REAL ESTATE CONVEYANCE TAX

Connecticut imposes a tax on the conveyance of real property. The tax is assessed on the full purchase price of the property and is determined by the classification of the property being conveyed. Payment of the tax is the responsibility of the seller of the property and must be paid before the deed can be recorded.

Revenue

FY 1999-00

$113,642,688

2000-01

111,113,467

2001-02

119,351,195

Exemptions

  • Deeds which this state is prohibited from taxing under the constitution or laws of the United States;
  • Deeds which secure a debt or other obligation;
  • Deeds to which this state or any of its political subdivisions or their respective agencies is a party;
  • Deeds of release of property which is security for a debt or other obligation;
  • Deeds of partition;
  • Deeds made pursuant to mergers of corporations;
  • Deeds made by subsidiary corporation to its parent corporation for no consideration other than the cancellation or surrender of the subsidiary’s stock;
  • Conveyance of an interest in real property pursuant to a decree of the superior court;
  • Certificates of devise or distribution;
  • Transfers for no consideration between parents and children;
  • An assignment with no consideration of any interest present or future, vested or contingent in real property which endures for a period of time and the termination of which is not fixed or ascertained by a specific number of years;
  • An assignment with no consideration of the unexpired portion of a term or estate for life or of a term or estate for years;
  • Tax deeds;
  • Certain exempt corporation transfers;
  • Any conveyances made on or after May 20, 1992, whereby the realty of a mutual savings institution is conveyed to a reorganized capital stock savings bank or a reorganized capital stock savings and loan association as defined in Title 36 of the Connecticut General Statutes;
  • All transfers between spouses;
  • Any deeds of property located in an entertainment district;
  • Conveyances of burial rights;
  • Land development rights to agricultural land under the state farmland preservation program; and
  • Transfers or conveyances of real estate to effectuate a mere change of identity or form of ownership or organization where there is no change in beneficial ownership.

Basis and Rate

Classification Rate
Unimproved Land .5%
Nonresidential property other than Unimproved Land 1.0%

Residential Dwelling:
   Portion $800,000 or less
   Portion that exceeds $800,000

.5%
1.0%

Residential Property other than Residential Dwelling .5%

Delinquent Mortgage

 .5%

Tables I and II  will show the number of conveyances by price of property and the conveyance tax revenue generated for the same price increments, respectively.

TABLE I

Price of Property

FY 1999-00
Number of
Conveyances

FY 2000-01
Number of
Conveyances

FY 2001-02
Number of
Conveyances

Under $30,000.00 47,615 46,969 49,925

30,000 - 39,999.99

 2,207 1,853

1,631

40,000 - 49,999.99 2,456 1,910

1,709

50,000 - 59,999.99 2,839 2,261

2,100

60,000 - 69,999.99 3,083

2,705

 2,402
70,000 - 79,999.99

3,437

 2,767

2,782

80,000 - 89,999.99

3,830

3,364

 3,044
90,000 - 99,999.99 3,574 3,157

2,911

100,000 - 109,999.99

3,540

 3,214 2,983
110,000 - 119,999.99 3,913 3,633

3,642

120,000 - 129,999.99 4,175 3,943 4,130
130,000 - 139,999.99 3,339 3,622 3,826
140,000 -149,999.99 2,957 2,891 3,238
150,000 - 159,999.99

2,817

 2,949 3,256
160,000 - 169,999.99 2,555

2,484

 2,913
170,000 - 179,999.99

2,183

 2,174

2,556

180,000 - 189,999.99 2,010 1,914 2,318
190,000 - 199,999.99 1,533 1,470 1,779
200,000 - 249,999.99

6,526

 6,636 7,728
250,000 - 299,999.99

4,607

 4,449 5,607
300,000 - 499,999.99 7,555 7,757 9,799

500,000 - 599,999.99

 1,474 1,533 1,866
600,000 - 699,999.99 1,023 1,000 1,257

700,000 - 799,999.99

 759 666 803
800,000  and over 2,550 2,574 2,805
Total 122,557 117,895 127,010
 

TABLE II

Price of Property

FY 1999-00
Revenue Generated

FY 2000-01
Revenue Generated

FY 2001-02
Revenue Generated

Under      $30,000.00

$412,770

$356,975

$322,630

30,000   -   39,999.99 377,806 321,273 281,589
40,000   -   49,999.99 533,664 426,761 382,180

50,000   -   59,999.99

 767,396 612,752 578,590
60,000   -   69,999.99 998,249 873,957 773,230
70,000   -   79,999.99 1,279,159 1,028,486 1,038,554
80,000   -   89,999.99

1,613,572

1,418,287 1,287,869
90,000   -   99,999.99 1,679,318 1,493,621 1,378,515
100,000 - 109,999.99 1,855,209

1,684,205

1,561,385
110,000 - 119,999.99

2,248,083

2,074,272 2,089,515
120,000 - 129,999.99

2,598,049

2,465,499

2,593,597
130,000 - 139,999.99 2,251,916 2,439,448

2,571,648

140,000 - 149,999.99 2,153,287 2,100,881 2,350,610
150,000 - 159,999.99 2,197,774

2,288,970

2,533,077
160,000 - 169,999.99 2,120,403

2,062,101

2,412,601

170,000 - 179,999.99 1,927,632 1,915,841 2,255,523
180,000 - 189,999.99 1,878,381 1,784,939 2,143,780
190,000 - 199,999.99 1,498,446 1,450,433

1,745,674

200,000 - 249,999.99 7,440,234

7,559,823

8,794,701

250,000 - 299,999.99 6,408,582 6,188,393 7,781,100
300,000 - 499,999.99 14,793,095

15,037,343

19,019,049
500,000 - 599,999.99 4,206,708 4,349,753 5,285,783
600,000 - 699,999.99

3,489,821

3,420,674 4,215,221

700,000 - 799,999.99

 3,026,741

2,670,929

3,159,792

800,000  and over 43,956,749

44,186,655

42,566,874
Total $111,713,044

$110,212,271

$119,123,087

REPEALED TAXES

CAPITAL GAINS, DIVIDENDS AND INTEREST INCOME TAX

The tax on capital gains, dividends and interest income was eliminated for income years commencing on or after January 1, 1992.  This income is now combined with all other income and subject to the Personal Income Tax.  The revenue collected represents late payments and revenue generated through assessment and compliance programs.

Revenue collected for Fiscal Year 2001-02:            $ 167,042

HAZARDOUS WASTE ASSESSMENT

The assessment imposed on generators of hazardous waste was eliminated as of July 1, 2000.  The revenue collected represents late payments and revenue generated through assessment and compliance programs.

 Revenue collected for Fiscal Year 2001-02:    $ 83,223

  

HOSPITAL GROSS EARNINGS TAX

A tax was imposed on the gross earnings of each hospital in Connecticut.  This tax has been repealed for calendar quarters commencing on or after April 1, 2000.  The revenue collected represents late payments and revenue generated through assessment and compliance programs.

Revenue collected for Fiscal Year 2001-02:    $ 38,128

FIDUCIARY ESTATE TAX

The Fiduciary Estate Tax, which has been repealed since 1991, was a tax on the income produced from an estate.  A small amount of revenue continues to be received from payments from estates whose income years commenced prior to January 1, 1991, or from assessments.  

Revenue collected for Fiscal Year 2001-02:    $ 5,215

SEED OYSTER TAX  

The Seed Oyster Tax is levied on seed oyster harvesters. The tax was established to provide funding for the seeding of state shellfish beds.  All revenue collected from the tax is deposited into a special fund used for the Shellfish Program administered by the Department of Agriculture’s Aquaculture Division.  A parasitic blight has destroyed recent harvests resulting in decreased revenue.

Revenue
FY 1999-00

$ 308

2000-01

 0

2001-02

 0

Number of Taxpayers / Filing Frequency

21 harvesters / Quarterly

Basis and Rate

10% of the retail value of harvested seed oysters.

SOLID WASTE TAX  

The Solid Waste Tax is levied on the owners of commercial resources recovery facilities that process municipal solid waste to reclaim energy.

Revenue
FY 1999-00 $ 2,218,677
2000-01

2,274,489

2001-02 2,245,933

Number of Taxpayers / Filing Frequency

            8 taxpayers / Quarterly

Basis and Rate

$1.00 per ton of solid waste processed.

SUCCESSION AND ESTATE TAXES

The Connecticut Succession Tax is levied on the transfer of property after death, and varies, depending on the size of the estate and the relationship of the decedent to the survivor.  Class AA transfers are to a surviving spouse.  Class A transfers are to immediate family, such as parents or children.  Class B transfers are to other relatives, including siblings, nieces and nephews.  All other transfers, excluding qualifying exempt organizations, are Class C.  The Compromise Class represents transfers whose tax liability was determined by the Department of Revenue Services where contingencies as to the ultimate beneficiary could not be currently determined. 

Due to legislative changes enacted during the 1995 Legislative Session and the November 2001 Special Legislative Session; the Succession Tax will be phased-out and will be eventually repealed for all classes.  Transfers to any Class A beneficiary are now completely exempt for estates of decedents dying on or after January 1, 2001.  Class B transfers are being reduced incrementally and will be fully exempt for estates of decedents dying on or after January 1, 2004.  The phase-out for Class C transfers began in 2001, with full exemption for estates of decedents dying on or after January 1, 2006.

The Connecticut Estate Tax is levied if the amount that the federal government allows as a tax credit for state death taxes exceeds the amount of the Connecticut Succession Tax paid.  The Connecticut Estate Tax recovers the full amount of the federal credit allowed on the transfer, yet it does not increase the tax burden paid by an estate.  In its absence, additional tax in the same amount would be paid to the federal government. Federal legislation has begun to phase-out the federal credit for state death taxes, thereby eliminating the basis of the Connecticut Estate Tax by 2005.

Succession Tax Revenue

Estate Tax Revenue

FY 1999-00

$198,142,011

$ 29,925,060

2000-01 182,673,179 70,123,053
2001-02 74,476,175 78,610,645

Succession Tax Exemptions

  • All Class AA and A transfers;

  • First $600,000 for Class B transfers;

  • First $200,000 for Class C transfers; and

  • All transfers to charitable, literary, scientific, historical, religious and government organizations.

Number of Transfers/Filing Frequency

2,735 Succession Tax Transfers

Class AA 111
Class A 519
Class B 794
Class C 883
Compromises 95
Exempt Organizations 333

873 Estates Subject to Connecticut Estate Tax 

Both returns due six months following date of death.

Basis and Rate 

Connecticut Succession Tax

Connecticut Estate Tax

Class AA Exempt

Allowable

Class A Exempt

federal credit

Class B 12.87%   -  14.30%
Class C

14.30%   -  20.02%

Comparative Data

A significant amount of the tax liability of current year Succession Tax Returns is remitted in prior fiscal years.  Current year collections include a significant amount of prepayments that will apply against upcoming tax returns.

Connecticut Succession Tax Liability

Class

FY 1999-00

FY 2000-01

FY 2001-02

In Millions of Dollars

Class A $ 124.4 $ 75.8

$ 44.8

Class B 47.2 34.4

31.2

Class C 36.0

41.9

26.5

Compromise 26.5   22.7

11.9

Total $234.1 $174.8

$ 114.4

TOBACCO PRODUCTS TAX

An excise tax is imposed on all non-cigarette tobacco products such as cigars, stogies, snuff, pipe and chewing tobacco.  The tax is imposed when the tobacco products are manufactured, imported, or purchased by distributors.  Distributors must be licensed annually and remit the tax on a monthly basis.

Revenue
FY 1999-00

$4,951,833

2000-01

4,464,835

2001-02

4,418,839

 Exemptions

  • Tobacco products exported from the State; and

  • Tobacco products sold to the federal government.

 Number of Taxpayers/Filing Frequency

230 distributors/Monthly

Basis and Rate

20% of the wholesale sales price.  Snuff tobacco products are taxed at a rate of 40¢ per ounce.

TOURISM ACCOUNT SURCHARGE

A surcharge is levied on the rental and leasing of passenger motor vehicles for a period of thirty consecutive calendar days or less. Revenues generated by the surcharge are deposited into the “Tourism Account” to be allocated for purposes of the strategic marketing plans and challenge grants required under Conn. Gen. Stat. §32-300.

Revenue
FY 1999-00 $4,780,821
2000-01 4,876,640
2001-02 4,536,350

Exemption

The rental or leasing of a motor vehicle pursuant to a written agreement, which has a term of more than thirty days.

Number of Taxpayers / Filing Frequency

19 taxpayers / Monthly

237 taxpayers / Quarterly

 Basis and Rate

$1.00 per rental/leasing day or portion thereof, of passenger motor vehicles.

UNRELATED BUSINESS TAXABLE INCOME TAX

The Unrelated Business Taxable Income Tax is imposed on any trade or business conducted by a tax-exempt organization that does not substantially relate to its tax-exempt purpose.  The tax is paid at the same rate as the Corporation Business Tax. For most taxpayers, the due date is either April 15 or May 15, depending on the entity.  Foreign trusts however, generally have a due date of June 15.

Revenue
FY 1999-00

$ 2,061,711

2000-01

3,735,458

2001-02

2,392,948

Number of Taxpayers / Filing Frequency

264 organizations / Annually  

Basis and Rate

7.5% of the unrelated business income of the organization.
No minimum tax is required. 

Credits

For the 2000 income year, 21 taxpayers claimed $8,125 in Electronic Data Processing Property Tax Credits.