Connecticut State Department of Revenue Services

SN 96(4)

1996 Legislative Changes Affecting the
Hospital Gross Earnings Tax

PURPOSE: The purpose of this Special Notice is to describe the changes made to the hospital gross earnings tax during the 1996 session of the Connecticut General Assembly.

STATUTORY AUTHORITY: Conn. Gen. Stat. §12-263b, as amended by 1996 Conn. Pub. Acts 144, §2.

EFFECTIVE DATE: The changes to the hospital gross earnings tax are effective as noted herein.

TAX RATE REDUCTION: Under Conn. Gen. Stat. §12-263b, "[t]here is hereby imposed on the hospital gross earnings of each hospital in this state a tax at the rate of eleven per cent of its hospital gross earnings in each taxable quarter." 1996 Conn. Pub. Acts 144, §2 amends Conn. Gen. Stat. §12-263b and provides for a reduction in the hospital gross earnings tax from the current rate of 11% to the rate of 6.25% by October 1, 1999.

Under the terms of 1996 Conn. Pub. Acts 144, §2, the tax imposed on the hospital gross earnings of each hospital in this state shall apply as follows:

  • 11% for taxable quarters commencing prior to October 1, 1996;
  • 9.25% for each taxable quarter commencing on or after October 1, 1996, and prior to October 1, 1997;
  • 8.25% for each taxable quarter commencing on or after October 1, 1997, and prior to October 1, 1998;
  • 7.25% for each taxable quarter commencing on or after October 1, 1998, and prior to October 1, 1999;
  • 6.25% for each taxable quarter commencing on or after October 1, 1999.

The following chart summarizes the reduction in the rate of the hospital gross earnings tax as provided in 1996 Conn. Pub. Acts 144, §2.

Schedule of Rate Reduction

Date                      Rate

October 1, 1996      9.25%
October 1, 1997      8.25%
October 1, 1998      7.25%
October 1, 1999      6.25%

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners.

EFFECT ON OTHER DOCUMENTS: None affected. 

SN 96(4)
Hospital Gross Earnings
Issued: 7/2/96