Gov. Dannel Malloy wants to cut the state sales tax to 5.95 percent, which would be the lowest level since 1971.
To lower the tax, Malloy would eliminate the sales tax exemption for clothing, which was scheduled to begin on July 1. It would not, however, affect “Sales Tax Free Week” in August, when no sales tax is charged on clothing that costs less than $100.
“My goal is to support, stand with, and expand Connecticut’s middle class. By reforming our tax system, we’ll be able to lower the cost of almost all items – for everyone,” Malloy said in a statement. “Our economy continues to improve, and the state is seeing the largest private-sector job growth since 1998. By streamlining and simplifying our sales tax structure, we can give working families the lowest sales tax level in four decades.”
Malloy will be announcing the budget on Wednesday, which includes a plan to reduce the sales tax to 6.2 percent on Nov. 1, 2015, and down again to 5.95 percent on April 1, 2017.
According to his office, the lower sales tax rates would save residents $70 million in fiscal year 2016, $155 million in fiscal year 2017, $300 million in fiscal year 2018, $311 million in fiscal year 2019, and $323 million in fiscal year 2020.
Connecticut’s sales tax was 6 percent from 1991 to 2011, between 7 and 8 percent from 1976 to 1991, and 6 percent in 1975, a news release from the governor says.
Malloy is scheduled to present his budget proposal on Wednesday.
