Finance, Revenue and Bonding Committee
JOINT FAVORABLE REPORT
Bill No.: House Bill 5404
AN ACT CONCERNING A SALES AND USE TAXES EXEMPTION FOR WATER
Title: COMPANIES.
Vote Date: 4/6/2022
Vote Action: Joint Favorable
PH Date: 3/15/2022
File No.: 548
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Finance, Revenue and Bonding Committee
Co-Sponsors:
Rep. Joseph P. Gresko, 121st District
REASONS FOR BILL:
This bill would reinstate a tax exemption that began in 1994 and expired in 2015. It exempts
private water companies from sales and use tax on goods and services purchased by the water
company to maintain, operate, manage, or control a pond, lake, reservoir, stream, well, or
distributing plant or system that supplies water to at least 50 customers. This allows the private
water companies to keep costs to consumers on par with those of municipal and regional water
utilities.
RESPONSE FROM ADMINISTRATION/AGENCY:
None expressed.
NATURE AND SOURCES OF SUPPORT:
The following people submitted testimony in support of this bill stating, "The imposition of the
sales tax on purchases of private water companies imposes an unfair burden on the customers
and communities served by the private water companies. Taxes and the cost of doing business
including requirements to comply with certain local, state and federal requirements, that do not
apply to municipal and regional water companies, incurred by private water companies are
reflected in customer rates, creating disparities between the rates paid by private water
customers and customers of municipalities or regional water utilities. A 1993 study lead by the
legislatures Program Review and Investigations Committee concluded that private water
companies are subject to a number of legal and operational requirements that increase the
cost of doing business including requirements to comply with certain local, state and federal
requirements that do not apply to municipal and regional water companies; such as permit and
fee requirements of state agencies and local boards and commissions. To help address the
disparity and reduce the burden placed on customers of private water companies, in 1994 the
legislature exempted private water companies from the sales tax on goods and service they
purchase."
Jonathan Avery, Senior Executive Officer, Hazardville Water Company and Jewett City Water
Company
Elizabeth Gara, Executive Director, Connecticut Water Works Association
William Murray, Member, Connecticut Investment Advisory Council
Robert Sherwood, President and Chief Executive Officer, Hazardville Water Company and
Jewett City Water Company
Debra Szabo, Director of Rates and Regulation, Aquarion Water Company
Westbrook, Maureen, President, Connecticut Water Company
NATURE AND SOURCES OF OPPOSITION:
None expressed.
Reported by: Dawn Silveira Date: 4/22/22
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