Raised Bill No. 1262 seeks to amend Connecticut's sales and use tax regulations to promote the construction of affordable housing. The bill introduces a new tax rate of three percent on the sale of tangible personal property used in new residential development projects, contingent upon the project including at least twenty percent affordable housing units or a minimum of fifty affordable housing units, as defined in section 8-39a. This provision is designed to incentivize affordable housing development and will take effect on July 1, 2025. The bill also makes several deletions and substitutions within the existing tax structure, including the replacement of previous subparagraphs and modifications to tax rates for various goods and services, while ensuring that the new provisions do not apply to projects that qualify for exemptions under section 12-412.

In addition to the changes related to affordable housing, the bill modifies the allocation of tax revenues from various sources. It mandates that ten percent of the tax revenue from certain subparagraphs be deposited into the Tourism Fund and adjusts the distribution of funds to the municipal revenue sharing account and the Special Transportation Fund, culminating in a full allocation to the Special Transportation Fund for motor vehicle sales starting July 1, 2022. The bill also repeals and substitutes subdivision (1) of section 12-411, which outlines an excise tax on the storage and use of tangible personal property and services, introducing new tax rates for rentals and services, including a fifteen percent tax on hotel stays. Overall, Raised Bill No. 1262 represents a comprehensive update to the state's tax regulations, with a focus on fostering affordable housing development.

Statutes affected:
Raised Bill: 4-66o