AN ACT SUPPORTING LOCAL COMMERCE.

Senate
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General Assembly File No. 693
February Session, 2026 Substitute Senate Bill No. 2

Senate, April 20, 2026

The Committee on Finance, Revenue and Bonding reported
through SEN. FONFARA of the 1st Dist., Chairperson of the
Committee on the part of the Senate, that the substitute bill
ought to pass.

AN ACT SUPPORTING LOCAL COMMERCE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. Subdivision (3) of section 12-412 of the 2026 supplement to 1
the general statutes is repealed and the following is substituted in lieu 2
thereof (Effective October 1, 2026, and applicable to sales occurring on or after 3
October 1, 2026): 4
(3) (A) (i) The sale, furnishing or service of gas, including bottled gas, 5
and electricity when delivered to consumers through mains, lines, pipes 6
or bottles for use: 7
[(i) in] (I) In any residential dwelling; [or] 8
[(ii) directly] (II) Directly in agricultural production, fabrication of a 9
finished product to be sold or an industrial manufacturing plant, 10
provided the exemption under this [subdivision (ii) ] subclause shall 11
only be allowed with respect to a metered building, location or premise 12
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at which not less than seventy-five per cent of the gas, including bottled 13
gas, or electricity consumed at such metered building, location or 14
premise is used for the purpose of such production, fabrication or 15
manufacturing; or 16
(III) By a commercial or industrial business that has gross income for 17
the previous income or taxable year that does not exceed ten million 18
dollars. 19
(ii) Bottled gas as used in this subsection means L.P. (propane) gas. 20
(B) The sale or furnishing of telephone service and community 21
antenna television and cable service, provided the exemption for 22
services described in this subparagraph shall not be applicable to any 23
such service rendered on or after January 1, 1990. 24
(C) The sale, furnishing or service of water, steam and telegraph 25
when delivered to consumers through mains, lines, pipes or bottles. 26
(D) The sale or furnishing of electricity, not subject to the exemption 27
under subparagraph (A) of this subsection, with respect to that portion 28
of the charges applicable to such electricity for any month of service 29
which is not in excess of one hundred fifty dollars. 30
(E) The sale, furnishing or service of gas, water, steam or electricity 31
for use directly in the furnishing of gas, water, steam or electricity 32
delivered to consumers through mains, lines or pipes. 33
Sec. 2. Subdivision (1) of section 12 -408 of the general statutes is 34
repealed and the following is substituted in lieu thereof (Effective October 35
1, 2026, and applicable to sales occurring on or after October 1, 2026): 36
(1) (A) For the privilege of making any sales, as defined in 37
subdivision (2) of subsection (a) of section 12 -407, at retail, in this state 38
for a consideration, a tax is hereby imposed on all retailers at the rate of 39
six and thirty -five-hundredths per cent of the gross receipts of any 40
retailer from the sale of all tangible personal property sold at retail or 41
from the rendering of any services constituting a sale in accordance with 42
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subdivision (2) of subsection (a) of section 12-407, except, in lieu of said 43
rate, the rates provided in subparagraphs (B) to (I), inclusive, of this 44
subdivision; 45
(B) (i) At a rate of fifteen per cent with respect to each transfer of 46
occupancy, from the total amount of rent received by a hotel or lodging 47
house for the first period not exceeding thirty consecutive calendar 48
days; 49
(ii) At a rate of eleven per cent with respect to each transfer of 50
occupancy, from the total amount of rent received by a bed and 51
breakfast establishment for the first period not exceeding thirty 52
consecutive calendar days; 53
(C) With respect to the sale of a motor vehicle to any individual who 54
is a member of the armed forces of the United States and is on full-time 55
active duty in Connecticut and who is considered, under 50 [App] USC 56
App 574, a resident of another state, or to any such individual and the 57
spouse thereof, at a rate of four and one -half per cent of the gross 58
receipts of any retailer from such sales, provided such retailer requires 59
and maintains a declaration by such individual, prescribed as to form 60
by the commissioner and bearing notice to the effect that false 61
statements made in such declaration are punishable, or other evidence, 62
satisfactory to the commissioner, concerning the purchaser's state of 63
residence under 50 [App] USC App 574; 64
(D) (i) With respect to the sales of computer and data processing 65
services occurring on or after July 1, 2001, at the rate of one per cent, and 66
(ii) with respect to sales of Internet access services, on and after July 1, 67
2001, such services shall be exempt from such tax; 68
(E) (i) With respect to the sales of labor that is otherwise taxable under 69
subparagraph (C) or (G) of subdivision (2) of subsection (a) of section 70
12-407 on existing vessels and repair or maintenance services on vessels 71
occurring on and after July 1, 1999, such services shall be exempt from 72
such tax; 73
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(ii) With respect to the sale of a vessel, a motor for a vessel or a trailer 74
used for transporting a vessel, at the rate of two and ninety -nine-75
hundredths per cent, except that the sale of a vessel shall be exempt from 76
such tax if such vessel is docked in this state for sixty or fewer days in a 77
calendar year; 78
(iii) With respect to the sale of dyed diesel fuel, as defined in 79
subsection (d) of section 12-487, sold by a marine fuel dock exclusively 80
for marine purposes, at the rate of two and ninety-nine-hundredths per 81
cent; 82
(F) With respect to patient care services for which payment is 83
received by the hospital on or after July 1, 1999, and prior to July 1, 2001, 84
at the rate of five and three-fourths per cent and on and after July 1, 2001, 85
such services shall be exempt from such tax; 86
(G) With respect to the rental or leasing of a passenger motor vehicle 87
for a period of thirty consecutive calendar days or less, at a rate of nine 88
and thirty-five-hundredths per cent; 89
(H) With respect to the sale of (i) a motor vehicle for a sales price 90
exceeding fifty thousand dollars, at a rate of seven and three-fourths per 91
cent on the entire sales price, (ii) jewelry, whether real or imitation, for 92
a sales price exceeding five thousand dollars, at a rate of seven and 93
three-fourths per cent on the entire sales price, and (iii) an article of 94
clothing or footwear intended to be worn on or about the human body, 95
a handbag, luggage, umbrella, wallet or watch for a sales price 96
exceeding one thousand dollars, at a rate of seven and three-fourths per 97
cent on the entire sales price. For purposes of this subparagraph, "motor 98
vehicle" has the meaning provided in section 14-1, but does not include 99
a motor vehicle subject to the provisions of subparagraph (C) of this 100
subdivision, a motor vehicle having a gross vehicle weight rating over 101
twelve thousand five hundred pounds, or a motor vehicle having a 102
gross vehicle weight rating of twelve thousand five hundred pounds or 103
less that is not used for private passenger purposes, but is designed or 104
used to transport merchandise, freight or persons in connection with 105
any business enterprise and issued a commercial registration or more 106
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specific type of registration by the Department of Motor Vehicles; 107
(I) With respect to the sale of meals, as defined in subdivision (13) of 108
section 12-412, sold by an eating establishment, caterer or grocery store; 109
and spirituous, malt or vinous liquors, soft drinks, sodas or beverages 110
such as are ordinarily dispensed at bars and soda fountains, or in 111
connection therewith; in addition to the tax imposed under 112
subparagraph (A) of this subdivision, at the rate of one per cent; 113
(J) The rate of tax imposed by this chapter shall be applicable to all 114
retail sales upon the effective date of such rate, except that a new rate 115
that represents an increase in the rate applicable to the sale shall not 116
apply to any sales transaction wherein a binding sales contract without 117
an escalator clause has been entered into prior to the effective date of the 118
new rate and delivery is made within ninety days after the effective date 119
of the new rate. For the purposes of payment of the tax imposed under 120
this section, any retailer of services taxable under subdivision (37) of 121
subsection (a) of section 12 -407, who computes taxable income, for 122
purposes of taxation under the Internal Revenue Code of 1986, or any 123
subsequent corresponding internal revenue code of the United States, 124
as amended from time to time, on an accounting basis that recognizes 125
only cash or other valuable consideration actually received as income 126
and who is liable for such tax only due to the rendering of such services 127
may make payments related to such tax for the period during which 128
such income is received, without penalty or interest, without regard to 129
when such service is rendered; 130
(K) (i) For calendar quarters ending on or after September 30, 2019 , 131
the commissioner shall deposit into the regional planning incentive 132
account, established pursuant to section 4-66k, six and seven-tenths per 133
cent of the amounts received by the state from the tax imposed under 134
subparagraph (B) of this subdivision and ten and seven -tenths per cent 135
of the amounts received by the state from the tax imposed under 136
subparagraph (G) of this subdivision; 137
(ii) For calendar quarters ending on or after September 30, 2018, the 138
commissioner shall deposit into the Tourism Fund established under 139
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section 10-395b ten per cent of the amounts received by the state from 140
the tax imposed under subparagraph (B) of this subdivision; 141
(L) (i) For calendar months commencing on or after July 1, 2021, but 142
prior to July 1, 2023, the commissioner shall deposit into the municipal 143
revenue sharing account established pursuant to section 4-66l seven and 144
nine-tenths per cent of the amounts received by the state from the tax 145
imposed under subparagraph (A) of this subdivision, including such 146
amounts received on or after July 1, 2023, attributable to the fiscal year 147
ending June 30, 2023; and 148
(ii) For calendar months commencing on or after July 1, 2023, the 149
commissioner shall deposit into the Municipal Revenue Sharing Fund 150
established pursuant to section 4-66p seven and nine-tenths per cent of 151
the amounts received by the state from the tax imposed under 152
subparagraph (A) of this subdivision; [and] 153
(M) (i) For calendar months commencing on or after July 1, 2017, the 154
commissioner shall deposit into the Special Transportation Fund 155
established under section 13b -68 seven and nine -tenths per cent of the 156
amounts received by the state from the tax imposed under 157
subparagraph (A) of this subdivision; 158
(ii) For calendar months commencing on or after July 1, 2018, but 159
prior to July 1, 2019, the commissioner shall deposit into the Special 160
Transportation Fund established under section 13b -68 eight per cent of 161
the amounts received by the state from the tax imposed under 162
subparagraphs (A) and (H) of this subdivision on the sale of a motor 163
vehicle; 164
(iii) For calendar months commencing on or after July 1, 2019, but 165
prior to July 1, 2020, the commissioner shall deposit into the Special 166
Transportation Fund established under section 13b -68 seventeen per 167
cent of the amounts received by the state from the tax imposed under 168
subparagraphs (A) and (H) of this subdivision on the sale of a motor 169
vehicle; 170
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(iv) For calendar months commencing on or after July 1, 2020, but 171
prior to July 1, 2021, the commissioner shall deposit into the Special 172
Transportation Fund established under section 13b -68 twenty-five per 173
cent of the amounts received by the state from the tax imposed under 174
subparagraphs (A) and (H) of this subdivision on the sale of a motor 175
vehicle; 176
(v) For calendar months commencing on or after July 1, 2021, but 177
prior to July 1, 2022, the commissioner shall deposit into the Special 178
Transportation Fund established under section 13b -68 seventy-five per 179
cent of the amounts received by the state from the tax imposed under 180
subparagraphs (A) and (H) of this subdivision on the sale of a motor 181
vehicle; and 182
(vi) For calendar months commencing on or after July 1, 2022, the 183
commissioner shall deposit into the Special Transportation Fund 184
established under section 13b -68 one hundred per cent of the amounts 185
received by the state from the tax imposed under subparagraphs (A) 186
and (H) of this subdivision on the sale of a motor vehicle; and 187
(N) For calendar months commencing on or after October 1, 2026, the 188
commissioner shall deposit fifty per cent of the amounts received by the 189
state from the tax imposed under subparagraph (I) of this subdivision 190
into the Tourism Fund established under section 10 -395b and fifty per 191
cent of such amounts in the municipal diversification account 192
established under section 4 of this act. 193
Sec. 3. Subdivision (1) of section 12 -411 of the general statutes is 194
repealed and the following is substituted in lieu thereof (Effective October 195
1, 2026, and applicable to sales occurring on or after October 1, 2026): 196
(1) (A) An excise tax is hereby imposed on the storage, acceptance, 197
consumption or any other use in this state of tangible personal property 198
purchased from any retailer for storage, acceptance, consumption or any 199
other use in this state, the acceptance or receipt of any services 200
constituting a sale in accordance with subdivision (2) of subsection (a) 201
of section 12-407, purchased from any retailer for consumption or use in 202
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this state, or the storage, acceptance, consumption or any other use in 203
this state of tangible personal property which has been manufactured, 204
fabricated, assembled or processed from materials by a person, either 205
within or without this state, for storage, acceptance, consumption or any 206
other use by such person in this state, to be measured by the sales price 207
of materials, at the rate of six and thirty-five-hundredths per cent of the 208
sales price of such property or services, except, in lieu of said rate: 209
(B) (i) At a rate of fifteen per cent of the rent paid to a hotel or lodging 210
house for the first period not exceeding thirty consecutive calendar 211
days; 212
(ii) At a rate of eleven per cent of the rent paid to a bed and breakfast 213
establishment for the first period not exceeding thirty consecutive 214
calendar days; 215
(C) With respect to the storage, acceptance, consumption or use in 216
this state of a motor vehicle purchased from any retailer for storage, 217
acceptance, consumption or use in this state by any individual who is a 218
member of the armed forces of the United States and is on full -time 219
active duty in Connecticut and who is considered, under 50 [App] USC 220
App 574, a resident of another state, or to any such individual and the 221
spouse of such individual at a rate of four and one -half per cent of the 222
sales price of such vehicle, provided such retailer requires and 223
maintains a declaration by such individual, prescribed as to form by the 224
commissioner and bearing notice to the effect that false statements made 225
in such declaration are punishable, or other evidence, satisfactory to the 226
commissioner, concerning the purchaser's state of residence under 50 227
[App] USC App 574; 228
(D) (i) With respect to the acceptance or receipt in this state of labor 229
that is otherwise taxable under subparagraph (C) or (G) of subdivision 230
(2) of subsection (a) of section 12 -407 on existing vessels and repair or 231
maintenance services on vessels occurring on and after July 1, 1999, such 232
services shall be exempt from such tax; 233
(ii) (I) With respect to the storage, acceptance or other use of a vessel 234
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in this state, at the rate of two and ninety -nine-hundredths per cent, 235
except that such storage, acceptance or other use shall be exempt from 236
such tax if such vessel is docked in this state for sixty or fewer days in a 237
calendar year; 238
(II) With respect to the storage, acceptance or other use of a motor for 239
a vessel or a trailer used for transporting a vessel in this state, at the rate 240
of two and ninety-nine-hundredths per cent; 241
(III) With respect to the storage, acceptance or other use of dyed diesel 242
fuel, as defined in subsection (d) of section 12 -487, exclusively for 243
marine purposes, at the rate of two and ninety -nine-hundredths per 244
cent; 245
(E) (i) With respect to the acceptance or receipt in this state of 246
computer and data processing services purchased from any retailer for 247
consumption or use in this state occurring on or after July 1, 2001, at the 248
rate of one per cent of such services, and (ii) with respect to the 249
acceptance or receipt in this state of Internet access services, on and after 250
July 1, 2001, such services shall be exempt from such tax; 251
(F) With respect to the acceptance or receipt in this state of patient 252
care services purchased from any retailer for consumption or use in this 253
state for which payment is received by the hospital on or after July 1, 254
1999, and prior to July 1, 2001, at the rate of five and three -fourths per 255
cent and on and after July 1, 2001, such services shall be exempt from 256
such tax; 257
(G) With respect to the rental or leasing of a passenger motor vehicle 258
for a period of thirty consecutive calendar days or less, at a rate of nine 259
and thirty-five-hundredths per cent; 260
(H) With respect to the acceptance or receipt in this state of (i) a motor 261
vehicle for a sales price exceeding fifty thousand dollars, at a rate of 262
seven and three -fourths per cent on the entire sales price, (ii) jewelry, 263
whether real or imitation, for a sales price exceeding five thousand 264
dollars, at a rate of seven and three -fourths per cent on the entire sales 265
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price, and (iii) an article of clothing or footwear intended to be worn on 266
or about the human body, a handbag, luggage, umbrella, wallet or 267
watch for a sales price exceeding one thousand dollars, at a rate of seven 268
and three-fourths per cent on the entire sales price. For purposes of this 269
subparagraph, "motor vehicle" has the meaning provided in section 14-270
1, but does not include a motor vehicle subject to the provisions of 271
subparagraph (C) of this subdivision, a motor vehicle having a gross 272
vehicle weight rating over twelve thousand five hundred pounds, or a 273
motor vehicle having a gross vehicle weight rating of twelve thousand 274
five hundred pounds or less that is not used for private passenger 275
purposes, but is designed or used to transport merchandise, freight or 276
persons in connection with any business enterprise and issued a 277
commercial registration or more specific type of registration by the 278
Department of Motor Vehicles; 279
(I) With respect to the acceptance or receipt in this state of meals, as 280
defined in subdivision (13) of section 12 -412, sold by an eating 281
establishment, caterer or grocery store; and spirituous, malt or vinous 282
liquors, soft drinks, sodas or beverages such as are ordinarily dispensed 283
at bars and soda fountains, or in connection therewith; in addition to the 284
tax imposed under subparagraph (A) of this subdivision, at the rate of 285
one per cent; 286
(J) (i) For calendar quarters ending on or after September 30, 2019, the 287
commissioner shall deposit into the regional planning incentive 288
account, established pursuant to section 4-66k, six and seven-tenths per 289
cent of the amounts received by the state from the tax imposed under 290
subparagraph (B) of this subdivision and ten and seven -tenths per cent 291
of the amounts received by the state from the tax imposed under 292
subparagraph (G) of this subdivision; 293
(ii) For calendar quarters ending on or after September 30, 2018, the 294
commissioner shall deposit into the Tourism Fund established under 295
section 10-395b ten per cent of the amounts received by the state from 296
the tax imposed under subparagraph (B) of this subdivision; 297
(K) (i) For calendar months commencing on or after July 1, 2021, but 298
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prior to July 1, 2023, the commissioner shall deposit into the municipal 299
revenue sharing account established pursuant to section 4-66l seven and 300
nine-tenths per cent of the amounts received by the state from the tax 301
imposed under subparagraph (A) of this subdivision, including such 302
amounts received on or after July 1, 2023, attributable to the fiscal year 303
ending June 30, 2023; and 304
(ii) For calendar months commencing on or after July 1, 2023, the 305
commissioner shall deposit into the Municipal Revenue Sharing Fund 306
established pursuant to section 4-66p seven and nine-tenths per cent of 307
the amounts received by the state from the tax imposed under 308
subparagraph (A) of this subdivision; [and] 309
(L) (i) For calendar months commencing on or after July 1, 2017, the 310
commissioner shall deposit into said Special Transportation Fund seven 311
and nine-tenths per cent of the amounts received by the state from the 312
tax imposed under subparagraph (A) of this subdivision; 313
(ii) For calendar months commencing on or after July 1, 2018, but 314
prior to July 1, 2019, the commissioner shall deposit into the Special 315
Transportation Fund established under section 13b -68 eight per cent of 316
the amounts received by the state from the tax imposed under 317
subparagraphs (A) and (H) of this subdivision on the acceptance or 318
receipt in this state of a motor vehicle; 319
(iii) For calendar months commencing on or after July 1, 2019, but 320
prior to July 1, 2020, the commissioner shall deposit into the Special 321
Transportation Fund established under section 13b -68 seventeen per 322
cent of the amounts received by the state from the tax imposed under 323
subparagraphs (A) and (H) of this subdivision on the acceptance or 324
receipt in this state of a motor vehicle; 325
(iv) For calendar months commencing on or after July 1, 2020, but 326
prior to July 1, 2021, the commissioner shall deposit into the Special 327
Transportation Fund established under section 13b -68 twenty-five per 328
cent of the amounts received by the state from the tax imposed under 329
subparagraphs (A) and (H) of this subdivision on the acceptance or 330
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receipt in this state of a motor vehicle; 331
(v) For calendar months commencing on or after July 1, 2021, but 332
prior to July 1, 2022, the commissioner shall deposit into the Special 333
Transportation Fund established under section 13b -68 seventy-five per 334
cent of the amounts received by the state from the tax imposed under 335
subparagraphs (A) and (H) of this subdivision on the acceptance or 336
receipt in this state of a motor vehicle; and 337
(vi) For calendar months commencing on or after July 1, 2022, the 338
commissioner shall deposit into the Special Transportation Fund 339
established under section 13b -68 one hundred per cent of the amounts 340
received by the state from the tax imposed under subparagraphs (A) 341
and (H) of this subdivision on the acceptance or receipt in this state of a 342
motor vehicle; and 343
(M) For calendar months commencing on or after October 1, 2026, the 344
commissioner shall deposit fifty per cent of the amounts received by the 345
state from the tax imposed under subparagraph (I) of this subdivision 346
into the Tourism Fund established under section 10 -395b and fifty per 347
cent of such amounts in the municipal diversification account 348
established under section 4 of this act. 349
Sec. 4. (NEW) ( Effective October 1, 2026 ) (a) There is established an 350
account to be known as the " municipal diversification account", which 351
shall be a separate, nonlapsing account. The account shall contain any 352
moneys required by law to be deposited in the account. Moneys in the 353
account shall be expended by the Commissioner of Revenue Services for 354
the purpose of distributing funds to municipalities in accordance with 355
the provisions of this section. 356
(b) The commissioner shall maintain an accounting aggregated by 357
municipality, of the amounts deposited in the municipal diversification 358
account pursuant to subparagraph (N) of subdivision (1) of section 12 -359
408 of the general statutes, as amended by this act, and subparagraph 360
(M) of subdivision (1) of section 12 -411 of the general statutes, as 361
amended by this act. 362
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(c) Commencing in the calendar quarter ending March 31, 2027, and 363
in each calendar quarter thereafter, the commissioner shall distribute 364
moneys from the account to each municipality where the revenue from 365
the tax imposed under subparagraph (I) of subdivision (1) of section 12-366
408 of the general statutes, as amended by this act, and subparagraph (I) 367
of subdivision (1) of section 12 -411 of the general statutes, as amended 368
by this act, was generated, as determined by the commissioner. Any 369
moneys for which the commissioner cannot determine a point -of-sale 370
shall be distributed pro rata to the municipalities for which sales of 371
meals, as defined in subdivision (13) of section 12 -412 of the general 372
statutes, were reported in the returns filed under chapter 219 of the 373
general statutes for the applicable calendar quarter. 374
Sec. 5. Section 12 -408d of the general statutes is repealed and the 375
following is substituted in lieu thereof (Effective October 1, 2026): 376
(a) For calendar quarters commencing on or after July 1, 2004, any 377
retailer with sales in more than one town in this state, for which sales 378
such retailer files a return under this chapter, shall disaggregate the 379
information in the return, in such form as may be prescribed by the 380
Commissioner of Revenue Services, to indicate the town in which sales 381
occurred for which tax was collected by such retailer and the amount of 382
such tax collected, by town. 383
(b) For calendar quarters commencing on or after October 1, 2026, any 384
retailer described in subsection (a) of this section with sales of meals, as 385
defined in subdivision (13) of section 12 -412, where meals are not the 386
only items sold by such retailer, shall list the sales of meals separately in 387
the return such retailer files under this chapter and disaggregate the 388
information, if applicable, as set forth in subsection (a) of this section. 389
Sec. 6. (NEW) ( Effective from passage ) (a) There is established a 390
Connecticut-India Trade Commission, which shall be part of the 391
Legislative Department. 392
(b) The commission shall consist of the following members: 393
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(1) Two appointed by the speaker of the House of Representatives; 394
(2) Two appointed by the president pro tempore of the Senate; 395
(3) Two appointed by the majority leader of the House of 396
Representatives; 397
(4) Two appointed by the majority leader of the Senate; 398
(5) Two appointed by the minority leader of the House of 399
Representatives; 400
(6) Two appointed by the minority leader of the Senate; 401
(7) Two members of the joint standing committee of the General 402
Assembly having cognizance of matters relating to commerce, one of 403
whom shall be appointed by the Senate chairperson of such committee 404
and one of whom shall be appointed by the House chairperson of such 405
committee; 406
(8) The ranking members of the joint standing committee of the 407
General Assembly having cognizance of matters relating to commerce, 408
or their designees; 409
(9) Three persons appointed by the Governor; 410
(10) A representative of a public institution of higher education in the 411
state, who shall be appointed by the Governor; 412
(11) A representative of a chamber of commerce in the state, who shall 413
be appointed by the Governor; and 414
(12) Two representatives of Indian or Indian-American communities 415
in the state, who shall be appointed by the Governor and shall not be 416
members of the same political party. 417
(c) The members of the commission shall each have current or past 418
involvement in organizations that promote Indian affairs or are 419
interested in the well -being of trade relations between the state and 420
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India. 421
(d) Any member of the commission appointed under subdivisions (1) 422
to (6), inclusive, of subsection (b) of this section may be a member of the 423
General Assembly. 424
(e) (1) All initial appointments to the commission shall be made not 425
later than October 1, 2026. Initial appointments made by the Governor, 426
the majority leader of the House of Representatives and the minority 427
leader of the House of Representatives shall terminate on September 30, 428
2029. Initial appointments made by the speaker of the House of 429
Representatives, the president pro tempore of the Senate, the majority 430
leader of the Senate and the minority leader of the Senate shall terminate 431
on September 30, 2030. The initial and subsequent terms of members 432
appointed by the chairpersons of the joint standing committee of the 433
General Assembly having cognizance of matters relating to commerce 434
shall be coterminous with the terms of the appointing authority for each 435
such member in accordance with the provisions of section 4 -1a of the 436
general statutes. 437
(2) Appointed members of the commission shall serve for four -year 438
terms which shall commence on the date of appointment, except as 439
provided in subdivision (1) of this subsection. Members shall continue 440
to serve until their successors are appointed. 441
(f) The speaker of the House of Representatives and the president pro 442
tempore of the Senate shall select the chairpersons of the commission 443
from among the members of the commission. Such chairpersons shall 444
schedule the first meeting of the commission, which shall be held not 445
later than November 1, 2026. 446
(g) The administrative staff of the joint standing committee of the 447
General Assembly having cognizance of matters relating to commerce 448
shall serve as administrative staff of the commission. 449
(h) Any vacancy shall be filled by the appointing authority. Any 450
vacancy occurring other than by expiration of term shall be filled for the 451
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balance of the unexpired term. 452
(i) A majority of the commission shall constitute a quorum for the 453
transaction of any business. 454
(j) The members of the commission shall serve without 455
compensation, but shall, within the limits of available funds, be 456
reimbursed for expenses necessarily incurred in the performance of 457
their duties. 458
(k) The commission shall have the following powers and duties: (1) 459
To advance bilateral trade and investment between the state and India; 460
(2) to initiate joint action on policy issues of mutual interest to the state 461
and India; (3) to promote business and academic exchanges between the 462
state and India; (4) to encourage mutual economic support between the 463
state and India; (5) to encourage mutual investment in the infrastructure 464
of the state and India; (6) to address such other issues as determined by 465
the commission; (7) to obtain from any executive department, board, 466
commission or other agency of the state such assistance and data as are 467
necessary and available to carry out the purposes of this section; (8) to 468
accept any gift, donation or bequest for the purpose of performing the 469
duties described in this section; and (9) to perform such other acts as 470
may be necessary and appropriate to carry out the duties described in 471
this section. 472
(l) The commission shall meet as often as deemed necessary by the 473
chairpersons or a majority of the commission. Any appointed member 474
who fails to attend three consecutive meetings or who fails to attend 475
fifty per cent of all meetings held during any calendar year shall be 476
deemed to have resigned from the commission. 477
(m) Not later than February 1, 2028, and annually thereafter, the 478
commission shall submit a report, in accordance with the provisions of 479
section 11-4a of the general statutes, to the Governor, the Commissioner 480
of Economic and Community Development and the joint standing 481
committee of the General Assembly having cognizance of matters 482
relating to commerce on the activities of the commission during the 483
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preceding year, which shall include, but need not be limited to, any 484
recommendations for policy changes and amendments to the general 485
statutes necessary to effectuate the purposes of the commission. 486
This act shall take effect as follows and shall amend the following
sections:

Section 1 October 1, 2026, and
applicable to sales
occurring on or after
October 1, 2026
12-412(3)
Sec. 2 October 1, 2026, and
applicable to sales
occurring on or after
October 1, 2026
12-408(1)
Sec. 3 October 1, 2026, and
applicable to sales
occurring on or after
October 1, 2026
12-411(1)
Sec. 4 October 1, 2026 New section
Sec. 5 October 1, 2026 12-408d
Sec. 6 from passage New section

FIN Joint Favorable Subst.

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sSB2 / File No. 693 18

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Department of Revenue Services Various -
Revenue Loss
17.4 million 23.8 million
Resources of the General Fund GF - Revenue
Loss
89 million 121.6
million
Resources of the Tourism Fund Tourism -
Revenue Gain
44.5 million 60.8 million
Department of Revenue Services Various -
Revenue Gain
44.5 million 60.8 million
Legislative Mgmt. GF - Potential
Cost
Minimal Minimal
Note: Various=Various; GF=General Fund; Tourism=Tourism Fund

Municipal Impact: None
Explanation
The bill results in the following impacts noted below.
Section 1 results in an annualized revenue loss to the state of $17.4
million and $23.8 million in FY 28 by exempting the sale of gas and
electricity to small businesses from the sales and use tax.1
Sections 2 – 5 result in a revenue loss to the General Fund of $ 89
million in FY 27 and $121.6 million in FY 28 and annually thereafter by
diverting 50% of collections of the additional 1% meals tax to the
Tourism Fund and the municipal revenue diversification fund,

1 By statue, 0.5 percentage points of the 6.35% rate (or 7.87% of collections) is deposited
into the Special Transportation Fund and Municipal Revenue Sharing Fund each. The
remaining 5.35 percentage points (or 84.25% of collections) is deposited into the
General Fund.
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established under the bill.
The bill also results in a corresponding revenue gain of $44.5 million
in FY 27 and $60.8 million in FY 28 and annually thereafter each to the
(1) Tourism Fund and (2) municipal revenue diversification account.
Section 4 also results in a revenue gain to municipalities by requiring
the Department of Revenue Services to distribute the funds from the
municipal revenue diversification account to municipalities as outlined
under the bill.
Section 6 establishes a Connecticut -India Trade Commission
resulting in a potential minimal cost to the Office of Legislative
Management. The bill specifies that commission members serve
without compensation but can be reimbursed for necessary expenses
resulting in a potential cost to the extent reimbursements occur.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.

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OLR Bill Analysis
sSB 2

AN ACT SUPPORTING LOCAL COMMERCE.

SUMMARY
This bill generally does the following:
1. creates a sales and use tax exemption for gas and electricity used
by a commercial or industrial business with gross income of $10
million or less for the prior income or tax year (§ 1);
2. dedicates, starting October 1, 2026, half of the additional 1% tax
on meals and beverages to the Tourism Fund and the other half
to a municipal diversification account that the bill creates for
redistributing the tax revenue to the municipalities where the
sales were generated (§§ 2-5); and
3. establishes a 23 -member Connecticut -India Trade Commission
within the Legislative Department to, among other things ,
advance bilateral trade and investment (§ 6).
The bill also makes technical and conforming changes.
EFFECTIVE DATE: October 1, 2026, and, for the sales and use tax
changes, applicable to sales occurring on or after that date, except the
Connecticut-India Trade Commission is effective upon passage.
§ 1 — NEW SALES AND USE TAX EXEMPTION FOR BUSINESSES
The bill’s sales and use tax exemption for the above qualifying
businesses specifically applies to the sale, furnishing, or service of gas
and electricity when delivered to consumers through mains, lines,
pipes, or bottles for use . This exemption is in addition to separate
existing ones that exempt this gas and electricity (1) in residential
dwellings and (2) if used directly in premises where at least 75% of the
gas or electricity is used (a) for agricultural production, (b) in th e
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making of a finished product for sale, or (c) in an industrial
manufacturing plant. By law, the second existing exemption extends to
manufacturer permittees for (1) beer; (2) a farm winery; and (3) wine,
cider, and mead (CGS § 12-412m).
§§ 2-5 — MEALS AND BEVERAGES TAX DIVERSION TO TOURISM
FUND AND MUNICIPAL DIVERSIFICATION ACCOUNT
Existing law imposes an additional 1% tax on meals and certain
beverages that applies on top of the 6.35% sales and use tax rate. Starting
October 1, 2026, the bill directs 50% of the revenue from this 1% tax to
the Tourism Fund and the other 50% to a muni cipal diversification
account the bill creates. (Under current law, the Tourism Fund receives
10% of room occupancy tax revenue.)
Under the bill, the “municipal diversification account” is a separate,
non-lapsing account that must contain any money required by law to be
deposited into it , including the above tax revenue . The Department of
Revenue Services (DRS) commissioner must use the account’s funds for
making distributions to municipalities according to the bill’s provisions.
Towards making these distributions, the bill requires, starting
October 1, 2026, certain retailers to provide disaggregated meal and
beverage tax sales data in their quarterly sales tax returns . Specifically,
the bill requires this of retailers with sales in more than one town in
Connecticut and who sell other items in addition to meals and
beverages. Under the bill, their returns must indicate the (1) town where
each taxable sale occurred and (2) amount of sales tax they collected in
each town. The bill relatedly requires the DRS commissioner to maintain
an accounting aggregated by municipality of the tax revenue deposited
into the municipal diversification account.
Beginning in the first quarter of 2027, the DRS commissioner must
quarterly distribute money from the municipal diversification account
to each municipality where the revenue from the tax was generated, as
he determines. Any money for which he cannot determine a point of
sale must be distributed proportionally to the municipalities where the
meal and beverage sales were reported during the applicable quarter.
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§ 6 — CONNECTICUT-INDIA TRADE COMMISSION
The bill establishes a Connecticut -India Trade Commission within
the Legislative Department to do the following between Connecticut
and India:
1. advance bilateral trade and investment,
2. initiate joint action on policy issues of mutual interest,
3. promote business and academic exchanges,
4. encourage mutual economic support and infrastructure
investment, and
5. address other issues the commission determines.
To carry out its duties, the bill also authorizes the commission to (1)
get necessary help and data from any executive department, board,
commission, or agency of the state; (2) perform necessary and
appropriate acts; and (3) accept gifts, donations, or bequests.
The bill requires the commission, starting by February 1, 2028, to
annually report to the governor, Department of Economic and
Community Development, and Commerce Committee on its activities
during the prior year. At a minimum, the report must include
recommendations for policy and legislative changes needed to carry out
its duties.
Members
Under the bill, the commission consists of the following 23 appointed
members:
1. two members each appointed by the six top legislative leaders;
2. two Commerce Committee members, one each appointed by the
committee chairpersons;
3. two Commerce Committee ranking members, or their designees;
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4. three members appointed by the governor;
5. one representative of a Connecticut public college or university,
appointed by the governor;
6. one Connecticut chamber of commerce representative, appointed
by the governor; and
7. two representatives of Indian or Indian-American communities in
the state from different political parties, appointed by the
governor.
Under the bill, commission members must be (1) currently or
formerly involved in organizations promoting Indian affairs or (2)
interested in trade relations between Connecticut and India.
Appointments
The bill requires appointing authorities to make their initial
appointments by October 1, 2026, and fill any vacancies. Vacancies
occurring other than by term expiration must be filled for the remainder
of the unexpired term. All members, except those appo inted by the
governor, may be legislators.
Terms
Under the bill, members generally serve four -year terms, until their
successors are appointed, except as follows:
1. initial gubernatorial and House majority and minority leader
appointments end on September 30, 2029;
2. initial House speaker, Senate president pro tempore, and Senate
majority and minority leader appointments end on September 30,
2030; and
3. initial and subsequent Commerce Committee chairperson
appointments end with the appointing committee chairperson’s
term.
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Under the bill, members serve without compensation but are
reimbursed, within available funds, for necessary expenses incurred
performing their duties.
Leadership and Meetings
The bill requires the House speaker and Senate president pro
tempore to select the commission’s chairpersons from among its
members. The chairpersons must schedule and hold the commission’s
first meeting by November 1, 2026.
Under the bill, the commission must meet as often as the chairpersons
or a majority of the members deem necessary. Members who miss three
consecutive meetings or 50% of the meetings in a calendar year are
deemed to have resigned. A majority of members is a quorum for
conducting business.
The bill requires the Commerce Committee’s administrative staff to
serve in this capacity for the commission.
BACKGROUND
Related Bills
sSB 132 (File 70), § 2, as amended by Senate “A,” favorably reported
by the Commerce Committee and passed as amended by the Senate,
creates a similar Connecticut-India Trade Commission.
sSB 133 (File 71), favorably reported by the Commerce Committee,
creates a similar Connecticut-India Trade Commission.
sHB 5443, §§ 1 & 2, favorably reported by the Finance, Revenue and
Bonding Committee, directs 50% of the additional 1% sales and use tax
on meals and beverages to the Tourism Fund.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable Substitute
Yea 50 Nay 3 (04/01/2026)