Budget & Taxes (Tax Incentives)

This bill creates a new tax mechanism called a productivity gap surcharge that applies to Connecticut employers who significantly reduce their workforce payroll while maintaining or increasing their gross revenue. The law defines a productivity gap as occurring when an employer cuts payroll by more than 5% while keeping revenue stable or growing, and it specifically targets efficiency gains achieved through collaborative technology like AI that augments rather than replaces workers. Employers facing this gap would pay an annual surcharge calculated on the difference between their historical productivity levels and current reduced labor costs, while simultaneously receiving a permanent tax exemption on revenue generated through workforce augmentation. All surcharge funds collected must be deposited into a dedicated account used exclusively for workforce retraining, technical education, and career transition programs for displaced employees.

This bill would remove sales tax on machinery and equipment used by paint retailers to mix or color paint. It directly affects retail businesses that sell paint, as they would no longer pay tax on the specific tools used to customize paint colors for customers. The exemption applies to the purchase, storage, use, or consumption of these machines within the state. The bill does not exempt the paint itself or other types of equipment.

This bill exempts the purchase of COVID-19 at-home test kits from state sales and use taxes. It directly affects consumers who buy these kits for personal use, removing the tax burden on these specific products. The key provision amends tax law to exclude these kits from taxable sales, meaning buyers pay no state tax when purchasing them. The exemption applies to both the sale and any subsequent use or consumption of the kits within the state.