New Year – New Laws

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New Year – New Laws

By Emanuela Palmares

With the New Year come new laws that may have an impact on you, your business or your community. Some are new taxes that went into effect on January 1, 2020, such as:

Dry Cleaning – The existing state sales tax rate will be expanded to dry cleaning services and laundry services

Parking – The existing state sales tax rate will be expanded to parking fees

– Safety Apparel – Tax-exempt status on safety apparel will be repealed, subjecting these items to the existing sales tax rate (reflective vests, protective gloves, etc.)

Tribuna has highlighted other noteworthy new laws below:

Education and Higher Education

African-American and Black and Puerto Rican and Latino Studies

Under a new law, all public-school districts must (1) include African-American and black and Puerto Rican and Latino studies in their curriculum beginning with the 2021-22 school year and (2) offer a black and Latino studies high school course in the 2022-23 school year. The State Education Resource Center must develop the high school course using curriculum material that the State Board of Education (SBE) makes available, as well as public or private materials, resources, and personnel with appropriate expertise. The SBE must review and approve the course by January 1, 2021 (PA 19-12, various effective dates).

Public Health Opioid Use

In this session, the legislature continued to address issues associated with opioid abuse. It passed a new law that, among other things, requires:

  1. Any practitioner who prescribes a patient more than a 12-week supply of an opioid drug to establish a treatment agreement or discuss a care plan for chronic opioid drug use;
  2. Higher education institutions to develop and implement a policy on the availability and use of opioid antagonists (e.g., Narcan) by students and employees;
  3. Department of Mental Health and Addiction Services-operated or –approved treatment programs to educate patients with opioid use disorder, and their relatives and significant others, on opioid antagonists and how to administer them; and
  4. Hospitals to administer a mental health screening or assessment, if medically appropriate, to patients treated for a nonfatal opioid drug overdose (sHB 7159, as amended by House “A,” various effective dates).

Health Insurance Cost-Sharing

A new law limits the maximum out-of-pocket expenses that certain health insurers may charge, such as copayments, coinsurance, and deductibles. Under this law, health insurance plans cannot impose cost-sharing that exceeds (1) the amount paid to the provider for the covered service, (2) an amount calculated based on how much the provider charges, or (3) the amount an insured would have paid to the provider without using his or her insurance (HB 7424,§§ 236 & 237, as amended by House “A” and “B,” effective January 1, 2020).

Health Insurance Coverage for Mammograms and Ultrasounds

Under this new law, certain health insurance policies must expand coverage for breast ultrasounds to include women whose physicians recommend it and who (1) are ages 40 and older, (2) have a family history or prior personal history of breast cancer, or (3) have a prior personal history of benign breast disease. Additionally, it also prohibits these policies from charging coinsurance, copayments, deductibles, and other out-of-pocket expenses for covered breast ultrasounds and mammograms (HB 7424, §§ 209 & 210, as amended by House “A” and “B,” effective January 1, 2020).

Income Tax

Among its income tax provisions, the budget act:

  1. Extends to the 2019 and 2020 tax years the eligibility limits for the property tax credit against the personal income tax;
  2. Reduces the pass-through entity tax credit from 93.01% to 87.5% of a member’s share of taxes paid by the entity; and
  3. Delays by two years the scheduled increase in the teacher pension income tax exemption from 25% to 50% (HB 7424, §§ 332-335, as amended by House “A” and “B,” effective upon passage and generally applicable to tax years beginning on or after January 1, 2019)

Sales and Use Tax

The budget act makes several sales and use tax changes, including:

  1. Extending the tax to specified parking services; dry cleaning and laundry services (excluding coin-operated services); and interior design services, except business-to-business services;
  2. Increasing the rate on sales of meals and beverages from 6.35% to 7.35%;
  3. Increasing the rate on digital goods and certain electronically delivered software from 1% to 6.35%; and
  4. Lowering the threshold for sales tax economic nexus and broadening its application (HB 7424, §§ 319-328, as amended by House “A” and “B,” various effective dates).

Business Taxes and Fees

The budget act’s business tax and fee changes include:

  1. Eliminating the business entity tax as of January 1, 2020;
  2. Phasing out the capital base tax on corporations over four years from 2021 to 2024;
  3. Extending the 10% corporation business tax surcharge for two additional years to the 2019 and 2020 income years;
  4. Increasing, from $20 to $80, the fee that foreign and domestic limited partnerships, limited liability companies, and limited liability partnerships must pay for filing an annual report with the secretary of state;
  5. Extending the angel investor tax credit program by five years to 2024, increasing the aggregate amount of credits that may be reserved under the program, and increasing the total amount of credits allowed to any angel investor; and
  6. Decreasing, from 70% to 50.01%, the amount by which a company may reduce its tax liability using research and development and Urban Reinvestment Act tax credits (HB 7424, §§ 338-347 & 349, as amended by House “A” and “B,” various effective dates)

Transportation

Extended Driver’s License, Identity Card, and Vehicle Registration Renewal Periods

A new law extends the maximum renewal periods for (1) driver’s licenses and identity cards from six to eight years and (2) most vehicle registrations from two to three years. Fees for these extended renewal periods are generally proportional to their respective six-year and two-year fees (SHB 7201, as amended by House “A,” effective January 1, 2020).

 

Source: Connecticut Office of Legislative Research (OLR) & Office of Fiscal Analysis (OFA)

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January 13, 2020

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