On April 22, 2021, the Connecticut General Assembly’s Joint Committee on Finance Revenue and Bonding (“Joint Committee”) approved a revised revenue bill (HB6443) to implement the Connecticut state budget. We have learned that the revised bill includes: (1) a new digital advertising services tax; and (2) a new wage compensation tax, whereby, at an employee’s or independent contractor’s election, an employer would be required to pay a tax equal to 5% of the electing employee’s wages or electing independent contractor’s payments. As reported in a prior legal alert, both of these tax proposals were included in a bill introduced by the Joint Committee on April 14. But as of publication, it is not clear whether there have been any revisions to the previously proposed statutory language.
Connecticut budget legislation (including the revenue bill) is expected to be finalized by the end of June. In the interim, negotiations between leadership of both houses of the General Assembly, along with the Governor’s office, may lead to any number of changes to the revenue bill—including to the digital advertising services and wage tax proposals.