Lawmakers, Businesses Back Tourism, Energy Bill

A bipartisan group of lawmakers and business advocates are backing a proposal that lowers small business energy costs and reinvest existing tax revenue into local communities and the state’s tourism economy.

At the center of that effort is SB 2, a wide‑ranging bill and priority measure for Senate Democrats designed to reduce operating costs for employers while strengthening local commerce.

Connecticut businesses already face some of the highest electricity costs in the nation.

Those costs place added pressure on employers deciding whether to hire, invest, or raise prices.

A key provision of the bill removes gas and electricity from the state sales tax for qualifying businesses—delivering immediate cost relief.

Energy Cost Relief

Connecticut’s sales tax exemption for electricity and natural gas largely currently applies only to manufacturing and certain industrial processes.

SB 2 broadens that exemption to commercial and industrial businesses with less than $10 million in gross income, regardless of how the energy is used.

“By reducing the sales tax, we can immediately save these small businesses 6.35% on their electric bill overnight,” CBIA vice president of public policy Chris Davis said during a March 27 news conference.

Davis was joined by a bipartisan group of lawmakers, local leaders, and advocates.

“This bill does even more than just helping tourism in our towns,” said Connecticut Restaurant and Hospitality Association president and CEO Scott Dolch.

“Obviously, with the utility costs—operators that are here, their eyes are gleaming that this could pass.”

Staying Competitive

CBIA senior policy director Pete Myers reinforced that message in his testimony during a public hearing on the bill.

“Their energy bill is not unlike any other part of their business—costs are increasing, and this provides some real relief,” Myers said.

Myers also pointed to neighboring states as examples of how Connecticut can remain competitive.

Rhode Island completely removed the sales tax on energy bills and Massachusetts had done so for its smallest businesses.

“This is another step that allows Connecticut to better compete with our surrounding states and gives employers more opportunity to reinvest in their businesses and grow their workforce,” Myers said.

 “This is the only policy the legislature can enact that immediately lowers energy costs for our employers,” added Davis.

“When you combine it with long‑term tourism growth, it becomes a real home run for economic development.”

Boosting Tourism

Beyond energy relief, SB 2 includes a provision redirecting revenue from the state’s existing 1% meals and beverage tax.

The bill splits the revenue between municipalities and the state’s Tourism Fund to support hospitality, tourism marketing, and local economic development.

Connecticut has collected the meals and beverage tax since 2019, with the revenue going to the state’s general fund.

Dolch said that tax has generated over $550 million, including about $120 in fiscal year 2025.

“It’s important for us to commit to tourism—not just in one region, but in every corner of our state.”

Sen. Cathy Osten

“This isn’t a new tax for consumers,” he said. “This is diverting the money back where it’s being invested—and where it should be helping.”

Supporters say reinvestment is critical to sustaining hotels, restaurants, and tourism businesses that serve as economic anchors in their communities.

“For every dollar we put into tourism, we get nine dollars back in return,” said Sen. Cathy Osten (D-Baltic), co-chair of the legislature’s Appropriations Committee.

“It’s important for us to commit to tourism—not just in one region, but in every corner of our state.”

Help for Municipalities

Advocates also stressed that events and conventions generate significant economic activity.

However, they often leave municipalities shouldering the cost of public safety and infrastructure.

“It diversifies revenue at the local level, helps stabilize property taxes, and creates the incentive for towns to host events.”

CCM’s Joe DeLong

“There’s lots of things out there that we miss on because we don’t have an active person soliciting their business,” said Rep. David Rutigliano (R-Trumbull).          

“This bill changes that,” said Joe DeLong, executive director of the Connecticut Conference of Municipalities.

“It diversifies revenue at the local level, helps stabilize property taxes, and creates the incentive for towns to host events that bring people—and spending—into their communities.”

Shared Benefits

Business owners said statewide marketing and reinvestment at the local level create broad, shared benefits.

“This isn’t just policy, it’s practical,” said restaurateur Aubrey Lamonica, who owns Tate’s and Eli Cannon’s in Middletown.

“This isn’t just policy, it’s practical.”

Restaurateur Aubrey Lamonica

“It’s about whether local businesses like mine can continue to survive and thrive and support the communities that they’re a part of.”

“We hear a lot from members that Connecticut has a lot of hidden gems,” Myers added.

“If we’re able to devote funding to tourism and advertising, they won’t be hidden gems anymore. They’ll just be gems of our state that are known because of strong, effective advertising.”

Sending a Message

In addition to energy relief and tourism investment, SB 2 includes provisions to establish a Connecticut‑India Trade Commission.

The goal of that commission is to expand international trade and business opportunities.

“We need to make these changes that will help our cities.”

Rep. Farley Santos

Taken together, proponents say SB 2 addresses affordability, competitiveness, and long‑term growth.

“We want to send a message—it’s needed,” said Rep. Farley Santos (D-Danbury).

“We need to make these changes that will help our cities.”