State Lawmakers Float Delivery Tax

Connecticut lawmakers are considering a 28-cent retail delivery tax, covering deliveries by motor vehicle of all goods subject to state sales and use taxes.

The General Assembly’s Transportation Committee held a public hearing March 10 on SB 1447, which also includes a tax on peer-to-peer car sharing of 30 days or less.

Retailers would be required to file quarterly returns, with the delivery tax linked to the consumer price index and adjusted annually.

Similar proposals in other states have met with swift opposition.

In Colorado, where a similar fee was recently enacted, businesses report excessive compliance costs associated with the new tax, as well as increases in prices for consumers.

Louisiana, Nebraska and Maryland dropped proposals to add or increase delivery fees or taxes in 2024, and Hawaii, Indiana, and Mississippi rejected similar proposals this year.

‘Regressive’

Proponents of the bill cite the need to invest in infrastructure and the state’s Special Transportation Fund.

However, the fee’s regressive nature will negatively impact consumers and businesses, notably small businesses already operating on thin margins and residents struggling to make ends meet.

“Adding additional fees or taxes on small businesses—and ultimately consumers—does not improve the cost of doing business or living in Connecticut, but instead does the opposite,” CBIA’s Paul Amarone told committee members. 

“Adding taxes on small businesses—and ultimately consumers—does not improve the cost of doing business or living in Connecticut.”

CBIA’s Paul Amarone

“While we support the committee’s efforts to fund transportation and infrastructure projects, we recommend utilizing existing funds within the state’s $55 billion budget.

“In addition, the 2021 CREATES Report—commissioned by the legislature—identifies hundreds of millions of dollars in savings through government efficiencies and streamlining services.”

Advocates representing the restaurant, retail, and food delivery industries also testified in opposition to the proposed tax.

“The added delivery tax will result in higher prices for consumers by placing an additional burden on customers who are already coping with inflation and the rising cost of living,” said Scott Dolch, president and CEO of the Connecticut Restaurant Association.

---

For more information, contact CBIA’s Paul Amarone (860.244.1978).