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Read. Follow. Verify.Connecticut exempts small business utilities from sales tax, redirects meals tax revenue to tourism and towns, and creates trade commission
Last action · April 20, 2026: File Number 693Sponsors: Martin Looney and 32 others
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What This Bill Proposed
Starting October 1, 2026, Senate Bill 2 exempts commercial and industrial businesses with gross incomes of $10 million or less from es on gas and electricity. It also splits the additional 1% tax on meals and beverages equally between the Tourism Fund and a new , and establishes a 23-member Connecticut-India Trade Commission.
Qualifying small businesses save on utility costs, municipalities and the Tourism Fund receive redirected tax revenue streams starting in 2027, and a new legislative commission is formed to advance bilateral trade with India.
Who It Would Have Affected
Groups the bill's text would have affected, as described in the record. Being affected is not a position for or against it.
Commercial and industrial businesses with $10 million or less gross income
These businesses become exempt from sales and use taxes on gas and electricity purchases starting October 1, 2026.
Municipalities
Municipalities receive quarterly distributions of tax revenue from the newly established municipal diversification account starting in 2027.
Tourism Fund
The fund receives 50% of the revenue collected from the additional 1% tax on meals and beverages beginning October 1, 2026.
Key Facts
- Exempts commercial and industrial businesses with gross income of $10 million or less for the previous income or taxable year from sales and use tax on gas and electricity deliveries.
- Diverts 50% of collections from the additional 1% tax on meals and beverages to the Tourism Fund starting October 1, 2026.
- Diverts the other 50% of collections from the additional 1% meals and beverage tax to a newly created municipal diversification account.
- Establishes the municipal diversification account as a separate, non-lapsing account administered by the Commissioner of Revenue Services.
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- Requires the Department of Revenue Services to distribute funds from the municipal diversification account quarterly to municipalities starting in the calendar quarter ending March 31, 2027.
- Requires multi-town retailers who sell items other than meals to disaggregate their quarterly return information to show sales of meals and tax collected by town, starting October 1, 2026.
- Establishes a 23-member Connecticut-India Trade Commission within the Legislative Department to advance bilateral trade and investment.
- Requires initial appointments to the Connecticut-India Trade Commission to be made by October 1, 2026.
- Requires the Connecticut-India Trade Commission to submit an annual report to the Governor, the Department of Economic and Community Development, and the Commerce Committee starting by February 1, 2028.
Frequently Asked Questions
Which businesses qualify for the new sales and use tax exemption on gas and electricity?
Where does the revenue from the additional 1% meals and beverages tax go under the bill?
What is the purpose of the newly established Connecticut-India Trade Commission?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
This bill did not become law - Died at adjournment · on the Senate floor.
Procedural history
12 actions- Apr 20, 2026Connecticut General AssemblyFile Number 693
- Apr 20, 2026SenateSenate Calendar Number 424
- Apr 20, 2026SenateFavorable Report, Tabled for the Calendar, Senate
- Apr 20, 2026Connecticut General AssemblyReported Out of Legislative Commissioners' Office
- Apr 13, 2026Connecticut General AssemblyReferred to Office of Legislative Research and Office of Fiscal Analysis 04/20/26 12:00 PM
- Apr 1, 2026Connecticut General AssemblyFiled with Legislative Commissioners' Office
Show 6 earlier actions
- Apr 1, 2026Connecticut General AssemblyJoint Favorable Substitute
- Mar 23, 2026Connecticut General AssemblyPublic Hearing 03/27
- Mar 20, 2026Connecticut General AssemblyCommitteeReferred to Joint Committee on Finance, Revenue and Bonding
- Mar 19, 2026Connecticut General AssemblyDrafted by Committee
- Feb 13, 2026Connecticut General AssemblyVote to Draft
- Feb 4, 2026Connecticut General AssemblyCommitteeReferred to Joint Committee on Finance, Revenue and Bonding
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
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Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Meals Tax Diversion to Municipalities and Tourism
The bill shifts a significant portion of existing meals tax revenue away from general state funds directly into dedicated tourism and municipal accounts starting in late 2026.
Connected Entities
Sources
cga.ct.gov
Analysis Score
0–100- Significance20Lowered because this bill did not pass (its text scored 75)
- Controversy35Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz40Current news / social attention level
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