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SB 118

AN ACT ELIMINATING STATE TAXES OR FEES FOR WHICH COLLECTION COSTS EXCEED THE REVENUE RECEIVED.

2025 Regular Session Introduced by Rob Sampson

SB 118 would eliminate Connecticut state taxes and fees whose collection costs exceed revenue generated, prioritizing administrative efficiency over revenue retention.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#fees #taxation
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Bill Summary · SB 118

Legislative bill overview

SB 118 would eliminate state taxes or fees in Connecticut where the administrative cost of collecting them exceeds the revenue generated. The bill targets inefficient tax collection mechanisms that drain state resources through bureaucratic overhead. This represents a streamlining measure focused on fiscal efficiency rather than tax policy reform.

Why is this important

State governments spend significant resources collecting relatively small revenue amounts through certain taxes and fees, creating a net negative fiscal outcome. Eliminating these inefficient collections could reduce government spending and simplify tax administration, though the actual savings depend on which specific taxes qualify and whether collection costs are accurately measured. Connecticut currently operates with a complex tax code that may include numerous low-revenue items that consume disproportionate administrative resources.

Potential points of contention

  • Defining "collection costs": Determining what counts as collection costs is subjective—should it include only direct administrative expenses, or also compliance burden on businesses and citizens? This definition significantly affects which taxes get eliminated.
  • Revenue stability concerns: Some "low-revenue" taxes serve regulatory or behavioral purposes beyond pure revenue generation (like environmental fees or licensing charges meant to discourage certain activities), making elimination problematic despite low net revenue.
  • Implementation challenges: Identifying which taxes qualify requires detailed cost accounting that may not currently exist, potentially creating disputes over which taxes should be cut and raising questions about whether the audit itself costs more than the savings.

Compiled from official sources — confirm details with the bill’s official record.

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