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Bill

SB 185

AN ACT EXEMPTING SMALL BUSINESSES FROM THE SALES AND USE TAXES ON ELECTRICITY AND NATURAL GAS.

2026 Regular Session Introduced by Craig Fishbein and 1 co-sponsor

Connecticut bill exempts small businesses from sales and use taxes on electricity and natural gas to reduce operational costs but sacrifices state tax revenue.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#electricity #naturalgas #salesandusetaxexemptions #smallbusinesses
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Bill Summary · SB 185

Legislative bill overview

SB 185 would exempt small businesses in Connecticut from sales and use taxes on electricity and natural gas purchases. The bill targets businesses below a certain size threshold, reducing their operational energy costs. This exemption would apply to both fuels used directly in business operations.

Why is this important

Energy costs represent a significant operational expense for small businesses, and this tax exemption could improve their competitiveness and profitability. However, the exemption reduces state tax revenue, which currently funds public services, and raises questions about whether this is the most equitable or effective way to support small business growth.

Potential points of contention

  • Revenue impact and fiscal sustainability: The bill would reduce state tax collections on energy sales, requiring either budget cuts elsewhere or revenue replacement through other means
  • Definition of "small business": The specific size threshold used to qualify matters greatly—too broad and revenue loss is substantial; too narrow and few benefit
  • Fairness concerns: Large corporations would continue paying these taxes while small competitors gain a cost advantage, potentially creating market distortions or raising questions about unequal treatment
  • Targeted relief vs. across-the-board cuts: Policymakers may debate whether this is the best use of tax policy compared to direct subsidies, grants, or other support mechanisms for small businesses

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

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