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Regional Gas Tax Moving Forward – Could Add $.75 to the Retail Price of Gasoline in CT!

The implementation of a Northeast regional cap and trade system for gasoline distribution took a step forward today when the Transportation and Climate Initiative released a draft memorandum of understanding with participating states, including Connecticut.

The TCI plan would essentially raise the cost of gasoline by imposing an emissions cap and forcing gasoline distributors to purchase carbon allowances at auction. Although the exact price increase will vary from state to state, a similar program in California increased the cost of gasoline by nearly 14 cents per gallon, according to a report by the California Energy Commission.

TCI would then continually lower the cap year-over-year, forcing gasoline distributors to purchase more allowances and potentially increasing the cost of gasoline further.

The funds raised from the cap and trade program will be distributed to participating states to invest in mass transit, electric vehicles and potentially reduce vehicle usage by increasing the cost of driving in an effort to combat climate change.

Proponents of the TCI cap and trade model say 40 percent of greenhouse gas emissions are due to transportation and believe that increasing the cost of gasoline will push people to use more environmentally friendly alternatives.

Gov. Ned Lamont has supported the initiative along with governors Andrew Cuomo in New York and Charlie Baker in Massachusetts.
But the imposition of higher gasoline prices in Connecticut may be difficult for Lamont, who has already exhausted much political capital trying to pass various tolling and transportation plans.

The imposition of a new gasoline tax might prove even less popular with the public.

According to TCI, the MOU is scheduled to be signed in spring of 2020, but signing on to a multi-state compact to increase the price at the pump may be difficult for Lamont and the legislature as it moves into the 2020 election cycle.

Connecticut currently has two taxes on gasoline: a 25-cent gasoline tax and a gross receipts tax on petroleum companies that is passed onto the consumer, increasing the overall cost per gallon. Connecticut has the seventh highest gasoline taxes in the country.

Those fuel taxes go into the Special Transportation Fund to fund road repair, the Department of Transportation, transportation debt and mass transit in the form of buses and trains. Funding for public transportation has grown significantly over the past eight years, according to a review of the STF.
Coinciding with TCI’s release of its project plan, a coalition of 18 organizations along the Atlantic coast, including state chapters of the National Federation of Independent Businesses, American for Tax Reform and the Institute for Energy Research, released an open letter opposing the plan and labeling it a regressive “sin tax” on gasoline.

We do not believe that driving to work, driving for work, transporting children to school, transporting goods, going to the grocery store, and all the other necessary activities that generally require a vehicle should be treated by governments as a sin. These are not activities people can, or should be forced to, avoid.

Authors of open letter opposing the TCI plan

“Make no mistake, this is a tax. A carbon tax being implemented through a gas tax,” the authors from fifteen states wrote. “But unlike motor fuel taxes levied in order to pay for roads, bridges, and transportation infrastructure (a reasonable fee for use), TCI would be the equivalent of a ‘sin tax’ – a penalty for engaging in bad behavior. We do not believe that driving to work, driving for work, transporting children to school, transporting goods, going to the grocery store, and all the other necessary activities that generally require a vehicle should be treated by governments as a sin. These are not activities people can, or should be forced to, avoid.”

Gov. Dannel Malloy signed on to the original idea in 2010 and the issue is being handled by the Connecticut Department of Energy and Environmental Services. DEEP Commissioner Robert Klee has also indicated his support for the proposal in 2018.
“By signing onto the TCI commitment, Connecticut and the region are taking an important step forward to help protect the health and safety of our residents,” Klee wrote in his endorsement the TCI plan. “Over the next year we will work closely with our regional partners to design a proposal that can be adopted by our states and implemented regionally.”

But how Connecticut would engage in the TCI compact – whether it will be through a legislative vote or through executive action by Lamont – remains to be seen.
Massachusetts Governor Baker has already indicated that he will take unilateral action through executive order, although most other states will likely go to their legislatures.

Connecticut currently participates in the Regional Greenhouse Gas Initiative, that imposes a similar cap and trade framework on energy companies to help fund Connecticut’s quasi-public Green Bank, which then uses the funds to subsidize solar energy investments.

According to CT DEEP’s website, the program has raised $193 million since 2008. The Green Bank is also funded by a charge on consumers’ electric bills, and the fund has been raided by the legislature in the past to help fill budget gaps.

Connecticut residents pay the highest electricity costs in the continental United States.

Although the TCI plan would increase the cost of gasoline, those funds would likely not be used to fund projects to benefit drivers. The goal, rather, is to lessen the use of single-occupancy vehicles and shift more commuters toward mass transit and electric vehicles.

“Signatory Jurisdictions will establish in the final memorandum of understanding (MOU) a regional carbon dioxide emissions cap that will decline over time, to reduce emissions from on-road diesel and finished motor gasoline, and an objective methodology for apportioning proceeds to each Participating Jurisdiction, to invest at each jurisdiction’s discretion to support the goals of the program,” the MOU says.


CT Meal Tax Explained

New CT Food Tax Changes: Here’s What You Need To Know
It’s been a rollercoaster ride over what items at grocery stores will be taxed. Here’s the latest changes.
By Rich Scinto, Patch Staff

HARTFORD, CT — Gov. Ned Lamont announced late Thursday that the Department of Revenue Services has released a new policy statement that reduces the number of items that are subject to the upcoming prepared food tax.
“The original guidance created by DRS was too broadly interpreted and not reflective of what was intended when the budget was passed,” Lamont said.
DRS releases policy statements that help consumers and businesses interpret how to apply new tax changes. Connecticut passed a new law set to go into effect Oct. 1 that raises restaurant and other prepared meals tax from the base sales tax rate of 6.35 percent to 7.35 percent.
DRS’s initial policy statement released in early September included a broad scope of items that fell under the tax, including bags of lettuce that are eight ounces or less and up to five loose cookies bought at one time.
“The DRS has determined that there is an alternative, and defensible, interpretation that more closely aligns with the language of the statute and the clear intent of the Legislature,” wrote DRS Commissioner Scott Jackson in a letter to Lamont.

Below is a section of the new policy statement that details what falls under the tax:
• Catering services performed by a supermarket
• Sales of sandwiches, grinders, coffee, or tea prepared in a supermarket at a delicatessen counter or elsewhere for takeout. The sales of these items sold anywhere in a supermarket are taxable;
• Sales of meals in areas of a supermarket where food is intended to be consumed in the supermarket, such as at snack bars or food courts. The meals sold in these designated eating areas are taxable even if taken off premises by the purchaser.

Legislative Republicans decried the tax and said it would hurt middle class families. They have called for a special session to clarify the law. Republican Senate leader Len Fasano said that Republicans weren’t in favor of the extra one percent tax to begin with, but that it was up to Democrats to fix language in the bill if they wanted to keep it.

Fasano also said that changing policy statements when they become politically unpopular sets a dangerous precedent where laws can be interpreted by a handful of people.

The now-outdated original DRS policy statement interpreted the tax as follows:
· Sandwiches, grinders, and wraps;
· Popsicles, ice cream cones, cups, sundaes, and other individual servings of frozen desserts unless sold in factory prepackaged multi-unit packs; ·
Ice cream, frozen yogurt, and other frozen desserts sold in containers of less than one pint; · Salads sold at salad bars;
· Lettuce or greens-based salads sold in containers of 8 ounces or less;
· Salads that are not greens-based (macaroni, potato, pasta, fruit, etc.) sold in containers of 8 ounces or less; · Donuts, muffins, rolls, bagels, and pastries (5 or fewer);
· Cookies sold loose (5 or fewer when cookies are sold by quantity, or less than 8 ounces when cookies are sold by weight);
· Pies or cakes by the slice;
· Prepackaged or factory-sealed bags or packages of 5 ounces or less of chips, popcorn, kettle corn, nuts, trail mix, crackers, cookies, snack cakes, or other snack foods, unless sold in factory prepackaged multi-unit packs; · Pizza, whole or by the slice; · Cooked chicken sold by the piece, including buckets of chicken, and whole cooked chickens;
· Cooked ribs sold by the piece or portion and whole racks of ribs;
· Hot dogs served on a bun or heated;
· Bagels that are individually prepared; · Soup sold in containers of 8 ounces or less, unless sold in factory prepackaged units;
· Smoothies;
· Meal replacement bars;
· All beverages provided with the sale of a taxable meal;
· Food sold at a hot buffet;
· Food that is cooked to order;
· Popcorn, kettle corn, nuts and any other snack foods that are kept warm for purchase; and
· Items such as salads, side dishes, and rolls, when sold as part of family pack meals typically including, whole chickens or buckets of chicken, when prepared and sold for immediate consumption, even when the items exceed the weight or quantity limits specified above.

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GASDA creates New Discount Auto & Liability Insurance Programs for Gasoline & Auto Repair Shops Owners – Click Below for more information.

GASDA New Ad 4-10-16

CT Senator Murphy Proposes to Raise Federal Gas Tax 12-cents over two year!

Click Here to see complete proposal – Email comments to >CT Senator Murphy proposal to Raise the Federal Gas Tax 12-cents over two years 6-19-2014


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