How Much Is Tax in Connecticut? Income, Sales & Property

Connecticut’s tax structure encompasses a variety of levies that contribute to both state and local government revenues. Understanding these different taxes is important for residents and individuals engaging in economic activities within the state.

Connecticut Individual Income Tax

Connecticut imposes a progressive individual income tax, meaning higher earners pay a larger percentage of their income in taxes. For the 2024 tax year, the state utilizes a system with seven tax brackets, with rates ranging from 2% to 6.99%. The specific rate applied depends on an individual’s taxable income and their filing status.

Taxpayers determine their liability based on their filing status, which generally aligns with federal classifications: single, married filing jointly, married filing separately, head of household, and qualifying widow(er). Each status has different income thresholds for its respective tax brackets. For instance, a single filer’s initial income is taxed at the lowest rate, while a married couple filing jointly will have higher income thresholds before reaching higher tax brackets.

Common forms of income subject to this tax include wages, salaries, interest, and dividends. Individuals must file a Connecticut income tax return if their gross income exceeds certain thresholds, such as $15,000 for single filers or $24,000 for those married filing jointly. Connecticut also provides certain deductions and credits that can reduce taxable income or the final tax liability.

Personal exemptions are available and can reduce taxable income for filers whose adjusted gross income falls below certain thresholds. Social Security benefits may be partially or fully deductible depending on federal adjusted gross income levels. A credit for taxes paid to other states is also available, preventing double taxation on income earned outside Connecticut but taxed by the state.

Connecticut Sales and Use Tax

Connecticut levies a sales and use tax on the retail sale of most tangible personal property and certain services. The general statewide sales tax rate is 6.35%. This rate applies to a broad range of goods, from clothing and electronics to digital products and some services.

Specific goods and services are subject to higher or specialized sales tax rates. For example, meals and certain beverages are taxed at 7.35%. Luxury items, including most motor vehicles with a sales price over $50,000, jewelry exceeding $5,000, and clothing or footwear priced over $1,000, are taxed at 7.75%. Short-term passenger motor vehicle rentals are taxed at 9.35%, while computer and data processing services are taxed at 1%.

The use tax complements the sales tax, ensuring that taxable purchases made outside Connecticut are still subject to taxation if brought into the state for use. This applies to individuals and businesses acquiring goods or services from out-of-state retailers, including online or mail-order companies. The use tax rate is generally identical to the sales tax rate that would have been applied had the purchase occurred within Connecticut.

Connecticut provides exemptions for several categories of goods and services. Unprepared food items for home consumption are generally exempt from sales tax. Prescription drugs, medical devices, and certain medical equipment are also exempt.

Connecticut Property Taxes

Property taxes in Connecticut are primarily levied at the local level by individual cities and towns. Property tax bills are determined by a combination of a property’s assessed value and the local mill rate.

The assessed value of real estate and motor vehicles is typically set at 70% of its fair market value. This assessed value is then multiplied by the municipality’s mill rate to calculate the annual property tax. A mill represents $1 of tax for every $1,000 of assessed value; for instance, a mill rate of 20 mills means a tax of $20 for every $1,000 of assessed value.

Motor vehicles are also subject to local property tax. The assessment for motor vehicles is based on 70% of their average retail value, which is determined by local assessors using standardized depreciation schedules. For vehicles registered after the October 1st assessment date, taxes may be prorated from the month of registration through the following September.

Property tax amounts can differ significantly across municipalities due to varying values and mill rates. Tax bills for the October 1st Grand List are typically due by July 1st in most towns, with supplemental bills often due in January.

Other Notable Connecticut Taxes

Connecticut imposes several other taxes that affect residents and businesses. These include taxes on estates, gifts, real estate conveyances, and motor fuels.

The Connecticut Estate Tax applies to the estates of individuals who die as residents of the state, or to non-residents owning real or tangible personal property within Connecticut. For deaths occurring in 2025, the estate tax exemption amount is $13.99 million. Estates exceeding this threshold are subject to a flat tax rate of 12% on the taxable amount. Unlike federal law, Connecticut’s estate tax system does not offer “portability,” meaning a surviving spouse cannot use any unused exemption from a deceased spouse.

Connecticut levies its own Gift Tax. For gifts made on or after January 1, 2025, the lifetime exemption amount for gifts also aligns with the estate tax exemption at $13.99 million. Gifts exceeding this cumulative lifetime total may be subject to a 12% tax rate.

The Real Estate Conveyance Tax is imposed on the sale of real property and is typically paid by the seller at closing. This tax has both state and municipal components. The state portion is tiered based on the sale price: 0.75% on the first $800,000, 1.25% on the amount between $800,001 and $2,500,000, and 2.25% on amounts exceeding $2,500,000. Municipal rates are generally 0.25% of the sale price, though certain “targeted investment communities” can charge up to 0.50%. Higher rates may apply if the purchaser is not an individual.

Connecticut also imposes a Motor Fuels Tax. As of July 1, 2025, the tax rate for gasoline is 25 cents per gallon. The diesel fuel tax rate is $0.489 per gallon, effective from July 1, 2025, through June 30, 2026.