Effective October 1, 2026, Connecticut has replaced its multi-tiered, potency-based cannabis excise tax with a single flat rate of 10.75% of gross receipts on all adult-use cannabis retail sales. Under the prior structure, retailers calculated tax on a per-milligram-of-THC basis across three product categories—flower, edibles, and all other products. The new law collapses all three into one percentage-of-sale
Connecticut has long offered research and development tax credits to C corporations through the corporation business tax. Now, for the first time, the state has extended a targeted R&D credit to qualifying pass-through businesses. Signed into law by Governor Lamont on May 26, 2026, Public Act 26-68, § 267, creates an income tax credit for
Connecticut recently enacted two significant changes to its corporation business tax that may affect how businesses compute their state tax liability and, in some cases, may create additional tax obligations for prior years. These changes were enacted as part of Public Act No. 26-68, §§ 265–266 and are effective as of May 26, 2026.
The
Connecticut retailers now face two overlapping sales tax developments this summer: a temporary, one-week expansion of the state’s back-to-school sales tax holiday, and a separate, permanent exemption for nonelectronic school supplies that applies year-round.
Continue Reading Connecticut Expands Its Sales Tax Free Week and Creates a Year-Round School Supplies Sales Tax Exemption
On June 18, 2026, the Internal Revenue Service released Notice 2026-40, announcing Treasury’s intent to issue proposed regulations implementing the amendments to the Qualified Opportunity Zone (QOZ) rules enacted as part of the One, Big, Beautiful Bill Act (OBBBA). The Notice provides important interim guidance for investors, Qualified Opportunity Funds (QOFs), and Qualified Opportunity Zone
On June 16, 2026, the Connecticut Supreme Court unanimously rewrote the playbook for estate tax domicile disputes. In Daniels v. Commissioner of Revenue Services, SC 21150, the Court held that an estate challenging the Department of Revenue Services’ (“DRS”) residency determination in Connecticut Superior Court need only prove domicile by a “preponderance of the
On December 18, 2025, President Trump issued an executive order, “Increasing Medical Marijuana and Cannabidiol Research” directing the U.S. Attorney General to reclassify cannabis from a Schedule I controlled substance to a Schedule III controlled substance under the Controlled Substances Act. The Executive Order notes that cannabis’ current classification has impeded medical marijuana and CBD
As is commonly known, one of the significant provisions of the Tax Cuts and Jobs Act of 2017, was to place a limit on the ability of taxpayers to deduct their state and local taxes (“SALT”). One of the responses by many states to the SALT limitation, including Connecticut, was to enact legislation that allowed residents
On July 1, 2025, Governor Ned Lamont signed into law Public Act No. 25-173, titled An Act Concerning Energy Affordability, Access and Accountability. This legislation introduces a new municipal tax targeting certain large-scale solar photovoltaic systems.
Effective Date:
The new tax provisions will take effect on July 1, 2026.
Scope of the Tax:
The One Big Beautiful Bill Act (OBBBA) introduces sweeping reforms to the Qualified Opportunity Zones (QOZs) program, aiming to refine its scope, enhance its impact, and improve transparency. These changes, many of which take effect after December 31, 2026, reshape how investors, communities, and regulators engage with QOZs.
Rolling Ten-Year QOZ Designations
Beginning July 1