In an effort to close a projected $3.5 billion budget deficit driven by Connecticut’s ever-rising pension and debt costs, Gov. Ned Lamont has proposed expanding the state sales tax to include, among other things, non-prescription medication.
So, if paying Connecticut taxes is giving you a headache, you’re going to have to pay a tax for that Tylenol.
The governor estimates the sales tax for non-prescription drugs will raise $30 million per year in revenue.
Lamont’s proposal reverses Gov. Dannel Malloy’s successful push to eliminate the sales tax for non-prescription medication in 2015. Kevin Sullivan, former director of the Department of Revenue Services, said the tax on medications was an “inherently regressive” tax in an interview with WNPR.
“Many people rely on over-the-counter medications for basic health care. For them, there’s no difference between a tax-exempt prescription drug and a taxable over-the-counter drug,” Sullivan said.
The sales tax expansion, along with keeping several taxes set to expire under current law, is expected to bring in over $700 million to the state’s General Fund, which is projected to face an even larger deficit in the next biennium.