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Coupon Tax

A proposed tax to raise money will charge you before you use a coupon

By Alex Katz | 03/25/11 | Updated 03/25/11 | Posted in News

The Connecticut legislature will soon begin working on Governor Dannel Malloy's budget. In order to balance his budget, Governor Malloy has introduced some new taxes.

"It seems a little bit silly, because if you tax someone to use a coupon then they aren't saving money," says Andrea Wojik, a sophomore at the University.

As the Governor tries to balance his budget for the upcoming fiscal year, a tax on coupons may be added, which has raised questions.

Timothy Phelan, the President of the Connecticut Retail Merchants Association, said, "The part we're not sure about is how does he define a coupon. Is it a coupon that you clip out of the paper and bring in, is it a flyer."

The Governor is hoping to bring in 45 million dollars with this proposed tax, however Phelan says consumers will go elsewhere:

"Your generation of folks, college students are very computer savvy so purchasing something online and not paying sales tax at all, you don't even give it a second thought."

Wojik went on to say, "I'm a bad coupon user anyway, but I would probably shop online."

Phelan continued, that "if you're an online retailer you do not have to charge a sales tax under a supreme court ruling, and there's nothing the state can do about it."

The coupon tax, though, is not the only tax being considered by the Governor. Additional revenue is being raised with a proposed luxury tax, discontinuing exemptions on clothing purchases under $50, and an increase in the Sales Tax to 6.25%, However, Phelan is understanding:

"He inherited a very difficult problem, we understand that."

Phelan ended by offering this piece of advice to the Governor:

"No one business or organization or sector of the business class benefits by a stronger economy than retailers."

Phelan says he is behind the Governor as he tries to balance the budget, as it is very difficult; however, he hopes that taxpayers don't have to pay too much of a price to get a balanced budget.

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