How does Connecticut’s tax code compare? Connecticut has a graduated state individual income tax, with rates ranging from 2.00 percent to 6.99 percent. Connecticut has a 7.5 percent corporate income tax rate. Connecticut also has a 6.35 percent state sales tax rate and does not have local sales taxes. Connecticut has a 1.78 percent effective property tax rate on owner-occupied housing value.
Connecticut has an estate tax. Connecticut has a 25 cents per gallon gas tax rate and a $4.35 cigarette excise tax rate. The State of Connecticut collects $9,469 in state and local tax collections per capita. Connecticut has $14,903 in state and local debt per capita and has a 58 percent funded ratio of public pension plans. Connecticut’s tax system ranks 47th overall on the 2025 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Connecticut is no exception. The first step towards understanding Connecticut’s tax code is knowing the basics. How does Connecticut collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
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In times of high inflation, states should consider adopting permanent full expensing because it boosts long-run productivity, economic output, and wages.
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IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
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