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--- version:File No. 681+++ version:(document, no version)@@ -1,310 +1,4 @@-House of Representatives-sHB5109 / File No. 681 1--General Assembly File No. 681-February Session, 2026 Substitute House Bill No. 5109--House of Representatives, April 20, 2026--The Committee on Finance, Revenue and Bonding reported-through REP. HORN of the 64th Dist., Chairperson of the-Committee on the part of the House, that the substitute bill-ought to pass.-- AN ACT REPLACING THE CANNABIS TOTAL THC TAX WITH AN-EXCISE TAX.-Be it enacted by the Senate and House of Representatives in General-Assembly convened:--Section 1. Section 12 -330ll of the 2026 supplement to the general 1-statutes is repealed and the following is substituted in lieu thereof 2-(Effective October 1, 2026, and applicable to sales occurring on or after October 3-1, 2026): 4-(a) As used in this section and sections 12-330mm and 12-330nn: 5-(1) "Cannabis" has the same meaning as provided in section 21a-420; 6-[(2) "Cannabis concentrate" has the same meaning as provided in 7-section 21a-420; 8-(3) "Cannabis edible product" means a product containing cannabis 9-or cannabis concentrate, combined with other ingredients, that is 10-intended for use or consumption through ingestion, including 11-sHB5109 File No. 681--sHB5109 / File No. 681 2--sublingual or oral absorption; 12-(4) "Cannabis plant material" has the same meaning as provided in 13-section 21a-279a;] 14-[(5)] (2) "Cannabis retailer" means "retailer", as defined in section 21a-15-420; 16-[(6)] (3) "Consumer" has the same meaning as provided in section 21a-17-420; 18-[(7)] (4) "Cultivator" has the same meaning as provided in section 21a-19-420; 20-[(8)] (5) "Delivery service" has the same meaning as provided in 21-section 21a-420; 22-[(9)] (6) "Dispensary facility" has the same meaning as provided in 23-section 21a-420; 24-[(10)] (7) "Food and beverage manufacturer" has the same meaning as 25-provided in section 21a-420; 26-[(11)] (8) "Hybrid retailer" has the same meaning as provided in 27-section 21a-420; 28-[(12)] (9) "Micro-cultivator" has the same meaning as provided in 29-section 21a-420; 30-[(13)] (10) "Municipality" has the same meaning as provided in 31-section 21a-420; 32-[(14)] (11) "Palliative use" has the same meaning as provided in 33-section 21a-408; 34-[(15)] (12) "Producer" has the same meaning as provided in section 35-21a-420; 36-[(16)] (13) "Product manufacturer" has the same meaning as provided 37-in section 21a-420; 38-sHB5109 File No. 681--sHB5109 / File No. 681 3--[(17)] (14) "Product packager" has the same meaning as provided in 39-section 21a-420; and 40-[(18) "Social Equity Council" has the same meaning as provided in 41-section 21a-420; 42-(19) "Total THC" has the same meaning as provided in section 21a -43-240; and] 44-[(20)] (15) "Transporter" has the same meaning as provided in section 45-21a-420. 46-(b) (1) For the privilege of making any sales of cannabis in this state, 47-a tax is hereby imposed on each cannabis retailer, hybrid retailer or 48-micro-cultivator at the [following rates: ] rate of ten and seventy -five-49-hundredths per cent of the gross receipts from the sale of cannabis. 50-[(A) Cannabis plant material, at the rate of six hundred twenty -five-51-thousandths of one cent per milligram of total THC, as reflected on the 52-product label; 53-(B) Cannabis edible products, at the rate of two and seventy -five-54-hundredths cents per milligram of total THC, as reflected on the product 55-label; and 56-(C) Cannabis, other than cannabis plant material or cannabis edible 57-products, at the rate of nine -tenths of one cent per milligram of total 58-THC, as reflected on the product label.] 59-(2) The tax under this section: 60-(A) Shall be collected from the consumer, except as provided under 61-subparagraphs (B) and (D) of this subdivision, by the cannabis retailer, 62-hybrid retailer or micro -cultivator at the time of sale and such tax 63-reimbursement, termed "tax" in this section, shall be paid by the 64-consumer to the cannabis retailer, hybrid retailer or micro -cultivator. 65-Each cannabis retailer, hybrid retailer or micro -cultivator shall collect 66-from the consumer the full amount of the tax imposed by this section or 67-sHB5109 File No. 681--sHB5109 / File No. 681 4--an amount equal to the average equivalent thereof to the nearest amount 68-practicable. Such tax shall be a debt from the consumer to the cannabis 69-retailer, hybrid retailer or micro -cultivator, when so added to the 70-original sales price, and shall be recoverable at law in the same manner 71-as other debts except as provided in section 12-432a; [.] 72-(B) Shall not apply to the sale of cannabis for palliative use; 73-(C) Shall not apply to the transfer of cannabis to a transporter for 74-transport to any other cultivator, micro -cultivator, food and beverage 75-manufacturer, product manufacturer, product packager, dispensary 76-facility, cannabis retailer, hybrid retailer or producer; 77-(D) Shall not apply to the sale of cannabis by a delivery service to a 78-consumer; 79-(E) Shall be in addition to the taxes imposed under section 12-330mm 80-and chapter 219; and 81-(F) When so collected, shall be deemed to be a special fund in trust 82-for the state until remitted to the state. 83-(c) On or before the last day of each month in which a cannabis 84-retailer, hybrid retailer or micro -cultivator may legally sell cannabis 85-other than cannabis for palliative use, each such cannabis retailer, 86-hybrid retailer or micro -cultivator shall file a return with the 87-Department of Revenue Services. Such return shall be in such form and 88-contain such information as the Commissioner of Revenue Services 89-prescribes as necessary for administration of the tax under this section 90-and shall be accompanied by a payment of the amount of the tax shown 91-to be due thereon. Each cannabis retailer, hybrid retailer and micro -92-cultivator shall file such return electronically with the department and 93-make such payment by electronic funds transfer in the manner provided 94-by chapter 228g, to the extent possible. 95-(d) If any cannabis retailer, hybrid retailer or micro-cultivator fails to 96-pay the amount of tax reported due on its return within the time 97-specified under this section, there shall be imposed a penalty equal to 98-sHB5109 File No. 681--sHB5109 / File No. 681 5--twenty-five per cent of such amount due and unpaid, or two hundred 99-fifty dollars, whichever is greater. Such amount shall bear interest at the 100-rate of one per cent per month or fraction thereof, from the due date of 101-such tax until the date of payment. Subject to the provisions of section 102-12-3a, the commissioner may waive all or part of the penalties provided 103-under this section when it is proven to the commissioner's satisfaction 104-that the failure to pay any tax was due to reasonable cause and was not 105-intentional or due to neglect. Any penalty that is waived shall be applied 106-as a credit against tax liabilities owed by the cannabis retailer, hybrid 107-retailer or micro-cultivator. 108-(e) Each person, other than a cannabis retailer, hybrid retailer or 109-micro-cultivator, who is required, on behalf of such cannabis retailer, 110-hybrid retailer or micro-cultivator, to collect, truthfully account for and 111-pay over a tax imposed on such cannabis retailer, hybrid retailer or 112-micro-cultivator under this section and who wilfully fails to collect, 113-truthfully account for and pay over such tax or who wilfully attempts in 114-any manner to evade or defeat the tax or the payment thereof, shall, in 115-addition to other penalties provided by law, be liable for a penalty equal 116-to the total amount of the tax evaded, or not collected, or not accounted 117-for and paid over, including any penalty or interest attributable to such 118-wilful failure to collect or truthfully account for and pay over such tax 119-or such wilful attempt to evade or defeat such tax, provided such 120-penalty shall only be imposed against such person in the event that such 121-tax, penalty or interest cannot otherwise be collected from such cannabis 122-retailer, hybrid retailer or micro-cultivator. The amount of such penalty 123-with respect to which a person may be personally liable under this 124-section shall be collected in accordance with the provisions of section 125-12-555a and any amount so collected shall be allowed as a credit against 126-the amount of such tax, penalty or interest due and owing from the 127-cannabis retailer, hybrid retailer or micro -cultivator. The dissolution of 128-the cannabis retailer, hybrid retailer or micro -cultivator shall not 129-discharge any person in relation to any personal liability under this 130-section for wilful failure to collect or truthfully account for and pay over 131-such tax or for a wilful attempt to evade or defeat such tax prior to 132-dissolution, except as otherwise provided in this section. For purposes 133-sHB5109 File No. 681--sHB5109 / File No. 681 6--of this section, "person" includes any individual, corporation, limited 134-liability company or partnership and any officer or employee of any 135-corporation, including a dissolved corporation, and a member of or 136-employee of any partnership or limited liability company who, as such 137-officer, employee or member, is under a duty to file a tax return under 138-this section on behalf of a cannabis retailer, hybrid retailer or micro -139-cultivator or to collect or truthfully account for and pay over a tax 140-imposed under this section on behalf of such cannabis retailer, hybrid 141-retailer or micro-cultivator. 142-(f) The provisions of sections 12-548, 12-551 to 12-554, inclusive, and 143-12-555a shall apply to the provisions of this section in the same manner 144-and with the same force and effect as if the language of said sections had 145-been incorporated in full into this section and had expressly referred to 146-the tax under this section, except to the extent that any provision is 147-inconsistent with a provision in this section. 148-(g) The commissioner shall not issue a refund of any tax paid by a 149-cannabis retailer, hybrid retailer or micro-cultivator under this section. 150-(h) The commissioner may adopt regulations, in accordance with the 151-provisions of chapter 54, to implement the provisions of this section and 152-sections 12 -330mm and 12 -330nn. Notwithstanding the provisions of 153-sections 4-168 to 4-172, inclusive, prior to adopting any such regulations, 154-the commissioner shall issue policies and procedures, which shall have 155-the force and effect of law, to implement the [taxes] tax imposed under 156-this section and sections 12 -330mm and 12-330nn. At least fifteen days 157-prior to the effective date of any policy or procedure issued pursuant to 158-this subsection, the commissioner shall post such policy or procedure 159-on the department's Internet web site and submit such policy or 160-procedure to the Secretary of the State for posting on the eRegulations 161-System. Any such policy or procedure shall no longer be effective upon 162-the adoption of such policy or procedure as a final regulation in 163-accordance with the provisions of chapter 54 or forty -eight months of 164-July 1, 2021, whichever is earlier. 165-(i) The tax received by the state under this section shall be deposited 166-sHB5109 File No. 681--sHB5109 / File No. 681 7--as follows: 167-(1) For the fiscal years ending June 30, 2022, and June 30, 2023, in the 168-cannabis regulatory and investment account established under section 169-21a-420f of the general statutes, revision of 1958, revised to January 1, 170-2025; 171-(2) For the fiscal years ending June 30, 2024, and June 30, 2025, sixty 172-per cent of such tax received in the Cannabis Social Equity and 173-Innovation Fund established under section 21a -420f of the general 174-statutes, revision of 1958, revised to January 1, 2025, twenty-five per cent 175-of such tax received in the Cannabis Prevention and Recovery Services 176-Fund established under section 21a-420f of the general statutes, revision 177-of 1958, revised to January 1, 2025, and fifteen per cent in the General 178-Fund; 179-(3) For the fiscal year ending June 30, 2026, sixty per cent of such tax 180-received in the social equity and innovation account established under 181-section 21a -420f, twenty -five per cent of such tax received in the 182-Cannabis Prevention and Recovery Services Fund established under 183-section 21a-420f and fifteen per cent in the General Fund; 184-(4) For the fiscal years ending June 30, 2027, and June 30, 2028, [sixty-185-five] seventy per cent of such tax received in the social equity and 186-innovation account established under section 21a -420f, twenty-five per 187-cent of such tax received in the Cannabis Prevention and Recovery 188-Services Fund established under section 21a-420f and [ten] five per cent 189-in the General Fund; and 190-(5) For the fiscal year ending June 30, 2029, and each fiscal year 191-thereafter, seventy-five per cent of such tax received in the social equity 192-and innovation account established under section 21a-420f and twenty-193-five per cent of such tax received in the Cannabis Prevention and 194-Recovery Services Fund established under section 21a-420f. 195-This act shall take effect as follows and shall amend the following-sections:--sHB5109 File No. 681--sHB5109 / File No. 681 8--Section 1 October 1, 2026, and-applicable to sales-occurring on or after-October 1, 2026-12-330ll--FIN Joint Favorable Subst.--sHB5109 File No. 681--sHB5109 / File No. 681 9--The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of-the General Assembly, solely for purposes of information, summarization and explanation and do not-represent the intent of the General Assembly or either chamber thereof for any purpose. In general,-fiscal impacts are based upon a variety of informational sources, including the analyst’s professional-knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final-products do not necessarily reflect an assessment from any specific department.--OFA Fiscal Note--State Impact:-Agency Affected Fund-Effect FY 27 $ FY 28 $-Department of Revenue Services Various --Revenue Loss-1.9 million 2 million-Note: Various=Various-Municipal Impact: None-Explanation-Explanation-The bill results in a total net revenue loss to the state of $1.9 million-in FY 27 and $2 million in FY 27 by modifying the cannabis excise tax-rate from a potency tax to a flat 10.75% on retail sales.-The bill also increases the transfer percentage of the cannabis excise-tax collections to the social equity and innovation account and-correspondingly decreases the General Fund (GF) percentage by 5% for-FY 27 and FY 28. The table below shows the net impact by fund/account-from the changes in the bill.-Revenue Impact of HB 5109 by Fund/Account – in millions-Fund/Account FY 27 FY 28 FY 29 FY 30+-Social Equity and Innovation Account - - (1.6) (1.7)-Prevention and Recovery Services Fund (0.5) (0.5) (0.5) (0.5)-General Fund (1.4) (1.5) - --Total (1.9) (2.0) (2.1) (2.2)--Under current law and unchanged by the bill, (1) the GF transfer-sHB5109 File No. 681--sHB5109 / File No. 681 10--sunsets in FY 29 and (2) Prevention and Recovery Services Fund receives-25% of cannabis excise tax collections per year.-The Out Years-The General Fund revenue impact noted above occurs in FY 27 and-FY 28 only. The social equity and innovation account will incur a-revenue loss beginning in FY 29 due to the tax change as noted above.-The social equity and innovation account and the Prevent ion and-Recovery Services Fund will incur a continuation of the revenue impact-noted above through the outyears subject to inflation.--sHB5109 File No. 681--sHB5109 / File No. 681 11+Researcher: GM Page 1 4/20/26OLR Bill AnalysissHB 5109@@ -325,7 +19,7 @@transport to any other cultivator, micro -cultivator, food and beveragemanufacturer, product manufacturer, product packager, dispensaryfacility, cannabis retailer, hybrid retailer, or producer.-Under existing law and the bill, retailers and micro -cultivators must+Under existing law and the bill, retailers and micro-cultivators mustcollect the tax from consumers at the time of sale (except for the exemptsales described above). The tax applies in addition to the 3% municipalcannabis tax and the 6.35% state general sales tax.@@ -336,11 +30,11 @@The bill also makes technical and conforming changes, includingdeleting an obsolete definition.EFFECTIVE DATE: October 1, 2026, and applicable to sales occurring-sHB5109 File No. 681+on or after that date.+2026HB-05109-R000681-BA.DOCX-sHB5109 / File No. 681 12+Researcher: GM Page 2 4/20/26-on or after that date.BACKGROUNDCannabis TermsBy law, “cannabis” has the same meaning as “marijuana,” which is@@ -369,18 +63,18 @@seeds or (2) hemp as defined under state law.“Total THC” is the sum of the percentage by weight oftetrahydrocannabinolic acid, multiplied by 0.877, plus the percentage of-sHB5109 File No. 681+weight of THC.+2026HB-05109-R000681-BA.DOCX-sHB5109 / File No. 681 13+Researcher: GM Page 3 4/20/26-weight of THC.Social Equity and Innovation AccountThe social equity and innovation account’s money must be allocatedby the Office of Policy and Management secretary for purposes that theSocial Equity Council determines further the principles of equity andmay include providing (1) access to capital for businesses in anyindustry, (2) technical assistance for the start -up and operation of a-business in any industry, (3) funding for workforce education in any+business in any i ndustry, (3) funding for workforce education in anyindustry, (4) funding community investments, and (5) fundinginvestments in disproportionately impacted areas.Related Bills
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