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Connecticut Gov. proposes reduction in tax rate on insurance premiums

Connecticut Gov. Dannel Malloy has proposed a reduction in the tax rate on insurance premiums to 1.5% from 1.75%, effective Jan. 1, 2018.

Malloy said the reduction in tax rate will be included in the state budget proposal that is expected to be presented on Feb. 8 during an address to a joint convention of the state's General Assembly.

The revised tax rate will significantly reduce the liability of Connecticut-based insurers doing business in other states with lower tax rates, Malloy noted. The costs of lowering the tax rate will be covered by limiting the use of tax credits that companies can apply against premiums tax liability, the governor said.