State Senator Ryan Fazio Celebrates Passage of S.B. 1558: An Act to Protect Connecticut Workers from Unfair Out-of-State Taxation

HARTFORD, CT — State Senator Ryan Fazio (R-Greenwich) applauds the passage of S.B. 1558, which he authored and shepherded through the General Assembly. The bill is designed to challenge and end the ability of other states like New York to tax income earned by Connecticut residents on days they work entirely from home in the state of Connecticut.

“For years, Connecticut residents who work for companies from New York or other neighboring states have been unconstitutionally forced to pay high taxes to those other states on days that they work entirely from home in Connecticut,” Senator Fazio said. “Under New York’s current ‘convenience of the employer’ policy, New York taxes wages earned by Connecticut residents working for New York companies—even on days they never step foot in New York. This unfairly costs Connecticut residents tens of thousands of dollars in higher taxes because of New York’s higher tax rates, and it costs the state of Connecticut up to $400 million in lost revenues.”

“S.B. 1558 creates a legal strategy to end the practice in the courts. First, it creates a credit to pay back any Connecticut resident who is successful in court at obtaining a refund from another state 60% of their tax liability—encouraging justified litigation on behalf of Connecticut residents. Second, it directs the Attorney General of Connecticut to develop legal strategies for the Attorney General’s office to defend Connecticut residents and taxpayers at the court level as well.”

Senator Fazio continued, “I believe the Attorney General should be suing the state of New York for unconstitutionally taxing Connecticut residents when they earn income without setting foot in New York. There is no ability for the legislature to force that in statute, nor should there be, but this new law will hopefully move the AG’s office in that direction. There is no legal rationale for one state taxing residents of another state for labor entirely performed within the other state. Because this represents a conflict between states, it could also get expedited to the Supreme Court of the United States.”

Senator Fazio concluded, “While there was one other piece to this three-part strategy I would still like to pass in future years, I am glad that we have now advanced two important policies to protect Connecticut residents and taxpayers. I appreciate the collaboration from the administration, Sen. Fonfara, Rep. Horn, Rep. Polletta, Speaker Ritter, and my legislative colleagues who supported this law unanimously to get this done. Let’s keep fighting to get the job done and defend our residents in the courts in the coming years.”

The passage of S.B. 1558 marks a significant victory for Connecticut taxpayers, especially residents of the 36th District who commute to New York or work remotely. The bill passed unanimously in the Senate and House of Representatives. This bill will now be sent to the Governor’s office, Sen. Fazio is hopeful it will be signed into law.