Connecticut has instituted the first tax singling out the jewelry industry in more than 15 years.
The luxury tax, part of the budget signed by Gov. Dannel Malloy on May 4, adds a 0.65 percent levy to jewelry costing more than $5,000 and watches that cost more than $1,000. That is significantly reduced from the original proposal, which called for a 3 percent tax. Even so, when added to the state’s 6.35 percent sales tax, jewelry is now taxed at 7 percent.
The tax also applies to automobiles, boats, and clothing that exceed $50,000, $100,000, and $1,000, respectively.
“Historically speaking, these taxes have hurt industries,” says Robert Headley, chief operating officer of Jewelers of America.