The Connecticut State Legislature introduced Senate Bill 1118 on March 14, 2025, aiming to reform the payment processes for state services and taxes. The bill primarily seeks to streamline the acceptance of credit and debit card payments by state agencies while ensuring transparency in service fees associated with these transactions.

Key provisions of Senate Bill 1118 include the establishment of guidelines for service fees imposed by state agencies when payments are made via credit or debit cards. The bill stipulates that any service fee must be designed to cover the cost of service and cannot exceed the charges imposed by the card issuer. Additionally, it mandates that state agencies disclose any service fees to payors before the fees are applied, enhancing transparency in financial transactions.

One significant change proposed in the bill is the repeal of a previous statute that allowed the Commissioner of Revenue Services to charge taxpayers a service fee for credit card payments. Under the new provisions, taxpayers will no longer incur service fees when paying taxes, penalties, or fees with credit or debit cards, which could alleviate financial burdens for many residents.

The bill has sparked discussions among lawmakers and stakeholders regarding its potential economic implications. Supporters argue that eliminating service fees for tax payments could encourage timely payments and improve compliance, while critics express concerns about the financial impact on state revenue from processing fees.

As the bill progresses through the legislative process, its implications for state finances and taxpayer experiences will be closely monitored. If passed, Senate Bill 1118 is set to take effect on July 1, 2025, marking a significant shift in how Connecticut residents interact with state financial systems.