James is purchasing a luxury waterfront home in Greenwich, Connecticut for $3,200,000. When calculating the Connecticut state conveyance tax on this transaction, which of the following correctly describes how the third tier of the tax applies?
Correct Answer
A) The third-tier rate of 2.25% applies only to the $700,000 portion of the price that exceeds $2,500,000.
Under CGS § 12-494, Connecticut's tiered conveyance tax structure applies each rate only to the portion of the sale price within that tier. The third-tier rate of 2.25% applies only to the amount exceeding $2,500,000. For a $3,200,000 sale, that is $3,200,000 − $2,500,000 = $700,000. The first $800,000 is taxed at 0.75%, the next $1,700,000 (from $800,000 to $2,500,000) at 1.25%, and only the final $700,000 at 2.25%.
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