May 2003 CBIA News Your Questions Answered

YOUR QUESTIONS ANSWERED

Have a personnel-related or business tax question? Members can get free information from CBIA’s experts. The phone number is 860–244–1900.

Q: We are a small manufacturer and will be hiring summer help to work in our business office. One of our employees has a 15-year-old who is looking for a summer job. We know that 15-year-olds may not work in the shop, but may we hire him for the office work?

A: No. A 15-year-old may not work for a manufacturing concern, even in the office part of the facility. The minimum age for office work at a company like yours is 16. Besides doing office work, 16- or 17-year-olds can do light assembly and use some hand tools, although they can’t operate most types of machinery. (For specifics, check with the Connecticut Department of Labor, 860-263-6791.) You might want to tell your employee with the 15-year-old to visit the “Human Resources” area at cbia.com for a link to the list of permitted occupations and working hours for that age group.

Q: When we’re asked for information about a former or current employee, we know that as a general rule we may only give out the dates of employment, title or position, and wage or salary, unless we have the employee’s written authorization. Are there any exceptions?

A: Yes. Under Connecticut law (C.G.S. 31-128f) an employer may disclose information contained in an employee’s personnel or medical file if the disclosure is made: (1) to a third party that maintains or prepares employment records or performs other employment-related services for the employer; (2) in response to a lawfully issued summons or judicial order, or in response to a government audit or the investigation or defense of personnel-related complaints against the employer; (3) in response to a request by a law-enforcement agency for an employee’s home address and dates of his or her attendance at work; (4) in response to an apparent medical emergency or to apprise the employee’s physician of a medical condition of which the employee may not be aware; (5) to comply with federal, state or local laws or regulations; or (6) when the information is disseminated according to the terms of a collective bargaining agreement.

Q: My company was notified that we need to pay the state’s new Business Entity Tax of $250 for each limited liability company (LLC) we operate. As a normal practice in our industry, we often form separate LLCs for the work we do for clients, to limit liability. When we complete our clients’ work, we notify the Department of Revenue Services (DRS) that those LLCs are defunct by filing final tax returns for them. There are no assets in these businesses now, and they have been dormant for many months. Does the Business Entity Tax apply to these dormant LLCs, or only to active ones?

A: The tax applies to both types. There’s a two-pronged test for determining liability: First, is the business one of the entities subject to the tax? An LLC is one such entity. Second, is it required to file an annual report with the secretary of the state’s office? Even though you filed final tax returns with the DRS and have conducted no business under the dormant LLCs for months, unless you formally dissolved those businesses with the secretary of the state’s office, they have a tax obligation. Even so-called dormant LLCs are required to file an annual report with the secretary of the state’s office and are therefore subject to the new tax. Please note that the tax is effective July 1, 2002, and applies to taxable years beginning on or after Jan. 1, 2002. For more information, see DRS Special Notice 2002 (11).

Q: I read that in February the state enacted sales tax changes affecting media and direct-mail advertising. How will those changes affect such services purchased the rest of the year?

A: It depends on when the services were provided and paid for:

Any services provided and paid for before April 1, 2003, are not subject to the tax.

If the services are provided and paid for on or after April 1, 2003, sales tax of 3% applies.

If you paid in March for services provided both before and after April 1, the 3% sales tax applies only to the services provided after April 1.