Many business-related tax issues being explored by Finance Committee

(Feb. 22, 2008) The legislature’s Finance Committee has introduced several proposals that would make changes to the state’s property tax system, study alternatives to Connecticut’s corporate tax system, create new tax credits, eliminate the state’s Business Entity Tax and implement protections for taxpayers.

Although full bill descriptions are not yet available, here are several subjects of several of the Finance Committee’s bills:
 
Property tax
Among measures looking at the state’s property tax system are two that would:
• Exempt a certain portion of a home’s value from the property tax.
• Cap property taxes at 6% of a household’s adjusted gross income. Anything above the 6% would be paid by the state to the municipality.

Entity tax
• Phase out the $250 Business Entity Tax on certain small businesses.

Tax credits
Both the Finance Committee and Commerce Committee are looking at similar proposals that would:
• Create a tax credit for certain “angel” investments in new Connecticut companies.
• Establish a tax credit to help people investing in new markets or industries.

Corporate business tax
The Finance Committee is also considering whether to:
• Create a study to examine the impact of Connecticut switching to an alternate combined reporting base for the corporation business tax. The so-called “unitary” proposal requires groups of related corporations to determine their tax liability as if “they were one corporation.”
• Require a study to be conducted to determine whether Connecticut should move from our current corporate tax structure to a gross-receipts system.

Taxpayer protections
Still other measures would seek to address concerns of the business community by:
• Establishing mechanisms to protect taxpayer data.
• Reversing the erosion of taxpayers’ administrative and judicial rights and remedies.

Other measures
Numerous other business-related tax measures are being considered in other legislative committees, such as the Commerce and Insurance committees. When the complete proposals are available and hearing dates on the various measures set, CBIA will provide that information.

For more information, contact CBIA’s Bonnie Stewart at 860-244-1925 or bonnie.stewart@cbia.com.