Expanding Manufacturing Tax Credit Helps Address Skills Gap
The legislature’s Commerce Committee held a public hearing Feb. 23 on HB 7064, which extends the manufacturing apprenticeship tax credit to pass-through entities—LLCs, partnerships, S corporations—allowing their owners and partners to claim the credit against their personal income taxes.
CBIA Assistant Counsel Louise DiCocco testified in support of it. A similar bill passed the state House and Senate unanimously last year, but Governor Malloy vetoed it.
Under current law, the manufacturing apprenticeship tax credit applies only against the corporation business tax—businesses organized as C corporations.
Although current law allows pass-through entities to earn the manufacturing apprenticeship tax credit, it prevents their owners and partners from applying the credits to their personal income taxes.
A credit like this is as important to the pass-through entities as it is to C corporations to have programs like research, development and apprenticeship in our state.
CBIA and the General Assembly consistently hear about the shortage of workers in manufacturing. In addition, Connecticut has an aging workforce.
Priming the Talent Pipeline
Now is the time to train people so they have the skill level needed to meet the needs of Connecticut manufacturers. CBIA urges lawmakers to extend this tax credit to pass-through entities.
DiCocco said this legislation will help small and midsize Connecticut businesses who have invested in manufacturing apprentices build the strength of their workforce.
Apprenticeship programs are vital to manufacturers, but they can be costly.
HB 7064 helps smaller manufacturers offset the cost of the apprenticeships and gain access to a new generation of talent.
Expanding the manufacturing apprenticeship tax credit is a modest step with major potential impact.
“Extending the apprenticeship tax credit will help them offer that critically important training.”
For years, the credit has worked well for C corporations, DiCocco explained, but since few companies are now being established as C corporations, extension will help the growing number of pass-through entities.
HB 7064 is an also excellent opportunity for Connecticut residents. Many people are unemployed, and manufacturing provides high-quality jobs with good wages.
Adoption of HB 7064 is a modest step with major potential impact.
It’s a win-win situation for Connecticut. CBIA will continue to lobby for the bill and urge legislators to support and pass this measure.
For more information, contact CBIA’s Louise DiCocco (203.589.6515) | @LouiseDiCocco
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