State Taxes: Anti-jobs Proposals Defeated
Facing a severe state fiscal crisis, lawmakers and many special interest groups made the business tax climate a battleground this year. Fortunately, even though legislators spent a great deal of time on them, none of the harmful business-tax bills passed this year.
CBIA is grateful for the participation of its members in helping communicate to legislators how some of these proposals would actually have made the state’s economy worse. As the economic recovery begins, Connecticut needs to encourage business investment and job creation–not push them away as some of the tax proposals would have done.
The most dangerous proposal, SB-485, would have changed the state’s business tax structure to a unitary combined reporting system. But the bill, with its complicated system and projected $88 million tax increase, failed when it was not brought to a vote in the Senate.
And that’s good, because mandatory unitary combined reporting strikes at the heart of the very businesses we’re counting on for job growth in Connecticut. It would directly impact companies that have multiple locations—which just happen to be our economic-base industries, such as manufacturing, R&D, and headquarters companies that employ tens of thousands of our residents.
HB-5534, establishing a commission to review the state’s tax landscape, also failed when it was not taken up in the Senate. CBIA worked with the House of Representatives to change HB-5334 to make sure that confidential tax return and related information of businesses and individuals would have been safeguarded.
Another tax-review measure, SB-432, also died when it was not taken up in the House. On the other hand, the state budget revision for 2011 has no direct taxes, but an extra charge on electricity customers’ bills that was to expire will be reduced, but not eliminated.
And unfortunately, a proposal (SB-433) that would have clarified that the standard of proof in tax cases with no allegation of fraud is a “preponderance of the evidence,” also failed to gain final approval.
One successful tax-related measure this year (HB-5435) will promote job creation and retention in Connecticut. Among other things, the bill creates a job creation tax credit for small businesses and allows unincorporated businesses to take the credit off the personal income tax. It also creates a new angel investor tax credit and allows the credit to be taken against the personal income tax.
Another bill (HB-4884) creates a tax credit for “green” technology startup companies Gov. Rell has threatened to veto another bill (SB-1) that would eliminate the annual $250 business registration fee for small businesses but taxes large bonuses paid by companies that got federal bailouts to pay for a small-business tax break.
For more information about tax measures, contact Bonnie Stewart at 860.244.1925 or email@example.com.
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