Tax Experts Review State’s Tax Tools
Last Friday, top state tax experts talked about state tax policy in a special forum held by Connecticut’s Commission on Business Leadership and Corporation law.
They discussed what can be done to make Connecticut’s tax policy more competitive.
The legislature created the commission last year and gave it the task developing a 10-year plan to get more businesses to locate and set up business in Connecticut. Although the group focuses on corporate law, it’s also taking into account the state’s overall tax structure and the role it plays in attracting and retaining businesses.
Members of CBIA’s Tax Committee asked to present to the commission included Steve LaRosa from Alexion Pharmaceuticals, Harry Im from United Technologies Corporation, Sandra Coombes from Aetna and Jerry Maher from Boehringer Ingelheim.
Each covered a specific area of tax law and how they impact our economy.
Sales Tax on Business Services: Connecticut already taxes more services than most states and we would be more competitive if we didn’t tax them. Expansion to most professional services would be devastating to our economy.
Tax credits are an important tool to encourage particular activities or investments in a state by a large number of companies. They can only be earned by companies that are in Connecticut, and they help anchor businesses to our state. The R&D, fixed capital, and electronic data processing tax credits are excellent examples of these.
Net operating Loss (NOLs): Net Operating Loss carry-forwards are another important tool which helps anchor job creators to Connecticut. Every state with an income tax has NOLs and only two states (New Hampshire & Pennsylvania) have a permanent restriction on their use.
The panel was asked to present on tax policy for C corporations; next, the commission in June will review tax policy for pass-through entities such as LLCs, LLPs and S Corps.
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