The legislature this year voted to assemble a panel of experts to study Connecticut’s local and state tax structures.
Under HB 5597, the chairpersons of the Finance Committee will convene a panel of up to 15 experts in tax law, tax accounting, tax policy, economics, and business finance. Specifically excluded by legislation are legislators.
This initiative will be similar to one New York State used to improve its economic competitiveness by making its state and local tax systems simpler and more attractive to job creators in the state.
Connecticut’s tax panel will have to “consider and evaluate options to modernize tax policy, structure, and administration” in a variety of issues—specifically including efficiency, administrative costs, equity, reliability, stability volatility, sufficiency, simplicity, incidence, economic development and competitiveness, employment, affordability, and overall public policy.
It’s extremely important for the panel, when developing recommendations, to keep in mind the impact and the extent to which tax policy affects business and consumer decision making. Subcommittees will focus on four categories of taxes:
- Personal income taxes, including estate and gift taxes
- Business taxes, including excise taxes
- Consumer taxes
- Property taxes
All of these are extremely important to the business community because many employers pay their business taxes through the personal income tax; and estate and gift tax laws impact family owned businesses, succession planning and the availability of investment dollars.
On the consumer tax front, businesses pay at least forty percent of consumer taxes. And property taxes remain a substantial issue for Connecticut businesses as they not only pay taxes on the property that residents are also taxed for (real property, cars, trucks, etc…), but also on every desk, chair, copy machine, and other personal property they own.
The panel may recommend extending their reporting deadline up until Jan. 1, 2016, but they likely will move quickly to meet the initial deadline of submitting deadlines to the governor and Finance Committee by Jan. 1, 2015--primarily because during the 2015 legislative session the General Assembly must adopt the state’s next two-year budget.