Employer groups are calling for lawmakers to expand the state's manufacturing apprenticeship tax credit program to smaller manufacturers.

The legislature's Commerce Committee is currently considering HB 5212, which extends the tax credit to pass-through entities—LLCs, partnerships, and S corporations.

Under current law, the tax credit is only available to businesses organized as C corporations, typically larger companies.

While the law allows pass-through entities to earn the credit, it prevents their owners and partners from applying the credits to their personal income taxes.

"More and more small and mid-sized manufacturers are facing no choice but to invest in training current and new employees themselves," CBIA's Eric Brown told the committee Feb. 27.

"Extension of the apprenticeship tax credit to pass-through entities will help these manufacturers mitigate the cost of some of that training, put them on an even par with larger manufacturers who are already eligible for the credit, and help reduce Connecticut’s skilled manufacturing worker shortage."

Critical Issue

David Krechevsky, director of public policy and economic development for the Waterbury Regional Chamber, told the committee the issue was critical for smaller manufacturers.

"Providing smaller manufacturers with the opportunity to use the apprenticeship tax credit will encourage them to hire and train the workers they need, while easing the effect on their bottom lines," he said.

"Providing smaller manufacturers the opportunity to use the tax credit encourages them to hire and train workers."

Waterbury Regional Chamber's David Krechevsky

The National Federation of Independent Businesses also submitted testimony, noting that "good tax policy, not to mention efficacy, dictates that tax credits for apprenticeship training should be available to all corporate entities, not just limited to a select few."

The state House and Senate unanimously approved similar legislation in 2017.

However, then-Governor Dannel Malloy vetoed the bill.

For more information, contact CBIA's Eric Brown (860.244.1900) | @CBIAericb