Connecticut House Bill HB06628

Connecticut 2011 Regular Session

• Introduced: 3/22/11
• Refer: 3/22/11

Caption

An Act Concerning Tax Fairness.

Impact

The bill attempts to address tax equity by requiring corporations with members operating both inside and outside the state to more accurately calculate their tax liabilities through apportionment. This method aims to reduce tax avoidance strategies that may occur when corporations shift profits to jurisdictions with lower tax rates. The adjustments proposed in HB 06628 will have significant implications on the financial responsibilities of businesses, especially those participating in international operations or corporate group structures.

Summary

House Bill 06628, titled 'An Act Concerning Tax Fairness,' seeks to amend various sections of the general statutes concerning the taxation of businesses, particularly focusing on how corporations file combined unitary tax returns. This legislative change is aimed at ensuring that multinational corporations accurately report their earnings and tax liabilities within the state, thus promoting tax fairness across various sectors. Notably, the bill introduces provisions for handling capital gains and losses, detailing how these should be treated when determining a combined group's net income for tax purposes.

Contention

Critics of the bill argue that it could impose undue burdens on smaller businesses that may struggle with the complexities of combined reporting. Concerns have been raised regarding the administrative challenges associated with the proposed tax framework and whether it might hinder economic growth by discouraging business expansions in the state. Proponents contend that the bill is necessary to close loopholes that large corporations exploit, ensuring that all businesses contribute fairly to state revenue.