Connecticut House Bill HB06068

Connecticut 2015 Regular Session

• Introduced: 1/22/15
• Refer: 1/22/15

Caption

An Act Concerning Corporation Business Tax Reforms.

Impact

The anticipated impact of HB 06068 on state laws includes a reduction in the overall corporation business tax rate for C corporations. This decrease aims to make the state's business environment more attractive and competitive. By adjusting the tax structure, the bill is expected to potentially increase investment in the state, stimulate economic growth, and create jobs while also trying to balance revenue needs for state funding. This shift may lead some corporations to reassess their business operations in the state, potentially increasing compliance and economic activity.

Summary

House Bill 06068 proposes significant reforms to the corporation business tax structure in the state. The bill aims to enhance fairness and accuracy in taxation by implementing combined reporting requirements for unitary businesses. This approach requires businesses that function as part of a controlled group to report their income and profits collectively, rather than separately, which seeks to prevent tax avoidance strategies that exploit differences in state tax laws. Furthermore, the legislation adopts a single sales factor apportionment method, simplifying how taxes are calculated based on where sales occur, rather than where assets or payrolls are located.

Contention

Despite the positive aspects presented by supporters of the bill, such as enhanced competitiveness for the state's corporations, there may be notable points of contention. Critics have raised concerns about potential fiscal impacts, arguing that decreasing tax rates could strain state revenues that fund essential services. Additionally, there are fears about the implications of combined reporting requirements, with opponents arguing that it could impose higher administrative burdens on smaller businesses that may not have the same resources as larger corporations. These discussions underscore the necessity for a nuanced approach to reforming business taxes that considers both the need for revenue and support for economic development.