Connecticut House Bill HB05600

Connecticut 2019 Regular Session

• Introduced: 1/18/19
• Refer: 1/18/19
• Refer: 4/29/19
• Report Pass: 4/30/19
• Refer: 5/9/19
• Report Pass: 5/15/19

Caption

An Act Concerning A Study Of The Tax Implications Of Allowing Benefit Limited Liability Companies Under State Law.

Impact

The introduction of benefit LLCs could significantly alter the corporate landscape in Connecticut. By allowing companies to opt for this structure, Connecticut may enhance its appeal as a business hub compared to surrounding states. The potential for increased economic activity and tax revenue could play a crucial role in the state's financial stability. However, any changes would need careful consideration to understand the full tax implications and forecast any losses or gains in revenue that might result from the introduction of these new corporate entities.

Summary

House Bill 05600 concerns a comprehensive study mandated to investigate the tax implications of establishing benefit limited liability companies (LLCs) under Connecticut state law. The bill tasks the Commissioner of Revenue Services with evaluating various aspects concerning the implementation of benefit LLCs. The study will analyze practices and policies from other states, assess potential improvements to Connecticut's tax competitiveness, and explore whether the introduction of benefit LLCs could attract businesses from neighboring states. A report summarizing the findings and recommendations is to be submitted to the relevant legislative committees by February 2020.

Sentiment

Overall, the sentiment around HB 05600 is largely positive among proponents who believe that the bill could foster an entrepreneurial environment conducive to innovation and progressive business practices. Advocates view benefit LLCs as a mechanism that aligns profit with social and environmental responsibility, potentially enhancing the appeal of businesses that prioritize these values. However, there may also be some reservations among skeptics who worry about the implications of changing existing business structures and the complexities introduced by new legal definitions.

Contention

While the bill directs a study rather than implementing immediate changes, concerns around how benefit LLCs will affect existing regulations and business dynamics are inevitable. Opponents may argue that introducing new corporate forms could create confusion or hamper smaller businesses that may not compete effectively against larger entities opting for the new structure. The debate will likely involve discussions about ensuring a fair and level playing field for all businesses in the state and how to manage the implications of these new types of organizations.