Connecticut 2019 Regular Session

Connecticut Senate Bill SB01143 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
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2	2
3	3	LCO No. 7332 1 of 4
4	4
5	5	General Assembly Raised Bill No. 1143
6	6	January Session, 2019
7	7	LCO No. 7332
8	8
9	9
10	10	Referred to Committee on FINANCE, REVENUE AND
11	11	BONDING
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13	13
14	14	Introduced by:
15	15	(FIN)
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20	20	AN ACT ESTABLISHING A PAYROLL TAX.
21	21	Be it enacted by the Senate and House of Representatives in General
22	22	Assembly convened:
23	23
24	24	Section 1. (NEW) (Effective from passage) (a) As used in this section: 1
25	25	(1) "Employer" means an employer required to deduct and withhold 2
26	26	tax from wages pursuant to section 12-705 of the general statutes; 3
27	27	(2) "Payroll expense" means (A) wages, as defined in Section 3121 of 4
28	28	the Internal Revenue Code of 1986, or any subsequent corresponding 5
29	29	internal revenue code of the United States, as amended from time to 6
30	30	time, without regard to Section 3121(a)(1) of said code, and (B) 7
31	31	compensation, as defined in Section 3231 of said code, without regard 8
32	32	to Section 3231(e)(2)(A)(i) of said code, that are paid to all covered 9
33	33	employees; and 10
34	34	(3) "Covered employee" means an employee of an employer who is 11
35	35	required to have amounts withheld from wages pursuant to section 12-12
36	36	705 of the general statutes and receives an annual gross income from 13
37	37	Raised Bill No. 1143
38	38
39	39
40	40
41	41	LCO No. 7332 2 of 4
42	42
43	43	wages and compensation of more than forty thousand dollars. 14
44	44	(b) (1) On and after January 1, 2020, each employer shall pay a tax 15
45	45	on such employer's payroll expense at the following rates, provided 16
46	46	such employer shall be subject to the tax imposed under this section 17
47	47	only on the payroll expense in excess of forty thousand dollars paid to 18
48	48	any covered employee during a taxable year: (A) For the taxable year 19
49	49	commencing January 1, 2020, one and one-half per cent of such 20
50	50	employer's payroll expense during the quarter; (B) for the taxable year 21
51	51	commencing January 1, 2021, three per cent of such employer's payroll 22
52	52	expense during the quarter; and (C) for the taxable year commencing 23
53	53	January 1, 2022, and for each taxable year thereafter, five per cent of 24
54	54	such employer's payroll expense during the quarter. 25
55	55	(2) An employer may not deduct from the wages or compensation 26
56	56	of a covered employee any amount that represents all or any portion of 27
57	57	the tax imposed on such employer pursuant to this section. 28
58	58	(c) Each employer shall pay the tax imposed under this section to 29
59	59	the Commissioner of Revenue Services at the same time and in the 30
60	60	same manner such employer would be required to pay the tax under 31
61	61	section 12-705 of the general statutes, and shall file a return in such 32
62	62	form and manner as the commissioner prescribes. Any individual who 33
63	63	is under a duty to act on behalf of an employer to comply with the 34
64	64	provisions of this section shall be jointly and severally liable with the 35
65	65	employer for any tax, penalty or interest owed under this section. 36
66	66	(d) All provisions of chapter 229 of the general statutes shall apply 37
67	67	to the provisions of this section in the same manner and with the same 38
68	68	force and effect as if the language of said chapter had been 39
69	69	incorporated in full into this section and had expressly referred to the 40
70	70	tax imposed under this section, except to the extent that any such 41
71	71	provision is inconsistent with a provision of this section. 42
72	72	Sec. 2. (NEW) (Effective from passage) (a) For taxable years 43
73	73	commencing on or after January 1, 2020, there shall be allowed a credit 44
74	74	Raised Bill No. 1143
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76	76
77	77
78	78	LCO No. 7332 3 of 4
79	79
80	80	against the personal income tax imposed under chapter 229 of the 45
81	81	general statutes for covered employees of an employer, as those terms 46
82	82	are defined in subsection (a) of section 1 of this act. Such credit shall be 47
83	83	in the following amounts: 48
84	84	(1) For the taxable year commencing January 1, 2020, the credit shall 49
85	85	be in an amount equal to (A) the covered employee's wages and 50
86	86	compensation in excess of forty thousand dollars received by such 51
87	87	employee during the taxable year from the employer, multiplied by 52
88	88	the product of (B) (i) one and one-half per cent, and (ii) the result of 53
89	89	one minus a fraction, the numerator of which shall be the tax imposed 54
90	90	on such employee pursuant to chapter 229 of the general statutes prior 55
91	91	to the application of any credits for the taxable year and the 56
92	92	denominator of which shall be such employee's taxable income as 57
93	93	determined pursuant to said chapter for the taxable year; 58
94	94	(2) For the taxable year commencing January 1, 2021, the credit shall 59
95	95	be in an amount equal to (A) the covered employee's wages and 60
96	96	compensation in excess of forty thousand dollars received by such 61
97	97	employee during the taxable year from the employer, multiplied by 62
98	98	the product of (B) (i) three per cent, and (ii) the result of one minus a 63
99	99	fraction, the numerator of which shall be the tax imposed on such 64
100	100	employee pursuant to chapter 229 of the general statutes prior to the 65
101	101	application of any credits for the taxable year and the denominator of 66
102	102	which shall be such employee's taxable income as determined 67
103	103	pursuant to said chapter for the taxable year; and 68
104	104	(3) For the taxable year commencing January 1, 2022, and each 69
105	105	taxable year thereafter, the credit shall be in an amount equal to (A) the 70
106	106	covered employee's wages and compensation in excess of forty 71
107	107	thousand dollars received by such employee during the taxable year 72
108	108	from the employer, multiplied by the product of (B) (i) five per cent, 73
109	109	and (ii) the result of one minus a fraction, the numerator of which shall 74
110	110	be the tax imposed on such employee pursuant to chapter 229 of the 75
111	111	general statutes prior to the application of any credits for the taxable 76
112	112	Raised Bill No. 1143
113	113
114	114
115	115
116	116	LCO No. 7332 4 of 4
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118	118	year and the denominator of which shall be such employee's taxable 77
119	119	income as determined pursuant to said chapter for the taxable year. 78
120	120	(b) If the amount of the credit allowed pursuant to subsection (a) of 79
121	121	this section exceeds the covered employee's liability for the tax 80
122	122	imposed under chapter 229 of the general statutes, the excess may be 81
123	123	carried forward to the immediately succeeding taxable year or years. 82
124	124	This act shall take effect as follows and shall amend the following
125	125	sections:
126	126
127	127	Section 1 from passage New section
128	128	Sec. 2 from passage New section
129	129
130	130	Statement of Purpose:
131	131	To establish an employer compensation expense tax.
132	132
133	133	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
134	134	except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
135	135	not underlined.]
136	136