Connecticut Senate Bill SB01096

Connecticut 2021 Regular Session

• Introduced: 4/14/21
• Refer: 4/14/21

Caption

An Act Authorizing The Exchange Of Excess Credits With The State At A Reduced Rate.

Impact

The implications of SB01096 are significant for state revenue and corporate taxation policies. It establishes a cap on the total amount of refunds allowed in any fiscal year, set at five hundred million dollars. This capping mechanism is designed to manage the financial impact on the state budget while still providing a mechanism for businesses to convert unutilized credits into cash flow. However, the bill also stipulates that any corporation with outstanding tax liabilities may be disallowed from claiming such credits, which ensures that tax compliance remains a priority while still providing financial relief.

Summary

SB01096 is a legislative proposal that seeks to authorize corporations and certain affected business entities to exchange their excess tax credits with the state in return for a refund at a reduced rate of ninety percent of the credit's value. This bill intends to provide relief to entities that are unable to fully utilize their credits against their state tax liabilities. By facilitating this exchange, the state aims to enhance business liquidity, enabling companies to better manage their financial affairs and potentially reinvest those resources into their operations or workforce.

Contention

Debate around SB01096 may arise particularly concerning its impact on tax revenue and whether the proposed exchanges of credits will incentivize businesses to invest in growth or merely serve as a financial stopgap. Proponents of the bill argue that it could stimulate economic activity by allowing companies immediate access to cash, which is especially crucial in times of downturns or liquidity shortages. Conversely, critics could argue that such measures disproportionately benefit larger corporations while doing little to assist smaller businesses or startups that may not have the same access to tax credits in the first place.