Connecticut House Bill HB05676

Connecticut 2023 Regular Session

• Introduced: 1/18/23
• Refer: 1/18/23

Caption

An Act Concerning The Business Operating Loss Carryover Period.

Impact

The implementation of HB 05676 is expected to positively affect businesses by allowing them to retain more capital during difficult times. By increasing the carryover period for operating losses, companies will have a greater opportunity to recover from financial hardships before they face taxation on profits. This change may encourage businesses to take risks and invest more in their infrastructure or workforce, thereby aiding in broader economic recovery efforts. The extension could be particularly relevant for small and medium-sized enterprises that often struggle with cash flow issues.

Summary

House Bill 05676 proposes an amendment to section 12-217 of the general statutes to extend the period over which business operating losses can be carried over for tax deductions. Currently, businesses can deduct losses over a span of twenty years; this bill aims to increase that period to thirty years. The extension is intended to provide financial relief and incentivize businesses to invest in their operations, which could lead to job creation and economic growth, particularly for those that have faced extended periods of losses due to economic downturns or unforeseen challenges.

Contention

While proponents of the bill, such as various business associations and economic development advocates, argue that extending the carryover period is a necessary step to foster a more resilient business environment, there are opposing views. Critics may express concern over the long-term implications of such tax policies, suggesting that they could reduce state revenue and limit funds available for public services. Additionally, some may argue that these benefits predominantly favor larger corporations, rather than small businesses, thus calling for a more nuanced approach to tax policy that equally benefits different-sized enterprises.