Connecticut House Bill HB06320

Connecticut 2023 Regular Session

• Introduced: 1/20/23
• Refer: 1/20/23

Caption

An Act Concerning Recommendations By The Commissioner Of Economic And Community Development Regarding Certain Tax Credits.

Impact

If enacted, this bill would revise existing tax statutes to include pass-through entities in the eligibility for research and development tax credits, which could significantly affect businesses that previously might not have benefited from such incentives. This change holds the potential to attract new businesses to the state and retain existing ones by providing financial relief that encourages ongoing development efforts. Additionally, it suggests an alignment of the state's tax policy with contemporary business structures that increasingly favor pass-through taxation.

Summary

House Bill 06320 proposes amendments to state law concerning the recommendations made by the Commissioner of Economic and Community Development focusing specifically on extending research and development tax credits to pass-through entities. This initiative aims to enhance economic growth by incentivizing innovation and development within small to medium-sized businesses that typically operate as pass-through entities, where income is passed through to individual owners without being taxed at the corporate level. The bill reflects a commitment to bolster the state's economy by encouraging investment in research and development activities crucial to maintaining competitiveness.

Contention

Despite the potential benefits, there might be points of contention surrounding this bill, such as concerns over the effectiveness of tax credits and whether they actually lead to increased investment and job creation. Critics may question if the extension of these credits specifically to pass-through entities represents a fair use of state tax revenue, while proponents argue that it levels the playing field for smaller businesses against larger corporations that might already engage with these tax incentives. Legislative discussions will likely focus on the adequacy of the proposed amendments in achieving desired economic outcomes while addressing fairness and taxpayer accountability.