Connecticut House Bill HB05329

Connecticut 2019 Regular Session

• Introduced: 1/15/19
• Refer: 1/15/19

Caption

An Act Repealing Combined Reporting For Businesses' Corporate Tax Liability.

Impact

If enacted, the repeal of combined reporting would significantly alter how corporations are taxed in the state. The impact could lead to a decrease in revenue collected from corporate taxes, as businesses may report lower taxable incomes when they are allowed to file separately. Proponents of the bill argue that it would enhance the competitiveness of in-state businesses by easing compliance burdens and allowing them to retain more profits, thus fostering economic growth and job creation. However, critics warn that this could result in a substantial reduction in state tax revenues, which might affect funding for public services and necessary state programs.

Summary

House Bill 5329 proposes the repeal of combined reporting for businesses’ corporate tax liability in the state. This legislative action aims to modify the existing taxation structure that requires related corporations of a unitary business to report their income together in a single tax return. By eliminating this requirement, the bill intends to simplify tax compliance for businesses and potentially reduce their overall tax burden. This measure, introduced by Representative Harding, addresses concerns from the business community about the complexities and perceived inequities that arise from combined reporting practices.

Contention

Debate surrounding HB 5329 is expected to center on the implications of mixed reporting practices for revenue generation. Supporters assert that repealing combined reporting will create a more favorable business environment in the state, thereby attracting new companies and encouraging existing ones to expand. Conversely, opponents highlight concerns about potential revenue losses and the fairness of tax distribution among various sectors. They suggest that separate reporting might encourage tax avoidance strategies, disproportionately affecting small businesses and reducing the funding available for essential state services.