February 15, 2019

Lamont proposes to jettison business-entity tax

Photo | Joe Cooper
Photo | Joe Cooper
The state Capitol in Hartford.

Gov. Ned Lamont on Thursday unveiled a valentine of sorts for small businesses in Connecticut: doing away with the state's business-entity tax, a pass-through tax levied on companies large and small, which pay $250 to the state every two years because, well, they exist.

In a package of proposed legislation to be sent to the legislature on Feb. 20, Lamont proposes eliminating the tax along with its corresponding application.

"Over and over again, I've heard the same refrain: It's not easy to do business with the state of Connecticut," said Lamont in a statement. "How can we try to build and stabilize our economy if businesses don't feel as though we're listening? These proposals will help the 17 Fortune 500 companies headquartered in Connecticut, just as they will help the start-up company and the mom-and-pop shop down the street."

Last month State Rep. Raghib Allie-Brennan (D-2) of Bethel introduced H.B. 5033 to eliminate the tax. Other proposed legislative measures would have made the levy payable every four years instead of two, for exempted companies with annual revenue of less than $1 million.

"My membership views it as a nuisance tax," said Eric Gjede, vice president for government affairs with the Connecticut Business & Industry Association (CBIA). "It's something they have to pay simply because they have to exist."

The tax may also have become expendable now in part because of its very insignificance. Over the past ten fiscal years, the levy has yielded an average of a little over $33 million per year, according to the state Department of Revenue Services' annual reports.

"This is the beginning of our work with the business community — not the end — but I hope these proposals send a powerful message to entrepreneurs, small business owners and CEOs alike: Connecticut state government wants to be your partner, not your roadblock."

"This will send a signal to every small-business owner across the state that Connecticut intends to become more business-friendly and wants them to grow, stay put and remain open," said Andrew Markowski, state director of the National Federation of Independent Businesses (NFIB) in Connecticut. "It's refreshing to hear Gov. Lamont say state government wants to be a partner of entrepreneurs and not just stand in their way."

This story originally aired on NewHavenBiz.com

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