Now that the Connecticut General Assembly has sent to Gov. Dannel Malloy the measure to implement the amended state budget, the state’s largest business organization will set its sights on the future; namely, getting rid of the “unitary” tax on corporations. The legislature delayed implementation of the tax for a year while rolling back a total of about $178 million in taxes overall. The governor recommended the changes after the business community—particularly big employers like GE, Aetna and Travelers—strongly objected to the new burdens.
Connecticut Business and Industry Association President Joe Brennan tells The Hanging Shad there is much to be thankful for in the moves the governor and legislative leaders made after passage of the original version of the budget. “We’re thankful the governor and the legislature responded,” Bennan said. “Going back and undoing the damage signals a change of course and a focus on economic competitiveness.”
Still, Brennan says there is work to be done. He noted that even in its revised state, the two-year budget still increased taxes by about $1.3 billion, including higher levies on employers, and reductions in the value of tax credits and operating loss provisions. “Make no mistake about it, taken as a whole, this budget does not help Connecticut’s overall competitiveness,” he said.
“Policymakers now must aggressively follow up on the special session with structural reforms that more efficiently deliver services, reduce long-term costs, and stabilize our economy to benefit everyone who lives in Connecticut,” Brennan said.
A major sticking point with CBIA is the “unitary” tax—requiring businesses and corporations to report for tax purposes all of its revenue where currently they only have to report business which is done in the state.
Brennan says the one year delay in switching to the unitary tax allows some much needed time to work on it. “We will continue to try to convince lawmakers that’s not the right course. If we can’t get rid of it, we can find language to deal with it as other states have done,” he said.