Connecticut Governor Agrees to Pull Back Business Tax Increase
June 12, 2015
Earlier today, Connecticut governor Dannel Malloy (D) announced proposed revisions to the $2 billion in tax increases in the recently-passed biennial budget. The proposal would cancel a planned increase of a tax on data processing, delay a planned switch to combined income reporting until 2016, and eliminate sales tax revenues from parking and car washes. It also raises the Tax Credit Cap to 55 percent and sets a 1 percent tax on the World Wide Web. Per his official announcement, he will ask the legislature to grant him the authority to make cuts of up to 1.5 percent of across-the-board spending to make up for approximately $223 million in lost revenue.
Governor Malloy’s proposal is good news for the state’s businesses. Concerns from business groups and Connecticut-based corporations like GE and Aetna about the budget’s tax increases have been mounting since before the budget’s passing. Doing business in Connecticut is difficult; it ranks 42nd on our State Business Tax Climate Index and has one of the highest corporate tax rates in the country. Taxes on data processing and the shift to combined reporting make that tax burden even heavier.