Facing a budget deficit in 2002 the General Assembly instituted the Business Entity Tax, a $250 fee that must be paid every year, regardless of profit or earnings by the business. They are taxed simply for their existance. We were told then that it was a temporary measure to get out of a budget crisis. Six years later roughly 150,000 Connecticut businesses are currently paying the Business Entity Tax, proving that there is nothing more permanent than a “temporary” new tax from the state legislature.This tax is particularly undesirable, because of the impact it has on Connecticut’s economic growth and overal business climate. House Republicans have opposed the tax since its inception, and are pleased that this year, Democratic leadership have come out in favor of eliminating it as well.
The Business Entity Tax raises approximately $30 million a year, which goes toward the state’s $18 billion budget.
Representative Kevin M. DelGobbo (R-Naugatuck) testified before the General Assembly’s Commerce Committee yesterday on behalf of the House Republican caucus, calling for elimination of the tax.
“Some say, ‘It’s only 250 bucks; it’s not going to bankrupt anyone.’ But, it’s not just $250. It’s the rising cost of energy, gasoline, healthcare, property taxes, and other taxes. Then you tack on another $250 for small businesses struggling to make ends meet, and it hits them like a slap in the face,” said DelGobbo.
Expansion Management Magazine, which is a publication that serves the site selection and business development industry now ranks Connecticut DEAD LAST at #50 among the states. In other words, Connecticut is the worst place to move your business to.
We owe that to our tax climate.