A simmering dispute between the Department of Revenue Services and the legislature’s Program Review and Investigations Committee suddenly boiled over this week. Committee staff have been drafting a report on the state’s tax structure. They asked DRS for individual and corporate returns, the better to understand just how much everyone pays. DRS has been refusing to turn over the forms. Now, Attorney General Richard Blumenthal released an opinion saying DRS must give the documents to the committee, with the understanding that the committee staff will not release them to the public. But the committee can use the data in compiling their report.Why does any of this this matter? Tax reform advocates have sought more information about specific returns for years, suspecting that they will show just how little corporations pay in taxes. And the Connecticut Business and Industry Association has lobbied against those efforts at every turn. So if the Program Review committee gets the returns, and that information leads to a report critical of the corporate community, the report becomes significant ammo for advocates trying to get big companies to pay a larger share of taxes.
“From the beginning, DRS had questions about the proprietary nature of the data and the need to protect confidential sources of data,” said state Rep. Brendan Sharkey (D-Hamden), co-chair of the committee.When DRS wouldn’t budge, Sharkey had his House leadership ask Blumenthal for a legal opinion. Though the Program Review Committee is led on a bipartisan basis, legislative Republican leaders did not join the Democrats in their solicitation to Blumenthal. “It is our opinion that the Committee may compel access to tax return information maintained by DRS,” Blumenthal wrote. “To ensure the confidentiality and security of the information to be provided, however, it is recommended that the Committee and DRS enter into a memorandum of understanding with regard to the Committee’s access, use, storage and return of such documents and information.“It is unclear whether DRS will comply. If it does not, then the committee would have to subpoena the information and perhaps litigate the matter.“That is a worse case scenario,” Sharkey said.