State officials and small business leaders stood side-by-side Thursday at the State Capitol and promised to abolish the business entity tax during the 2008 legislative session.
The $250 tax imposed annually on every business in the state was created in 2002 to close a $96 million deficit in the state budget that year, Secretary of the State Susan Bysiewicz said Thursday. She said for the past four years the state of Connecticut has had surpluses, so “before we get way too used to this tax, we need to get rid of it.”
The tax brings in about $30 million in revenues to the state, but Bysiewicz said by eliminating it, the state is giving it back to businesses who can in turn use it to expand their company and create more jobs. She said “it’s a shot in the arm for Connecticut’s economy.”
Connecticut Business and Industry Association spokeswoman Bonnie Stewart said the business entity tax is a tax for simply existing and has been a sore point with the business community for quite some time.
There is bipartisan support for eliminating the tax, but cutting revenues in a budget adjustment year, in which the state is already running shortfalls, may not sit well with Gov. M. Jodi Rell.
Just last week Rell told a small group of reporters that there are budget shortfalls in the Department of Corrections, UConn Medical Center, Department of Social Services, and the Department of Education’s special education division. According to the Connecticut Post the shortfalls may exceed more than $60 million or more before the end of this fiscal year.
In addition, Rell has told state agencies to tighten their budgets because their appropriation may be cut this year. But until Feb. 6, the first day of the legislative session, no one will know for sure whether eliminating a tax that brings in $30 million in revenue, is even possible.
Editor’s note: CTNewsjunkie.com is a limited liability company owned by Dig and Scoop LLC. We felt it was necessary to disclose that we pay the $250 business entity tax.