The joint-Democratic budget hasn’t really cut back in taxes on corporations, according to the latest draft making the rounds. At this point, the Senate may start the debate on the two-year, $40-billion package if the House doesn’t get its act together by 4. While pulling back slightly from the business community, lawmakers are heading toward raising the $3.40-per-pack cigarette tax by 25 cents in the first year, 15 cents the year after and 15 more cents per year into the future, presumably until there are no smokers left in Connecticut. Here are some of the highlights, or lowlights, of the current budget draft, in eyes of the business community:
Continuation of the 20% surcharge on the Corporate Income Tax from 7.5 to 9 percent (next four years 20-20-10-0)
New unitary (combined reporting) tax
Reduction of Net Operating Loss Carry Forward credit from 70% to 50%
Reduction of all other corporate tax credits from 70% to 50%
Increase in high earner income taxes, including businesses who pay personal taxes but not corporate taxes to 6.99%
Increase sales tax on computer services and data processing from 2% in first year and 3% in the second and each following year.
Expand sales tax to other services, including the Internet and car washes, but not veterinarians or accountants.