Malloy Proposes Business Tax Rollbacks After Companies Explored Leaving

By RICH SCINTO (Patch Staff)

Gov. Dannel Malloy has proposed several changes to the recently approved budget that would reducing spending and eliminate business taxes totaling more than $220 million.

Malloy said the plan would assure Connecticut remains on a long-term path to sustainability.

His proposals include:

• Keeping the computer and data processing tax to one percent.
• Combined reporting be deferred until Jan. 1, 2016.
• Eliminate sales tax on car washes and parking.
• Raise tax credit cap to 55 percent.
• Taxes On World Wide Web set at one percent.

The tax reductions would reduce revenue for the state by about $223.7 million. Malloy is asking the legislature to grant him authority to make reductions of up to 1.5 percent across the board, which could include reductions in aid to local communities, the CT Mirror reports.

The passed budget received criticism from large Connecticut companies including General Electric, Aetna and Travelers. GE officials said they would be looking to move out of the state.

Indiana jumped on the bandwagon and took out a full-page Wall Street Journal ad criticizing Connecticut’s budget.

Gov. Mike Pence also sent a letter to GE, Aetna and Travelers officials highlighting the business climate in his state. He said the Indiana workforce would be happy to have them there.

Related:

• Indiana Strikes Back: State Takes Swipe at CT
• Malloy Says GE Hasn’t Paid Any ‘Substantial Amount’ of Corporate Taxes in CT

Malloy said his proposals will help protect the state’s long-term interests.“I have always been clear that I believe that we need to be smart about spending, about revenue, and about our future,” Malloy said in a statement. “We’ve made significant economic progress over the past several years, and with historic new investments in transportation, we’re poised to grow even more.”

Malloy continued, “Even as we have one of the lowest effective corporate tax rates in the nation, these steps are being made to protect Connecticut’s long-term interests, because I believe in doing everything possible to expand our economy.”

Malloy met with members of the Connecticut Business Industry Association Friday before the announcement, according to CT News Junkie.

The $40.3 billion biennial budget as approved earlier this month would raise taxes by by $1.5 billion over the next two years.