Mar 02, 2015
From KPMG TaxWatch
Recently introduced Senate Bill 946 includes numerous tax changes necessary to implement Governor Malloy’s budget. Notably, on the Corporation Business Tax side, the 20 percent corporate surtax is made permanent. This surtax was originally scheduled to sunset after the 2015 tax year. Recall, the surtax does not apply to taxpayers that pay the $250 minimum tax, or that have less than $100 million in gross income for the tax year. However, taxpayers filing unitary or combined returns are subject to the surtax regardless of income. For tax years beginning on or after January 1, 2015, Senate Bill 946 would also limit the use of NOL carryovers to 50 percent of a taxpayer’s liability. Finally, the current cap on use of credits to offset Corporation Business Tax is reduced from 70 percent to 35 percent of the tax due in 2015. The cap increases to 45 percent for 2016 and to 60 percent in 2017 and beyond. The bill would also eliminate the $250 Business Entity Tax.
On the sales and use tax side, Senate Bill 946 would reduce the sales and use tax rate from 6.35 percent to 6.20 percent on November 1, 2015. The rate would be further reduced to 5.95 percent on April 1, 2017. Finally, the bill would eliminate the exemption for clothing and footwear costing less than $50 that was scheduled to commence in July 2015. The proposal does, however, contemplate a sales and use tax holiday each year when certain items of clothing and footwear costing less than $100 would be exempt from sales and use tax. Please stay tuned to TWIST for future updates on the pending Connecticut tax changes.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.