Senator McKinney Backing Elimination Of Business Entity Tax

HARTFORD — Senate Republican Leader John McKinney who represents Newtown, is among a growing number of elected leaders hoping to encourage the retention and expansion of state businesses by calling for the elimination of the business entity tax.

Sen McKinney and House Republican Leader Lawrence F. Cafero, Jr, urged the General Assembly to abolish the business entity tax, noting that Republican legislators have been working to repeal the tax since it was first established in 2002.

“We should be doing everything we can to encourage small businesses to work and grow in Connecticut.” said Sen McKinney. “I am encouraged by the Secretary of State’s support for this proposal, which Republicans have advocated for the past six years. It is my hope that this will be part of a larger, bipartisan effort to create jobs and grow our economy by helping small business owners.”

Rep Cafero added, “Eliminating this punishing tax on all businesses has been a centerpiece of our tax reform strategy for years. Last year, with a $1 billion surplus, Republicans felt the state could afford this plan, but unfortunately it was disregarded.’’ 

State Senator Dan Debicella (R-21) and State Representative John Stripp (R-135), the ranking members of the Commerce Committee, welcomed bipartisan support for eliminating the business entity tax, and said they hope this signals the start of a larger bipartisan effort this year to help small businesses.

“Imposing a tax like this on Connecticut businesses, without regard as to whether they are small, medium, or large businesses, is exactly the wrong thing for us to do,” said Sen Debicella. “We need to encourage businesses to locate or keep operating in our state. We are extremely pleased to now have the support of the Secretary of the State and Democratic leaders, and hope we can finally get rid of this burdensome tax this year. This would be a positive first step toward promoting a better business climate in Connecticut.”

“The business entity tax is a tax on merely existing that disproportionately hurts small businesses,” said Rep Stripp. “There is no rationale for the tax, and it should clearly be repealed.”

Republican legislators most recently called for eliminating the business entity tax as part of their 2007 “No Tax Increase Budget” proposal. A Republican amendment that included the elimination of the business entity tax failed in 2007 on a 12-24 party-line vote in the Senate.

A similar amendment failed in the House.