Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

February 18, 2015

Malloy to extend business taxes, limit credits

HBJ File Photo Gov. Dannel Malloy

In his proposed budget on Wednesday, Gov. Dannel P. Malloy wants to indefinitely extend the 20 percent surcharge on the corporations tax and limit the use of credits businesses and hospital can take to offset that tax.

The 20 percent surcharge on the corporation tax was supposed to sunset two years ago, as it was originally budgeted to help shore up government deficits. It again was supposed to sunset in July, but Malloy wants to extend that surcharge indefinitely now, said Benjamin Barnes, secretary of the Office of Policy & Management.

The indefinite extension of the corporation tax surcharge is expected to generate $44 million in revenues for fiscal year 2016 and another $75 million each in fiscals 2017 and 2018.

Malloy also wants to limit companies’ ability to use previous year net operating losses to offset their corporate tax liability, which would help generate an extra $156 million in fiscal 2016 and $90 million each in fiscals 2017 and 2018.

Malloy also is proposing to limit the use of tax credits that businesses can claim against the corporation tax to 35 percent in fiscal 2016, and then 45 percent in fiscal 2017, and then 60 percent thereafter. This limit also would apply to hospitals taking credit against the hospital taxes.

By limiting those tax credits, Malloy expects to generate $78 million in fiscal 2016, another $33 million in fiscal 2017, and $29 million in fiscal 2018.

These limitations on tax credits do not apply to Hartford conglomerate United Technologies Corp., which reached an $4.5 billion agreement with Malloy last year to use all of its research & development tax credits over the following 14 years in exchange for UTC keeping a significant presence in the state.

All of Malloy’s proposals – made public in his budget address on Wednesday – are subject to the approval of the legislature.

Sign up for Enews

Related Content


Order a PDF