State Representative Irene Haines (R-34) submitted legislative proposals to eliminate the state’s Business Entity Tax and revise the depreciation schedule for commercial construction equipment.
The Business Entity Tax (BET) is $250 fee paid every other year by all types of businesses: S corporations, LLCs, SMLLCs, LLPs, and LPs in order to obtain a certificate from the Secretary of the State to conduct business in Connecticut.
“In terms of revenue and tax policy, this is a small change, but it will have a big impact on small businesses, start-ups, and how entrepreneurs view our state,” said Rep. Haines. “We need to treat businesses small and large as community partners, not revenue sources. I am also excited that this idea has bi-partisan support as Democrat and Republican legislators have submitted proposals to do away with this tax.”
Rep. Haines’ other proposal ‘An Act Concerning the Depreciation Schedule for Commercial Construction Equipment’ would change state statutes and require construction equipment to be taxed on the same depreciation schedule as other business property. Currently, machinery and farm equipment is taxed on a depreciation schedule starting at 90% of the purchase price and continues to depreciate incrementally each year until it reaches 30%. Construction equipment is not depreciated and is taxed similar to motor vehicles based on market value plus set up and delivery.
The bill proposal period closed on Friday, January 18th. Once a bill proposal is submitted, it is referred to the appropriate committee to be combined with similar proposals and receive a public hearing. If the legislation is approved by the committee, it will then proceed to the House and Senate for a vote.