🔒Here are key tax changes, economic development initiatives adopted by state lawmakers

The 2025 legislative session officially wrapped up on June 4, with state lawmakers passing a two-year, $55.8 billion budget.

The spending plan was panned by business groups, including the Connecticut Business & Industry Association, which said the legislature has “forgotten” about the state’s businesses.

The chief concerns are an additional $357 million in taxes that are being levied on businesses in Connecticut, and lawmakers’ efforts to side step the fiscal guardrails to increase spending by $2.6 billion over the next two years.

However, lawmakers also earmarked significant funding for economic development efforts.

And Gov. Ned Lamont has promised to veto a controversial bill that would provide unemployment benefits to striking workers.

Here are some new laws that will impact businesses.

Tax changes

Under the budget, corporations will pay an extra $232.9 million in taxes over the next two years combined due to changes in the unitary tax and net operating loss carry forwards.

The budget bill also includes the extension to 2028 of a 10% corporate tax surcharge that was set to expire; that change will raise another $128 million over the next two years.

On the positive side, the budget did provide some tax relief for the bioscience industry. Specifically, it increases, from 60% to 90%, the cash refund a qualifying small biotechnology company may receive for its unused research and development and research and experimental tax credits.

That will save companies $2.6 million over the next two years.

In addition, the agriculture industry will benefit from a new refundable business tax credit that farmers can use to offset the costs of machinery, equipment and building investments.

That’s projected to save farmers $5 million over the next two fiscal years.

Lawmakers also decided to eliminate occupational license and certification fees for nearly three dozen professions, saving workers $6.7 million over the next two years.

UConn, which has raised concerns about underfunding by the state, will benefit from a new incentive program that provides a tax credit to individuals or businesses that donate to the state’s flagship university. The program, which offers a 50% tax credit, is capped at $5 million per year.

Economic development efforts

In addition to changes in tax policy, lawmakers also approved funding for various economic development initiatives.

That includes $50 million over the coming two fiscal years to help finance the conversion of empty commercial buildings into new uses.

The Greyfield Revitalization program was included in the $9.7 billion capital budget that was also approved by legislators.

The capital budget, which is funded through bonding, is separate from the two-year, $55.8 billion General Fund budget, which is funded through tax revenues.

However, any project in the capital budget must still be approved by the state Bond Commission before it can move forward.

The Greyfield Revitalization program will provide grants or loans for the redevelopment of retail or office properties that are “economically nonviable” and not currently eligible for any brownfield remediation and development program.

The program will be set up by the Department of Economic and Community Development and work in partnership with two quasi-public economic development agencies: the Capital Region Development Authority and Connecticut Municipal Redevelopment Authority.

The capital budget authorizes up to $20 million in funding for the program in fiscal 2026, and $30 million in fiscal 2027.

The capital budget also allocated funding for various other economic development programs, including:

• $637 million over two years to fund housing programs run by the state Department of Housing, including for the development of new affordable housing;
• $80 million over two years for the Brownfield Remediation and Revitalization program;
• $55 million over two years for the Connecticut Manufacturing Innovation Fund, which provides grants to manufacturers that invest in technology, equipment or their workforce;
• $10 million for improvements at Tweed-New Haven Airport;
• $56 million over two years for CRDA to encourage new development;
• $34 million over two years for improvements and renovations to the Connecticut Convention Center and Rentschler Field;
• $10 million over two years for improvements and renovations to Hartford parking garages;
• $40 million over two years to encourage economic development in East Hartford;
• $30 million in fiscal 2027 to eventually recapitalize the Connecticut Municipal Redevelopment Authority;
• $30 million for the Office of Workforce Strategy to support “workforce innovation and sustainability.”