To the Editor:There’s been a lot of comment lately about Connecticut’s decision to adopt unitary reporting for corporate business taxes. That includes the Hartford Business Journal’s Aug. 31 editorial “State should repeal unitary reporting tax.” After a long litany of otherwise fair comments about state business taxes and the importance of keeping GE in Connecticut […]
To the Editor:
There's been a lot of comment lately about Connecticut's decision to adopt unitary reporting for corporate business taxes. That includes the Hartford Business Journal's Aug. 31 editorial “State should repeal unitary reporting tax.” After a long litany of otherwise fair comments about state business taxes and the importance of keeping GE in Connecticut if the company truly wants to stay, the editorial then makes an erroneous case for repealing unitary taxation that goes into effect next year.
GE is a good Connecticut company and taxpayer. At DRS, we join Governor Malloy's efforts to keep GE in Connecticut. GE may have many good reasons for questioning state spending and some of the recent tax changes, but the unitary tax is not one of them. Indeed, to the extent that GE has concerns, my agency has already reached out to engage them and others in planning implementation of the new law so that it works for Connecticut.
A unitary approach to corporate taxation does not disfavor Connecticut companies. The unitary tax does not disfavor companies doing business in other states or internationally. In fact, it favors Connecticut-based companies, which is why most already exercise the available election under state law to report business income this way. That's also why unitary reporting is the prevailing approach among the states — including New York, New Jersey, Massachusetts and Rhode Island.
More important, unitary reporting creates a level playing-field. Corporations (especially non-Connecticut based multi-jurisdictional businesses) will be far more restricted from engaging in aggressive “tax planning” and structuring that allocates income from doing business in Connecticut to anywhere but Connecticut simply in order to gain the least taxation possible.
Now, let's stop confusing the issue and get back to seeing what we can do to help GE and other Connecticut-based businesses.
Kevin B. Sullivan Commissioner of Revenue Services
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