HARTFORD, Conn. (WTNH) – A proposal from Governor Ned Lamont would put money back in the hands of small businesses. The tax cut would affect over 120,000 small and mid-size businesses in the state.
This is Lamont’s first proposal this legislative session and would save these businesses millions of dollars in taxes.
“Despite what the federal government is doing in terms of capping that and what that means in terms of tax increases for small businesses not here in Connecticut,” Lamont said.
The move would restore the state’s pass-through entity tax credit back to the initial 93%. As a result, small businesses could claim a larger credit on their personal returns, which would save them money.
“It’s a really simple way of directly helping small businesses,” said Max Kothari, owner and CEO of Express Kitchens.
The owner and CEO of Express Kitchens in Hartford put the numbers to the test. Their answer is tens of thousands of dollars in savings.
“Bills are going up, gas bills are going up, our supplies are going up,” Kothari said. “This is the first time we are talking about something going down.”
“We can only pass off so much of the cost on the consumer,” said Michael Acosta, co-owner of Story and Soil Coffee. “As far as just revenue, oh we’re still down.”
Connecticut was the first in the nation to apply for the pass-through entity tax credit. Now, more than half of the country has done the same. Small business owners like Acosta are hoping the proposal is approved.
“In 2020, when the pass-through entity tax hit, that was particularly difficult for small business owners,” Acosta said. “Having that credit would be incredibly helpful.”
The legislative proposal will also recommend allowing business owners to decide whether to pay income tax at the personal or business level. The proposal will be presented to the general assembly in February.