Constitution State News

Connecticut is considering legislation, HB-5549, that aims to restore the credit against the state's Pass-through Entity Tax (PET) to its original value of 93.01%. This tax policy was initially established under Public Act 18-49 but currently stands at an 87.5% credit.

The National Federation of Independent Business (NFIB) has expressed strong support for this legislative proposal. State Director Andy Markowski provided testimony, noting that when the PET was first introduced, it represented a novel approach in tax policy. It gained approval from both the Department of Treasury and the IRS and served as a model for other states. The PET was designed to help small business owners structured as pass-through entities manage challenges posed by the $10,000 deduction limit for state and local taxes, known as the SALT cap, implemented under federal tax reform by Congress in 2017.

Additional insights into this issue can be found through various testimonies available online.