Rep. Flexer joins small business owners in call for tax code changes
By Denise Coffey - Staff Writer
Killingly - posted Mon., Apr. 29, 2013
State Rep. Mae Flexer (D-44) joined small business owners Jeff Bousquet and Don Dauphinais, and Peter DeBiasi, President/CEO of The Access Community Agency in Danielson on April 29, to draw attention to tax loopholes that many multi-state corporations take advantage of to the detriment of residents and small businesses in the state.
Flexer, who introduced a bill calling for mandatory combined reporting, said the change would benefit small businesses as well as the state. It would treat large corporations, their subsidiaries and affiliates as a single corporation for tax purposes. Connecticut's current tax laws allow multi-state companies to shift profits to subsidiaries in states that do not have corporate income taxes.
Provisions for combined reporting were not included in the tax package recommended by the Finance Committee. “Many of my colleagues in the House of Representatives think this is a good idea,” Flexer said. “It's a fairness issue for small businesses and a revenue generator of the state.”
Jeff Bousquet said closing the tax loopholes available to large corporations and on-line retailers would level the playing field. “My little store pays more income tax than the larger companies,” he said. “It would benefit local businesses whether they were banks or clothing stores.”
Mandatory combined reporting would also generate millions of dollars for the state when it's facing drastic budget cuts. “We're considering dramatic cuts to hospitals, community colleges and municipal aid,” Flexer said. “Closing these loopholes will raise revenues and prevent those cuts from happening.”
Better Choices for Connecticut, a coalition of more than 40 labor, human services and community organizations, estimates that the failure to require combined reporting costs Connecticut $50 to $120 million a year. “It’s fitting that we’re standing here with these washing machines,” said John Humphries, campaign coordinator for Better Choices. “This corporate tax loop hole amounts to legal money laundering through bookkeeping tricks that allow a large corporation to shift profits to another state with no corporate income tax. That way they avoid paying their fair share of taxes here in Connecticut.”