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Gov. Lamont proposes tax cut for small businesses. What could that mean?

Gov. Ned Lamont isn't offering many details about his tax cut proposal, but business groups have plenty of ideas.

John Craven

Jan 17, 2025, 9:56 PM

Updated 2 hr ago

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Here’s something you don’t hear often in Connecticut: a tax cut could be coming.
This week, Gov. Ned Lamont said he will propose tax relief for small businesses. Lamont isn’t offering more details yet, but businesses are offering up plenty of ideas.
“TAXES ARE SO CRAZY”
On the Post Road in Norwalk, you’ll find a taste of Haiti at the La Baguette Shop. The food is all made by hand – and all made by family.
“My mom is the owner,” said La Baguette’s Tamara Wilmart. “It’s family run, family owned.”
The bakery just opened two months ago. Wilmart was shocked at how expensive running a business is in Connecticut.
“We’re going to get hit with a tax bill, I’m sure,” she said. “Or feel like, ‘Oh my goodness, taxes are so, so crazy.’”
TAX CUT COMING?
But help could be on the way. This week, Lamont said that he will propose a tax cut for small businesses.
“Some small businesses do have a tax obligation, even though they really don’t have any income and de minimis revenues,” he told reporters Thursday. “That’s a group I really want to pay attention to.”
What exactly does that mean? Lamont is keeping his cards close to the vest; the full proposal will come out in his proposed state budget next month. But business groups have a long list of relief that they would like to see.
“Any tax relief is going to be well received by the business community,” said Connecticut Business and Industry Association president Chris DiPentima. “The governor has been hyper-focused on affordability.”
Affordability was the main focus of Lamont’s State of the State address last week.
BUSINESS GROUP IDEAS
DiPentima hopes Lamont will expand Connecticut’s “pass-through” tax credit. It’s a work-around to the Trump administration’s 2018 cap on State and Local Tax (SALT) deductions. Expanding the credit could benefit 120,000 businesses across the state, CBIA estimates.
Lamont could also expand tax credits for research and development.
“It’s very focused on the bioscience sector right now,” he said. “But there are a lot of industries in heavy research in Connecticut, and that helps establish their roots in the ground and expand their businesses.”
CBIA is also pushing for more industries to qualify for apprenticeship program tax credits.
“The manufacturing industry has been able to take an apprenticeship tax credit for the number of apprentices they bring in, but other industries like IT and health care have been advocating to get that apprenticeship expanded to them as well,” DiPentima said.
Another option for Lamont? Eliminating some of the dozens of state fees that businesses and licensed professionals must pay.
“We’d like to foster workforce participation through reforming occupational licensing,” said Carol Platt Liebau, president of the conservative Yankee Institute.
Whatever Lamont proposes, Wilmart hopes it’s a recipe for relief.
“Any kind of breaks that would come our way would be very much appreciated,” she said.
WHAT’S NEXT?
A tax cut is not a done deal.
Lamont will present his proposed state budget on Feb. 5. Then lawmakers will make changes and negotiate a final package with the governor’s office by June.
Lamont said his proposal will only include business tax relief – not another personal income tax cut. Two years ago, Lamont signed the first income tax reduction in three decades.