Full Repeal of the Entity Tax
NFIB Position: NFIB supports and is leading the charge on repealing the entity tax in 2006. This tax has had sunset provisions that make small businesses feel like they are living through a never-ending summer in Alaska.
Issue Status: The Speaker of the House Jim Amann made a commitment to NFIB/Connecticut to fight for repeal this year. There is a growing state surplus and the entity tax is something many legislators have heard about from their small-business owners. The outright repeal is nearly three years in the making. It started as a temporary $250 tax on small businesses to help defray a budget deficit and it was on the books less than six months when it was increased to $300 and then back to $250 and up to $300 again and then the sunset was delayed again. In 2005 the legislature "again" voted to eliminate repeal and tack on a 20 percent surcharge in 2006 and a 15 percent surcharge in 2007. The entity tax is under discussion as part of an omnibus tax and spending package. The tax writing finance committee will report out its final action on April 6. Final action by the General Assembly is expected by adjournment on May 3.
What to Do: You must stand up and be heard now. We must continue to remind legislators that small business is watching for the money grab again. Tell other small-business owners you do business with about this tax. Tell other small-business owners about NFIB's effort to repeal the entity tax. When talking to other businesses and "your" legislators, tell them what you think of this arbitrary money grab from small businesses. NFIB is leading the charge for repealing the whole mess this year.
What to Say: Tell them you are a small business and you are watching.
Tell them:
- This is just another tax on small businesses.
- You collect sales taxes for free and process income taxes for employees for free as a cost of doing business.
- Many small businesses also pay for special state permits and state business licenses related to the type of business they conduct.
- You pay sales taxes for goods and services and personal income taxes too.
- In return for the privilege of putting our lives, our capital, and our energy into running a business we are asked to pay the entity tax because – we are small businesses.
- You want them to vote for the repeal of the entity tax this year. Tell them it is an NFIB vote record issue.
