Connecticut businesses are pummeled from all sides by legislative changes impacting tax and financial reporting. And beyond legislative impacts, the process of corporate taxation is squeezing businesses in other ways. “In a Compliance Week analysis of 400 companies that reported material weaknesses in their most recent annual reports, one-third attributed problems to taxes,” says Mike Burke, director of tax operations, Tri-State area, for Jefferson Wells. “Tax related restatements [thus far in 2006] are ahead of the pace observed in 2005. Confounding the process, corporate tax accounting has been swept up in the perfect storm of [the Sarbanes-Oxley Act of 2002], a regulatory crackdown on abusive tax shelters, and a skilled workforce shortage,” he says.

The 2006 crop of new laws, credits and reforms reflect two over-riding themes: job creation and compliance. Connecticut Business Magazine spoke with a statewide panel of experts who shared some of the highlights.

By Deborah Nason

State Legislative Changes
Employment is very much on the minds of Connecticut legislators, who introduced new tax credits aimed at hiring displaced workers and creating new jobs. Carol Swinkin, CPA, with North Haven-based Seward and Monde, discusses several new legislative changes in the state that will impact businesses, going forward.
Displaced Workers Tax Credit: “This relates to people who worked in Connecticut and lost their jobs due to layoffs or restructuring,” she explains. “If you hire these people at 75 percent of their salary or more, you can get a tax credit for each displaced worker, after the employee completes 12 full months. They’re really trying to beef up jobs in the state.”

New Jobs Creation Tax Credit: “This is for companies that are new to Connecticut, which are creating at least 50 new permanent jobs (of at least 35 hours per week). The credit can be up to 25 percent of the income tax withheld from the new employees.

GET CT BUSINESS MAGAZINE TODAY

Also in the Current Issue:
Feature	Power Lunch	Regional Profile