OLR Bill Analysis

sHB 5317

AN ACT ESTABLISHING PILOT PROGRAMS EXEMPTING HUBZONE BUSINESSES FROM THE SALES TAX.

SUMMARY:

This bill requires the Department of Economic and Community Development (DECD) commissioner, in consultation with the revenue services commissioner, to set up pilot programs in three municipalities to exempt certified HUBZone businesses (see below) from paying state sales tax on taxable services or items they buy. The programs must be in three municipalities, one each in Hartford, New Haven, and Fairfield counties. They must terminate on June 30, 2011. The DECD commissioner must report on the programs annually by each October 1, starting in 2007, and continuing for the program's duration to the Commerce and Finance, Revenue and Bonding committees.

A HUBZone is a “historically under utilized business” zone established by the federal Small Business Administration. To become certified for the program under the federal law, a business must be located in a HUBZone and be owned or controlled by U. S. citizens. At least 35% of its employees must live in the zone.

EFFECTIVE DATE: July 1, 2006

COMMITTEE ACTION

Commerce Committee

Joint Favorable Substitute Change of Reference

Finance, Revenue and Bonding Committee

Joint Favorable