OLR Bill Analysis

sSB 232

AN ACT CONCERNING THE MANUFACTURING REINVESTMENT ACCOUNT PROGRAM.

SUMMARY:

This bill (1) exempts from corporation and personal income taxes 100%, rather than 50%, of any withdrawal from a manufacturing reinvestment account (MRA) that is used for eligible purposes; (2) reduces from 100 to 50 the number of manufacturers that can participate; and (3) increases, from 50 to 150, the maximum number of employees a manufacturer may have to be eligible for the program. As under current law, 100% of any withdrawal from an MRA that is used for any ineligible purpose is considered taxable income.

The MRA program is designed to help small manufacturers fund capital investments and train their workforces. Under the program, an approved Connecticut manufacturer may establish an MRA in a Connecticut bank and deposit up to $100,000 annually for up to five years. Taxes are deferred until funds are withdrawn, and the amount of taxes paid depends on whether the funds are used for eligible purposes. Eligible purposes include purchasing equipment for in-state facilities, training employees, or expanding facilities.

EFFECTIVE DATE: July 1, 2014, and applicable to income and taxable years starting on or after January 1, 2014

COMMITTEE ACTION

Commerce Committee

Joint Favorable Substitute

Yea

16

Nay

0

(03/11/2014)