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Tax Incentives and High Quality of Life Offer Opportunities for Businesses Moving to Connecticut

May 10, 2017

Morshedul Haque, CPA, MST

For many years Connecticut has had the reputation of being a desirable place for people to run small to mid-sized businesses, for a variety of reasons which still ring true today. For those considering moving a business to Connecticut, there are plenty of positive factors to consider.

High Quality of Life Makes Connecticut an Attractive State for Businesses

First and foremost, and the reason often cited as the most common for wanting to locate or relocate in Connecticut, is the high quality of life the state offers, beginning—very importantly—with Connecticut being the wealthiest state in the nation. A report issued in late March by the U.S. Bureau of Economic Analysis shows that Connecticut continues to lead the nation in per capita income by a wide margin—at $71,033, Connecticut soars past the national average of $49,571, and even surpasses the next-highest state (Massachusetts) by nearly $6,000.

Being the wealthiest state means other tangible benefits as well, such as livable communities, excellent schools, a well-educated population and a highly skilled workforce. Connecticut has an impressive mix of both large and small businesses, and often these entities are able to work together and support each other. Though a small state, it has a high concentration of some of the finest college and universities, from Yale to Wesleyan to the U.S. Coast Guard Academy to Trinity to the University of Connecticut. And when factoring in the state’s close proximity to major metro areas New York and Boston, it all adds up to an attractive place to considering locating a new or existing business.

Connecticut Business Landscape and Tax Incentives

The business landscape in Connecticut today is a highly motivated one, with state government and the business community—for the first time in many years—attempting to work together in a cooperative and collaborative way. The Connecticut Business and Industry Association (CBIA) has reached out to the Governor and state lawmakers to work together, and the result has been a much greater sense of teamwork between the public and private sector.

Additionally many opportunities exist for tax incentives through the state for businesses considering locating or relocating here. These are created by the Department of Economic and Community Development; they can be found at www.ct.gov/ecd and include:

  • Research and Development Tax Credits 
  • Job Expansion Tax Credit (JET)
  • Urban and Industrial Site Reinvestment Tax Credit 
  • Fixed Capital Tax Credit 
  • Machinery and Equipment Tax Credit 
  • Financial Services Tax Credit 
  • Angel Investor Tax Credit 
  • Manufacturing Reinvestment Account (MRA) Program
  • Urban and Industrial Site Reinvestment Tax Credit

Many of these credits and incentives could help to offset perhaps the biggest challenge faced by Connecticut’s business community—the state’s higher tax rate for individuals and businesses. This has hindered business growth in recent years, but again, the indication now is a business community and state government much more willing to work together. This is good news for those considering coming here.

Resources for Moving Your Business to Connecticut

In terms of the logistics required to locate a small business in Connecticut, an excellent resource exists within the Small Business Administration.  This site can help to walk prospective Connecticut business step by step through the process of establishing themselves here, including information about:

  • Tax registration
  • Business licenses
  • Permitting
  • Incorporation filing
  • Doing Business As

Connecticut’s many assets and status as the nation’s wealthiest state continue to make it an attractive place for prospective businesses and their owners. A sustained focus on new business development means positive signs for 2017 and beyond, and could prove beneficial to businesses strongly considering coming here.

View Morshedul's Bio Here >>

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Disclaimer: Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statues, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law.

 

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