On June 4, 2015, following extensive negotiations between the legislature and the Governor’s office, the Connecticut General Assembly passed H.B. 7061 (the “Budget Bill”) into law.  The controversial two-year Budget Bill is expected to generate $40.3 billion in revenue and includes significant tax increases for Connecticut businesses and individuals.  Governor Malloy has proposed trimming $224 million from the Budget Bill’s tax hikes by cutting state spending by 1.5%.  The Governor’s proposed changes, the details […]

Under current law, distributions made by corporations may – for tax purposes – be treated either as dividends or as a tax-neutral repayment of capital to the extent that sufficient paid-in capital exists despite being in the form of a dividend distributions. Dividends result in (taxable) income on the level of the shareholders. In contrast, a repayment of capital reduces the shareholder’s tax basis of the shareholding. Pursuant to the draft tax bill of […]