AN ACT CONCERNING THE AFFECTED BUSINESS ENTITY TAX AND THE CREDIT RELATED THERETO AND ESTABLISHING A SURCHARGE ON THE AMOUNT OF FEDERAL QUALIFIED BUSINESS INCOME DEDUCTIONS CLAIMED BY CERTAIN FILERS.

Plain English Breakdown

The bill text confirms the surcharge and credit percentages but does not provide an effective date or detailed definitions of 'affected' businesses beyond referencing existing statutes.

Changes to Business Entity Tax and Income Deduction Surcharge

This bill adds a surcharge to the affected business entity tax, adjusts credit amounts for certain income brackets, and creates a new fee on federal qualified business income deductions claimed by filers in the highest marginal rate.

What This Bill Does

• Adds a one percentage point surcharge to the tax imposed under chapter 228z of the general statutes.
• Reduces the credit allowed against this tax to 83.6% for filers subject to the highest marginal rate under section 12-700.
• Increases the credit allowed against this tax to 93.01% for filers subject to the three lowest marginal rates under section 12-700.
• Establishes a ten percent surcharge on the amount of the qualified business income deduction claimed by filers subject to the highest marginal rate.

Who It Names or Affects

• Entities or individuals subject to the tax imposed under chapter 228z of the general statutes.
• Filers subject to the highest marginal rate under section 12-700 of the general statutes.
• Filers subject to the three lowest marginal rates under section 12-700 of the general statutes.

Terms To Know

Affected Business Entity Tax

The tax imposed under chapter 228z of the general statutes, which this bill amends with a surcharge and credit adjustments.

Surcharge

An additional percentage added to an existing tax amount or deduction as established by this act.

Qualified Business Income Deduction

A federal income tax deduction for business earnings, which is subject to a new surcharge under this bill for certain filers.

Limits and Unknowns

• The official text does not state the specific date when these changes will take effect.
• The source material cites chapter 228z and section 12-700 but does not define which businesses or individuals fall into those categories.

Official Summary Text

To (1) establish a surcharge on the affected business entity tax and adjust, for certain personal income tax marginal rates, the amount of the credit allowed against said tax, and (2) establish a surcharge on the amount of the qualified business income deduction claimed for federal income tax purposes by filers subject to the highest marginal rate under section 12-700 of the general statutes.

Current Bill Text

LCO No. 946 1 of 2

General Assembly Proposed Bill No. 5186
February Session, 2026 LCO No. 946

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
REP. DOUCETTE, 13th Dist.
REP. BIGGINS, 11th Dist.
REP. BROWN, 56th Dist.
REP. BROWN M., 127th Dist.
REP. CHAFEE, 33rd Dist.
REP. DEMICCO, 21st Dist.
REP. ELLIOTT, 88th Dist.
REP. FARRAR, 20th Dist.
REP. FORTIER, 79th Dist.
REP. GAUTHIER, 38th Dist.
REP. GILCHREST, 18th Dist.
REP. GODFREY, 110th Dist.
REP. GUCKER, 138th Dist.
REP. HEFFERNAN, 115th Dist.
REP. JOHNSON, 49th Dist.
REP. KAVROS DEGRAW, 17th Dist.
REP. KEITT, 134th Dist.
REP. KHAN, 5th Dist.
REP. LEMAR, 96th Dist.
REP. LUXENBERG, 12th Dist.
REP. MARTINEZ, 22nd Dist.
REP. MENAPACE, 37th Dist.
REP. MCGEE T., 116th Dist.
REP. MORRIN BELLO, 28th Dist.
REP. NOLAN, 39th Dist.
REP. PARIS, 145th Dist.
REP. ROCHELLE, 104th Dist.
REP. SHAKE, 120th Dist.
REP. SHANNON, 117th Dist.
REP. SIMMS, 140th Dist.
SEN. SLAP, 5th Dist.
REP. SWEET, 91st Dist.
REP. TURCO, 27th Dist.
REP. WINTER, 94th Dist.

AN ACT CONCERNING THE AFFECTED BUSINESS ENTITY TAX AND
THE CREDIT RELATED THERETO AND ESTABLISHING A
SURCHARGE ON THE AMOUNT OF FEDERAL QUALIFIED BUSINESS
INCOME DEDUCTIONS CLAIMED BY CERTAIN FILERS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

That title 12 of the general statutes be amended to (1) establish a one 1
Proposed Bill No. 5186

LCO No. 946 2 of 2

percentage point surcharge on the tax imposed under chapter 228z of 2
the general statutes, (2) reduce the credit allowed against said tax, for 3
filers subject to the highest marginal rate under section 12 -700 of the 4
general statutes, to eighty-three and six-tenths per cent, (3) increase the 5
credit allowed against said tax, for filers subject to the three lowest 6
marginal rates under section 12 -700 of the general statutes, to ninety -7
three and one -hundredths per cent, and (4) establish a ten per cent 8
surcharge on the amount of the qualified business income deduction 9
claimed for federal income tax purposes by filers subject to the highest 10
marginal rate under section 12-700 of the general statutes. 11
Statement of Purpose:
To (1) establish a surcharge on the affected business entity tax and
adjust, for certain personal income tax marginal rates, the amount of the
credit allowed against said tax, and (2) establish a surcharge on the
amount of the qualified business income deduction claimed for federal
income tax purposes by filers subject to the highest marginal rate under
section 12-700 of the general statutes.