Sec. 12-213. Definitions. (a) When used in this part, unless the context otherwise requires:
(1) "Taxpayer" and "company" mean any corporation, foreign municipal electric utility, as defined in section 12-59, electric distribution company, as defined in section 16-1, electric supplier, as defined in section 16-1, generation entity or affiliate, as defined in section 16-1, joint stock company or association or any fiduciary thereof and any dissolved corporation which continues to conduct business but does not include a passive investment company or municipal utility, as defined in chapter 212 and chapter 212a;
(2) "Dissolved corporation" means any company which has terminated its corporate existence by resolution, expiration, decree or forfeiture;
(3) "Commissioner of Revenue Services" or "commissioner" means the Commissioner of Revenue Services;
(4) "Tax year" means the calendar year in which the tax is payable;
(5) "Income year" means the calendar year upon the basis of which net income is computed under this part, unless a fiscal year other than the calendar year has been established for federal income tax purposes, in which case it means the fiscal year so established or a period of less than twelve months ending as of the date on which liability under this chapter ceases to accrue by reason of dissolution, forfeiture, withdrawal, merger or consolidation;
(6) "Fiscal year" means the income year ending on the last day of any month other than December or an annual period which varies from fifty-two to fifty-three weeks elected by the taxpayer in accordance with the provisions of the Internal Revenue Code;
(7) "Paid" means "paid or accrued" or "paid or incurred", construed according to the method of accounting upon the basis of which net income is computed under this part;
(8) "Received" means "received" or "accrued", construed according to the method of accounting upon the basis of which net income is computed under this part;
(9) (A) "Gross income" means gross income, as defined in the Internal Revenue Code, and, in addition, means any interest or exempt interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, received by the taxpayer or losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, incurred by the taxpayer which are excluded from gross income for purposes of assessing the federal corporation net income tax, and in addition, notwithstanding any other provision of law, means interest or exempt interest dividends, as defined in said Section 852(b)(5) of the Internal Revenue Code, accrued on or after the application date, as defined in section 12-242ff, with respect to any obligation issued by or on behalf of the state, its agencies, authorities, commissions and other instrumentalities, or by or on behalf of its political subdivisions and their agencies, authorities, commissions and other instrumentalities;
(B) "Gross income" shall not include the amount which for federal income tax purposes is treated as a dividend received by a domestic United States corporation from a foreign corporation on account of foreign taxes deemed paid by such domestic corporation, when such domestic corporation elects the foreign tax credit for federal income tax purposes;
(C) "Gross income" shall not include any amount which for federal income tax purposes is treated as a dividend received directly or indirectly by a taxpayer from a passive investment company;
(10) "Net income" means net earnings received during the income year and available for contributors of capital, whether they are creditors or stockholders, computed by subtracting from gross income the deductions allowed by the terms of section 12- 217, except that in the case of a domestic insurance company which is a life insurance company "net income" means life insurance company taxable income (A) increased by any amount or amounts which have been deducted in the computation of gain or loss from operations in respect of (i) the life insurance company's share of tax-exempt interest, (ii) operations loss carry-backs and capital loss carry-backs and (iii) operations loss carry- overs and capital loss carry-overs arising in any taxable year commencing prior to January 1, 1973, and (B) reduced by any amount or amounts which have been deducted as operations loss carry-backs or capital loss carry-backs in the computation of gain or loss from operations for any taxable year commencing on or after January 1, 1973, but only to the extent that such amount or amounts, would, for federal tax purposes, have been deductible in the taxable year as operations loss carry-overs or capital loss carry-overs if they had not been deducted in a previous taxable year as carry-backs and provided no expense related to income, the taxation of which by the state of Connecticut is prohibited by the law or Constitution of the United States, as applied, or by the law or Constitution of this state, as applied, shall be deducted under this chapter and provided further no item may, directly or indirectly be excluded or deducted more than once;
(11) "Life insurance company" has the same meaning as it has under the Internal Revenue Code;
(12) "Life insurance company taxable income" has the same meaning as it has under the Internal Revenue Code;
(13) "Life insurance company's share" has the same meaning as it has under the Internal Revenue Code;
(14) "Operations loss carry-over", with respect to a life insurance company, has the same meaning as it has under the Internal Revenue Code;
(15) "Operations loss carry-back", with respect to a life insurance company, has the same meaning as it has under the Internal Revenue Code;
(16) "Capital loss carry-over", with respect to a life insurance company, has the same meaning as it has under the Internal Revenue Code;
(17) "Capital loss carry-back", with respect to a life insurance company, has the same meaning as it has under the Internal Revenue Code;
(18) "Gain or loss from operations", with respect to a life insurance company, has the same meaning as it has under the Internal Revenue Code;
(19) "Fiduciary" means any receiver, liquidator, referee, trustee, assignee or other fiduciary or officer or agent appointed by any court or by any other authority, except the Commissioner of Banking acting as receiver or liquidator under the authority of the provisions of sections 36a-210 and 36a-218 to 36a-239, inclusive;
(20) (A) "Carrying on or doing business" means and includes each and every act, power or privilege exercised or enjoyed in this state, as an incident to, or by virtue of, the powers and privileges acquired by the nature of any organization whether the form of existence is corporate, associate, joint stock company or fiduciary, and includes the direct or indirect engaging in, transacting or conducting of activity in this state by an electric supplier, as defined in section 16-1, or generation entity or affiliate, as defined in section 16-1, for the purpose of establishing or maintaining a market for the sale of electricity or of electric generation services, as defined in section 16-1, to end use customers located in this state through the use of the transmission or distribution facilities of an electric distribution company, as defined in section 16-1, or, until unbundled in accordance with section 16-244e, electric company, as defined in section 16-1.
(B) A company that has contracted with a commercial printer for printing and distribution of printed material shall not be deemed to be carrying on or doing business in this state because of (i) the ownership or leasing by that company of tangible or intangible personal property located at the premises of the commercial printer in this state, (ii) the sale by that company of property of any kind produced or processed at and shipped or distributed from the premises of the commercial printer in this state, (iii) the activities of that company's employees or agents at the premises of the commercial printer in this state, which activities relate to quality control, distribution or printing services performed by the printer, or (iv) the activities of any kind performed by the commercial printer in this state for or on behalf of that company;
(21) "Alternative energy system" means design systems, equipment or materials which utilize as their energy source solar, wind, water or biomass energy in providing space heating or cooling, water heating or generation of electricity, but shall not include wood-burning stoves;
(22) "S corporation" means any corporation which is an S corporation for federal income tax purposes and includes any subsidiary of such S corporation that is a qualified subchapter S subsidiary, as defined in Section 1361(b)(3)(B) of the Internal Revenue Code, all of whose assets, liabilities and items of income, deduction and credit are treated under the Internal Revenue Code, and shall be treated under this chapter, as assets, liabilities and such items, as the case may be, of such S corporation;
(23) "Internal Revenue Code" means the Internal Revenue Code of 1986, or any subsequent internal revenue code of the United States, as from time to time amended, effective and in force on the last day of the income year;
(24) "Partnership" means a partnership, as defined in the Internal Revenue Code, and includes a limited liability company that is treated as a partnership for federal income tax purposes;
(25) "Partner" means a partner, as defined in the Internal Revenue Code, and includes a member of a limited liability company that is treated as a partnership for federal income tax purposes;
(26) "Investment partnership" means a limited partnership that meets the gross income requirement of Section 851(b)(2) of the Internal Revenue Code, except that income and gains from commodities that are not described in Section 1221(1) of the Internal Revenue Code or from futures, forwards and options with respect to such commodities shall be included in income which qualifies to meet such gross income requirement, provided such commodities are of a kind customarily dealt with in an organized commodity exchange and the transaction is of a kind customarily consummated at such place, as required by Section 864(b)(2)(B)(iii) of the Internal Revenue Code. To the extent that such a partnership has income and gains from commodities that are not described in Section 1221(1) of the Internal Revenue Code or from futures, forwards and options with respect to such commodities, such income and gains must be derived by a partnership which is not a dealer in commodities and is trading for its own account as described in Section 864(b)(2)(B)(ii) of the Internal Revenue Code. The term "investment partnership" does not include a dealer, within the meaning of Section 1236 of the Internal Revenue Code, in stocks or securities;
(27) "Passive investment company" means any corporation which is a related person to a financial service company, as defined in section 12-218b, or to an insurance company, as defined in section 12-218b, and (A) employs not less than five full-time equivalent employees in the state; (B) maintains an office in the state; and (C) confines its activities to the purchase, receipt, maintenance, management and sale of its intangible investments, and the collection and distribution of the income from such investments, including, but not limited to, interest and gains from the sale, transfer or assignment of such investments or from the foreclosure upon or sale, transfer or assignment of the collateral securing such investments. For purposes of this subdivision, "intangible investments" shall be limited to loans secured by real property, as defined in section 12- 218b, including a line of credit which is a loan secured by real property and which permits future advances by the passive investment company; the collateral or an interest in the collateral that secured such loans if the sale of such collateral or interest is actively marketed by or on behalf of the passive investment company; and any short-term investment of cash held by the passive investment company which cash is reasonably necessary for the operations of such passive investment company.
(b) As used in sections 12-214, 12-218 and 12-219a:
(1) "Limited partner" means a limited partner of a limited partnership that is treated as a partnership for federal income tax purposes and includes a member of a limited liability company that is treated as a partnership for federal income tax purposes and that is managed by managers, if such member is not a member-manager of such company;
(2) "General partner" means a partner of a general partnership, a general partner of a limited partnership that is treated as a partnership for federal income tax purposes and a partner of a limited liability partnership and includes a member of a limited liability company that is treated as a partnership for federal income tax purposes if such company is managed by managers and such member is a member-manager of such company, or if such company is not managed by managers;
(3) "Member-manager" means a member of a limited liability company that is treated as a partnership for federal income tax purposes, which member is, alone or together with others, vested with the management of the business, property and affairs of the limited liability company;
(4) "Proportionate part" means, with respect to a partner of a partnership, the percentage that the partnership used to determine such partner's distributive share of the ordinary income or loss of the partnership in an income year;
(5) "Derived from or connected with sources within this state" has the same meaning as it has under chapter 229 and the regulations adopted thereunder;
(6) "Distributive share" means, with respect to a partner of a partnership, such partner's distributive share of ordinary income or loss as determined for federal income tax purposes in an income year.
(1949 Rev., S. 1896; 1949, 1951, 1953, S. 1088d, 1105d; 1957, P.A. 560, S. 1; 1961, P.A. 376, S. 1; 428, S. 1; 1967, P.A. 741, S. 1; June, 1969, P.A. 1, S. 12; P.A. 73-350, S. 5, 27; 73-442, S. 3; P.A. 77-614, S. 139, 161, 610; P.A. 80-406, S. 3, 5; 80-482, S. 18, 348; 80-483, S. 53, 186; P.A. 82-400, S. 1, 3; P.A. 87-9, S. 2, 3; June Sp. Sess. P.A. 91-3, S. 98, 168; P.A. 95-2, S. 3, 37; P.A. 96-104, S. 1, 4; 96-139, S. 2, 13; 96-180, S. 25, 166; 96-197, S. 2, 11; P.A. 97-295, S. 3, 25; P.A. 98-28, S. 114, 115, 117; 98-110, S. 12, 27; 98-244, S. 5, 35; 98-262, S. 14, 22; P.A. 00-174, S. 21, 83.)
History: 1961 acts added definition of "dissolved corporation," last alternative to definition of income year, and reference to state bank and trust companies and national banks in definition of interest paid; 1967 act excluded from consideration as gross income amount which for federal income tax purposes is treated as a dividend received by domestic corporation from foreign corporation on account of foreign taxes paid by domestic corporation when foreign tax credit elected; 1969 act excluded municipal utilities under chapters 212 and 212a from consideration as taxpayer or company; P.A. 73-350 added exception in definition of "net income" and defined terms for purposes of the exception, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 73-442 included foreign municipal electric utilities in definition of "taxpayer" and "company"; P.A. 77-614 substituted commissioner of revenue services for tax commissioner and banking commissioner within the department of business regulation for bank commissioner and made banking department a division within the department of business regulation, effective January 1, 1979; P.A. 80-406 defined "alternative energy system"; P.A. 80-482 deleted reference to abolished department of business regulation; P.A. 80-483 deleted reference to building and loan associations in definition of "interest paid"; P.A. 82-400 amended the definition of gross income to provide that with respect to a corporation engaged primarily in farming, gross income for purposes of the state corporation business tax does not include net gain from the sale of cattle raised on a farm owned by the corporation in this state, effective June 7, 1982 and applicable to income years of corporations commencing on or after January 1, 1981; pursuant to P.A. 87-9, "banking commissioner" was changed editorially by the Revisors to "commissioner of banking"; June Sp. Sess. P.A. 91-3 added the definition of "S corporation", effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 95-2 redefined "gross income" to include exempt interest dividends under Sec. 852(b)(5) of the Internal Revenue Code, effective March 8, 1995; P.A. 96-104 redefined "carrying on or doing business" to add exception re companies contracting with commercial printers and made technical changes, effective July 1, 1996, and applicable to taxable years commencing on or after January 1, 1996; P.A. 96-139 redefined "net income" to specify that no expense related to income which is not taxable shall be deducted and that no item may be excluded or deducted more than once, made technical changes and deleted definition of "interest paid", effective May 29, 1996; P.A. 96-180 conformed Subdiv. and Subpara indicators to customary statutory usage, effective June 3, 1996; P.A. 96-197 designated existing section as Subsec. (a), revising Subdiv. and Subpara. indicators to conform with customary statutory usage and adding definitions of "internal revenue code", "partnership", "partner" and "investment partnership" and added new Subsec. (b), effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 97- 295 amended Subdiv. (9) of Subsec. (a) to delete exclusion for sale of homegrown cattle from Subpara. (B), effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 98-28 amended Subsec. (a)(1) by adding electric distribution companies, electric suppliers and generation entities or affiliates and amended Subsec. (a)(20) by splitting language into Subparas. (A) and (B) and redesignating clauses accordingly, and by adding provision in Subpara. (A) re the direct or indirect engaging in, transacting or conducting of activity for the purpose of the sale of electricity or electric generation services, effective April 29, 1998; P.A. 98-110 amended Subsec. (a) to add Subdiv. (27) defining "passive investment company" and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999 (Revisor's note: In Subsec. (a)(1) the Revisors changed the verb following "Taxpayer" and "company" from "means" to "mean"); P.A. 98-244 amended definition of "S corporation" to include any qualified subchapter S subsidiary in the definition, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 00- 174 made a technical change in Subsec. (a)(20)(A), effective May 26, 2000.
Cited. 127 C. 509; 130 C. 461; 135 C. 48; 142 C. 492. Retroactive effect not unconstitutional. Applies to federal savings and loan associations. 142 C. 483. Cited. 178 C. 243, 245; 179 C. 363, 365, 366. Cited. 199 C. 346, 350. Cited. 202 C. 583, 593. Cited. 220 C. 665, 676, 678. Cited. 224 C. 426, 437, 439. Cited. 235 C. 865, 869, 870.
Cited. 15 CS 205. Provision for fiscal year varying from fifty-two to fifty-three weeks incorporates provisions of internal revenue code pertinent to the effective use of this accounting method, including provision that such fiscal year be treated as beginning on first day of month in determining applicability of new tax provisions. 32 CS 127. Cited. 40 CS 77, 80, 83. Cited. 44 CS 90, 100.

(Return to TOC) (Return to Chapters) (Return to Titles)

Sec. 12-214. Imposition of tax. (a)(1) Every mutual savings bank, savings and loan association and every company engaged in the business of carrying passengers for hire over the highways of this state in common carrier motor vehicles doing business in this state, and every other company carrying on, or having the right to carry on, business in this state, including a dissolved corporation which continues to conduct business, except those companies described in subdivision (2) of this subsection, shall pay, annually, a tax or excise upon its franchise for the privilege of carrying on or doing business, owning or leasing property within the state in a corporate capacity or as an unincorporated association taxable as a corporation for federal income tax purposes or maintaining an office within the state, such tax to be measured by the entire net income as herein defined received by such corporation or association from business transacted within the state during the income year and to be assessed for each income year commencing prior to January 1, 1995, at the rate of eleven and one-half per cent, for income years commencing on or after January 1, 1995, and prior to January 1, 1996, at the rate of eleven and one-quarter per cent, for income years commencing on or after January 1, 1996, and prior to January 1, 1997, at the rate of ten and three-fourths per cent, for income years commencing on or after January 1, 1997, and prior to January 1, 1998, at the rate of ten and one-half per cent, for income years commencing on or after January 1, 1998, and prior to January 1, 1999, at the rate of nine and one-half per cent, for income years commencing on or after January 1, 1999, and prior to January 1, 2000, at the rate of eight and one-half per cent, and for income years commencing on or after January 1, 2000, at the rate of seven and one-half per cent. The exemption of companies described in subparagraphs (G) and (H) of subdivision (2) of this subsection shall not be allowed with respect to any income year of any such company commencing on or after January 1, 1998, and any such company claiming such exemption for any income years commencing on or after January 1, 1985, but prior to January 1, 1998, shall be required to file a corporation business tax return in accordance with section 12-222 for each such income year.
(2) The following companies shall be exempt from the tax imposed under this chapter: (A) Insurance companies incorporated or organized under the laws of any other state or foreign government and for income years commencing on or after January 1, 1999, domestic insurance companies; (B) companies exempt by the federal corporation net income tax law, and any company which qualifies as a domestic international sales corporation (DISC), as defined in Section 992 of the Internal Revenue Code and as to which a valid election under subsection (b) of said Section 992 to be treated as a DISC is effective, but excluding companies, other than any company which so qualifies as, and so elects to be treated as, a DISC, which elect not to be subject to such tax under any provision of said Internal Revenue Code other than said subsection (b) of Section 992; (C) companies subject to gross earnings taxes under chapter 210; (D) companies all of whose properties in this state are operated by companies subject to gross earnings taxes under chapter 210; (E) cooperative housing corporations, as defined for federal income tax purposes; (F) any organization or association of two or more persons established and operated for the exclusive purpose of promoting the success or defeat of any candidate for public office or of any political party or question or constitutional amendment to be voted upon at any state or national election or for any other political purpose; (G) any company which is not owned or controlled, directly or indirectly, by any other company, the gross annual revenues of which in the most recently completed year did not exceed one hundred million dollars and which engaged in the research, design, manufacture, sale or installation of alternative energy systems or motor vehicles powered in whole or in part by electricity, natural gas or solar energy including their parts and components, provided at least seventy-five per cent of the gross annual revenues of such company are derived from such research, design, manufacture, sale or installation; (H) any company which engages in the research, design, manufacture or sale in Connecticut of aero-derived gas turbine systems in advanced industrial applications, which applications are developed after October 1, 1992, which are limited to simple-cycle systems, humid air, steam or water injection, recuperation or intercooling technologies, including their parts and components, to the extent that such company's net income is directly attributable to such purposes; (I) any non-United States corporation, which shall be any foreign corporation, as defined in Section 7701(a)(5) of the Internal Revenue Code, whose sole activity in this state during the income year consists of the trading in stocks, securities or commodities for such corporation's own account, as defined in Section 864(b)(2)(A)(ii) of said Internal Revenue Code; and (J) for income years commencing on or after January 1, 2001, S corporations.
(3) (A) A company is carrying on or doing business in this state if it is a general partner of a partnership that does business, owns or leases property or maintains an office in this state. (B) A company is carrying on or doing business in this state if it is a limited partner of a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office in this state. (C) A company that is not otherwise carrying on or doing business in this state, either directly or by virtue of being a partner in a partnership described in subparagraph (A) or (B) of this subdivision is not carrying on or doing business in this state solely by virtue of being a limited partner of one or more investment partnerships.
(b) (1) With respect to income years commencing on or after January 1, 1989, and prior to January 1, 1992, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, an additional tax in an amount equal to twenty per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.
(2) With respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, an additional tax in an amount equal to ten per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.
(1949 Rev., S. 1897; 1951, 1953, June, 1955, S. 1089d; 1957, P.A. 515, S. 1; 649, S. 1; 1959, P.A. 394, S. 1; 510; 1961, P.A. 604, S. 2; February, 1965, P.A. 147; 461, S. 7; 1969, P.A. 674; June, 1969, P.A. 1, S. 13; 1971, P.A. 683, S. 1; June, 1971, P.A. 5, S. 111; 1972, P.A. 271, S. 1; 285, S. 6; P.A. 73-350, S. 6, 27; 73-442, S. 4; P.A. 75-101, S. 1, 2; 75-213, S. 1, 53; P.A. 77-476, S. 1, 3; 77-499, S. 1, 2; P.A. 80-406, S. 4, 5; 80-483, S. 54, 186; P.A. 81-472, S. 15, 159; June Sp. Sess. P.A. 83-1, S. 1, 15; P.A. 85-431, S. 1, 2; 85-474, S. 1, 2; P.A. 88-222, S. 1, 2; P.A. 89-16, S. 1, 31; 89-211, S. 22; 89-251, S. 20, 203; P.A. 90-28, S. 1; June Sp. Sess. P.A. 91-3, S. 99, 168; P.A. 92-152, S. 1; P.A. 93-74, S. 5, 67; 93-199, S. 4, 6; P.A. 94-4, S. 1, 2; May 25 Sp. Sess. P.A. 94-1, S. 45, 130; P.A. 95-160, S. 32, 69; P.A. 96-139, S. 12, 13; 96-197, S. 3, 11; P.A. 98-110, S. 13, 27; 98-244, S. 6, 35; June Sp. Sess. P.A. 98-1, S. 106, 121.)
History: 1959 acts changed technical language of statute, added exclusion in subsection (2) for companies which elect not to be subject to such tax, applied 3 3/4 per cent rate to net income received in each year as opposed to only those years between 1953 and 1958; 1961 act added reference to chapter 212a, changed tax rate to 5 per cent and changed technical language of statute; 1965 acts added Subdiv. (5) excepting nonprofit cooperative ownership housing corporations when residence is restricted to corporation members and corporation ownership is restricted to residents from payment of tax and restricted five per cent tax rates to years beginning before January 1, 1966, and increased rates for years thereafter to five and one-quarter per cent; 1969 acts specified stock and nonstock corporations in Subdiv. (5) and added Subdiv. (6) excepting cooperative housing corporations where there is no taxable income to corporation from payment of tax, added new Subdivs. (4) and (5) detailing companies formerly mentioned by chapter reference only in Subdiv. (3) and renumbering remaining Subdivs. accordingly, specified companies "not subject to the tax imposed by this part" in Subdiv. (6), formerly (4), changed tax rates in Subdiv. (7), formerly (5), to five and one-quarter per cent for years beginning after January 1, 1971, and, in the case of companies other than telephone companies, made five and one-fourth per cent rate applicable to years before January 1, 1969, and set rate for period between that date and January 1, 1971, at eight per cent; 1971 acts deleted proviso that minimum tax shall not be less than minimum tax under Sec. 12-219, substituted "additional" for "minimum" re tax under Sec. 12-219, deleted Subdiv. (5), renumbering following Subdivs. accordingly, and changed references to 1971 to 1973; 1972 acts included DISC companies in Subdiv. (2), changed tax rates in Subdiv. (7) to eight per cent without exception and deleted provisions concerning tax on telephone companies; P.A. 73-350 rewrote Subdiv. (1) to apply to insurance companies for years before January 1, 1973, and to insurance companies incorporated or organized under laws of other state or foreign company on or after that date, deleted Subdiv. (4) renumbering subsequent Subdivs. accordingly and added proviso that tax rate as of January 1, 1974, applicable to companies subject to tax under provisions of section will be two per cent, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 73-442 included foreign municipal electric utilities under provisions of section and specifically excluded such utilities in Subdiv. (2) of exception; P.A. 75-101 added new Subdiv. (7) exempting organizations promoting success or defeat of political candidates, parties, questions, constitutional amendments etc. from payment of tax, effective May 12, 1975, and applicable to income years commencing on or after January 1, 1973; P.A. 75-213 changed eight per cent rate to ten per cent for income years beginning on or after January 1, 1975; P.A. 77-476 deleted references to foreign municipal electric utilities; P.A. 77-499 required payment for owning or leasing property in state in corporate capacity or as unincorporated association taxable for federal income tax purposes or for maintaining an office in state; P.A. 80-406 added Subdiv. (8) exempting certain companies engaged in research, design, manufacture, sale or installation of alternative energy systems from payment of tax until July 1, 1985; P.A. 80-483 deleted reference to building and loan associations; P.A. 81-472 made technical changes; June Sp. Sess. P.A. 83-1 increased the rate of tax from ten per cent to eleven and one-half per cent, effective July 1, 1983, and applicable to income years of corporations commencing on or after January 1, 1983; P.A. 85- 431 added provision allowing for retroactive exemption to date of incorporation for certain nonprofit corporations; P.A. 85-474 provided that exemption under Subdiv. (8) for alternative energy system companies shall not be allowed with respect to any income year commencing on or after January 1, 1988, instead of after July 1, 1985; P.A. 88-222 expanded the corporate tax exemption of Subdiv. (8) to include any company which is not owned or controlled, directly or indirectly, by any other company and extended the exemption until January 1, 1993, effective May 28, 1988, and applicable to income years of corporations commencing on or after January 1, 1988; P.A. 89-16 added Subsec. (b) imposing an additional tax as a percentage of the tax under Subsec. (a), effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89- 251 amended Subsec. (b) by increasing the additional tax imposed under Sec. 1 of P.A. 89-16 from fifteen to twenty per cent of the tax calculated under Subsec. (a), effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-28 made technical changes in the list of corporations in Subsec. (a) not subject to tax; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to provide that the twenty per cent additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a ten per cent additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 92-152 amended Subsec. (a) by adding a new Subdiv. (8) exempting corporation engaged in the research, design, manufacture or sale of aero-derived gas turbine systems and extended the exemptions for Subdivs. (7) and (8) until January 1, 1998; P.A. 93-74 added provisions reducing tax rates commencing on and after January 1, 1995, effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1995; P.A. 93-199 expanded exemption in Subdiv. (7) to include companies engaged in research, design, manufacture, sale or installation of motor vehicles powered by electricity, natural gas or solar energy, effective July 1, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A. 94-4 in Subdiv. (5) of Subsec. (a) eliminated provision requiring cooperative housing corporations to have no taxable income, effective April 7, 1994, and applicable for income years commencing on or after January 1, 1990; May Sp. Sess. P.A. 94-1 amended Subsec. (a) to conform section with revisions made in Sec. 5 of P.A. 93-74, effective April 7, 1994; P.A. 95-160 amended Subsec. (a) to decrease tax rate from eleven per cent to ten and three-fourths per cent for the income years commencing on or after January 1, 1996, and prior to January 1, 1997, nine and one-half per cent for the income years commencing on or after January 1, 1998, and prior to January 1, 1999, eight and one-half per cent for the income years commencing on or after January 1, 1999, and prior to January 1, 2000, and seven and one-half per cent for income years commencing on or after January 1, 2000, effective June 1, 1995; P.A. 96-139 amended effective date of P.A. 95-160 to clarify applicability to income years commencing on or after January 1, 1996; P.A. 96-197 amended Subsec. (a) to reorganize provisions and added Subdiv. (3) re general partners of a partnership and made other technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 amended Subsec. (a)(2) to exempt domestic insurance companies and make technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 98-244 amended Subsec. (a)(2) to exempt S corporations from the minimum tax under Sec. 12-219 for income years commencing on or after January 1, 2001, and to exempt foreign-sourced income of non-United-States corporations from the corporation business tax, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; June Sp. Sess. P.A. 98-1 amended Subsec. (a)(2) to add commodities, effective June 24, 1998.
See chapter 138c re tax credits for donations to Rental Housing Assistance Trust Fund.
See Sec. 12-247 re reduction of tax where business carried on for less than twelve months.
See Sec. 12-264 re tax on gross earnings of utility companies.
Cited. 127 C. 508; 129 C. 664; 130 C. 461. Constitutionality not passed upon until Connecticut court determines extent of applicability of tax to corporation solely in interstate business. 323 U. S. 104. Is an excise upon franchise of corporation for privilege of doing business in the state. 135 C. 37. Cited. 142 C. 483; 151 C. 688. Cited. 178 C. 243, 245, 247. Cited. 196 C. 1, 3. Cited. 202 C. 412, 415. Cited. Id., 583, 594. Cited. 203 C. 198−201. Cited. 220 C. 665, 666, 669, 676, 678− 681. Cited. 224 C. 426, 429, 432−434. Section is tax imposition statute; any ambiguity must be resolved in favor of taxpayer. 228 C. 137−139, 141, 143, 144.
Cited. 26 CS 277; Id., 373, 374. Cited. 40 CS 77, 81, 82, 85. Cited. 43 CS 314, 322. Cited. 44 CS 90, 100.
Subsec. (a):
Cited. 228 C. 139, 142. Cited. 232 C. 325, 330.

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Secs. 12-214a and 12-215. Effective date of subsection (7) of section 12-214. Certain gross rentals to be tax-exempt. Sections 12-214a and 12-215 are repealed.
(1955, S. 1090d; 1957, P.A. 515, S. 2; P.A. 75-101, S. 2; P.A. 82-472, S. 182, 183.)

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Sec. 12-216. Payment of tax by out-of-state corporations. The tax imposed by this part upon corporations or associations carrying on or doing business or having the right to carry on or do business in this state, which corporations or associations are organized and exist under and by virtue of the laws of some other state, territory or country or are organized and exist without any specific statutory authority, shall be paid by such corporations or associations for the benefit and protection of the government and laws of this state, it being the purpose of this section to require the payment of a tax by all corporations or associations carrying on or doing business in this state, but not organized under the laws of this state, as an additional recompense for protection of the activities in this state of such corporations or associations.
(1951, S. 1091d; P.A. 73-442, S. 5; P.A. 77-476, S. 2, 3.)
History: P.A. 73-442 defined "foreign municipal electric utility" and included such utilities in corporations organized under the law of any other state or country; P.A. 77-476 deleted amendments enacted in 1973 act.

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Sec. 12-217. Deductions from gross income. Net income of S corporations. Regulations. (a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, and (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax- exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land.
(2) No deduction shall be allowed for (A) expenses related to dividends which are allowable as a deduction or credit under the Internal Revenue Code and (B) federal taxes on income or profits, losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, interest received from federal, state and local government securities, if any such deductions are allowed by the federal government.
(3) Notwithstanding any provision of this section to the contrary, no dividend received from a real estate investment trust shall be deductible under this section by the recipient unless the dividend is: (A) Deductible under Section 243 of the Internal Revenue Code; or (B) received by a qualified dividend recipient from a qualified real estate investment trust and, as of the last day of the period for which such dividend is paid, persons, not including the qualified dividend recipient or any person that is either a related person to, or an employee or director of, the qualified dividend recipient, have outstanding cash capital contributions to the qualified real estate investment trust that, in the aggregate, exceed five per cent of the fair market value of the aggregate real estate assets, valued as of the last day of the period for which such dividend is paid, then held by the qualified real estate investment trust. For purposes of this section, a "related person" is as defined in subdivision (7) of subsection (a) of section 12-217m, "real estate assets" is as defined in Section 856 of the Internal Revenue Code, a "qualified dividend recipient" means a dividend recipient who has invested in a qualified real estate investment trust prior to April 1, 1997, and a "qualified real estate investment trust" means an entity that both was incorporated and had contributed to it a minimum of five hundred million dollars worth of real estate assets prior to April 1, 1997, and that elects to be a real estate investment trust under Section 856 of the Internal Revenue Code prior to April 1, 1998.
(4) Notwithstanding anything in this section to the contrary, (A) any excess of the deductions provided in this section for any income year commencing on or after January 1, 1973, over the gross income for such year or the amount of such excess apportioned to this state under the provisions of section 12-218, shall be an operating loss of such income year and shall be deductible as an operating loss carry-over for operating losses incurred prior to income years commencing January 1, 2000, in each of the five income years following such loss year, and for operating losses incurred in income years commencing on or after January 1, 2000, in each of the twenty income years following such loss year, provided the portion of such operating loss which may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of (i) any net income greater than zero of such income year following such loss year, or in the case of a company entitled to apportion its net income under the provisions of section 12-218, the amount of such net income which is apportioned to this state pursuant thereto, or (ii) the excess, if any, of such operating loss over the total of such net income for each of any prior income years following such loss year, such net income of each of such prior income years following such loss year for such purposes being computed without regard to any operating loss carry-over from such loss year allowed by this subparagraph and being regarded as not less than zero, and provided, further, the operating loss of any income year shall be deducted in any subsequent year, to the extent available therefor, before the operating loss of any subsequent income year is deducted, and (B) any net capital loss, as defined in the Internal Revenue Code effective and in force on the last day of the income year, for any income year commencing on or after January 1, 1973, shall be allowed as a capital loss carry-over to reduce, but not below zero, any net capital gain, as so defined, in each of the five following income years, in order of sequence, to the extent not exhausted by the net capital gain of any of the preceding of such five following income years, and (C) any net capital losses allowed and carried forward from prior years to income years beginning on or after January 1, 1973, for federal income tax purposes by companies entitled to a deduction for dividends paid under the Internal Revenue Code other than companies subject to the gross earnings taxes imposed under chapters 211 and 212, shall be allowed as a capital loss carry-over.
(5) This section shall not apply to a life insurance company as defined in the Internal Revenue Code effective and in force on the last day of the income year. For purposes of this section, the unpaid loss reserve adjustment required for nonlife insurance companies under the provisions of Section 832(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall be applied without making the adjustment in Subparagraph (B) of said Section 832(b)(5).
(b) (1) For purposes of determining net income under this section, the deduction allowed for depreciation in the determination of net income for purposes of the federal income tax shall, for the income year of any company commencing in 1981, 1982, 1983, 1984 or 1985, not exceed as a percentage of the total amount of such deduction allowed for federal income tax purposes, ninety-six per cent for the income year commencing in 1981, ninety-one per cent for the income year commencing in 1982, eighty-four per cent for the income year commencing in 1983, seventy-seven per cent for the income year commencing in 1984, and eighty-eight per cent for income years commencing in 1985, provided the portion of such depreciation allowed for federal income tax purposes but not allowed with respect to any of such income years in determining net income under this section, shall be allowed as a deduction in determining net income under this section, in equal amounts with each of such amounts computed as one-fifth of the total of such depreciation not allowed for such income year, with respect to each of the five successive income years of such company commencing with the third income year immediately following the income year in which such depreciation is not allowed. (2) Alternatively, for purposes of determining net income under this section, any company qualified to claim deduction for depreciation as described in subdivision (1) of this subsection for the income year commencing in 1981, 1982, 1983, 1984 or 1985, may elect, in lieu of the procedure under said subdivision (1), to depreciate property placed in service on or after January 1, 1981, in accordance with provisions of the federal corporation net income tax law applicable to depreciable property placed in service immediately prior to January 1, 1981, and such depreciation so determined for any of such years shall be allowed as a deduction in determining net income under this section for such income year, provided the Commissioner of Revenue Services may refuse to allow any such deduction submitted in accordance with this subdivision if the information in substantiation of such deduction is deemed unsatisfactory by said commissioner in relation to generally accepted accounting procedures.
(c) (1) Notwithstanding the provisions of subsections (a) and (b) of this section, "net income", in the case of an S corporation, means the percentage of the nonseparately computed income or loss, as defined in Section 1366(a)(2) of the Internal Revenue Code, of such S corporation, without separate state adjustment pursuant to section 12-233 or 12-226a for the compensation of any officer or employee, to which shall be added (A) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and (B) any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year as provided in subdivision (2) of this subsection.
(2) For income years commencing prior to January 1, 1997, "net income" means one hundred per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1997, and prior to January 1, 1998, "net income" means ninety per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1998, and prior to January 1, 1999, "net income" means seventy-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1999, and prior to January 1, 2000, "net income" means fifty-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2000, and prior to January 1, 2001, "net income" means thirty per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2001, net income of S corporations as computed under subdivision (1) of this subsection shall not be subject to the tax under this chapter. Any S corporation subject to the tax on net income as provided in this section shall be eligible for any credit against the tax otherwise available to taxpayers under this chapter only to the extent and in the same percentage as net income of such S corporation is subject to taxation under this chapter, except that any S corporation with an income year commencing on or after January 1, 1999, but before December 31, 2000, shall be eligible for the entire credit available under sections 8-395, 12-633, 12-634, 12-635 and 12-635a.
(d) The commissioner may adopt regulations in accordance with chapter 54, relating to mergers or consolidations of corporations providing for the deduction, by the surviving or new corporation provided for in the plan of consolidation, of operating losses that were incurred by a merging or consolidating corporation, respectively, before the merger or consolidation, respectively. Such regulations may follow the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or the regulations thereunder.
(1949 Rev., S. 1898; 1949, S. 1093d; 1957, P.A. 560, S. 8; 1961, P.A. 428, S. 2; 1963, P.A. 651, S. 1; 1971, P.A. 461; June, 1971, P.A. 8, S. 28; 1972, P.A. 285, S. 12; P.A. 73-350, S. 8, 27; P.A. 77-16, S. 1, 2; 77-550, S. 1, 2; P.A. 80-483, S. 55, 186; P.A. 81-66, S. 1, 5; 81-245, S. 2, 4; 81-411, S. 1, 42; Nov. Sp. Sess. P.A. 81-7, S. 1, 3; P.A. 85-159, S. 1, 19; 85-469, S. 4, 6; P.A. 89-211, S. 23; 89-251, S. 22, 203; June Sp. Sess. P.A. 91-3, S. 100, 168; P.A. 93-74, S. 6, 67; 93- 332, S. 9, 12, 42; 93-435, S. 64, 95; P.A. 96-175, S. 1, 5; 96-197, S. 4, 11; P.A. 97-119, S. 1, 2; 97-283, S. 1, 2; P.A. 99- 83, S. 1, 2; 99-173, S. 39, 65; 99-235, S. 5, 7; P.A. 00-170, S. 24, 42.)
History: 1961 act added subdivision (2); 1963 act extended exception in subdivision (2) to all taxpayers for year 1963 and thereafter; 1971 acts added provisions applicable to taxpayers whose income reported in consolidated return and changed two and one-half per cent rate to sixty per cent for banking institutions beginning in 1971 income year, deleting obsolete reference to January 1, 1962; 1972 act deleted mutual banks and trust companies in Subdiv. (2), included building and loan associations and increased sixty per cent interest by ten per cent each year beginning in 1973 until 100 per cent level reached; P.A. 73-350 changed five per cent rate for other taxpayers to ninety per cent in 1973 and 100 per cent thereafter, added provisions re operating losses and net capital losses, added phrase re taxpayers who file as part of consolidated return with federal government but not with the state and added provision clarifying applicability of provisions to life insurance companies; P.A. 77-16 added provisions specially applicable to regulated investment companies, effective March 29, 1977, and applicable to income years commencing on and after January 1, 1977; P.A. 77-550 added provisions calling for consideration of excess of deductions allocated and apportioned to state under Sec. 12-218 as operating loss; P.A. 80-483 made technical changes; P.A. 81-66 eliminated Connecticut corporation business tax paid in the income year as a deduction from gross income in determining taxable income under said tax, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-245 added a deduction for the gross income attributable to an international banking facility, provided no expense or loss attributable to such facility shall be a deduction, effective upon adoption by the Board of Governors of the Federal Reserve System of amendments to Regulations D and Q pertaining to international banking facilities (adopted June 9, 1981, with an effective date of December 3, 1981); P.A. 81-411 allowed dividends received to be deducted from gross income and provided that net income be apportioned only, eliminating references to allocation, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; Nov. Sp. Sess. P.A. 81-7 amended section to permit deductions for depreciation, adding Subpara. (2) of Subdiv. (1) in previously existing provisions designated as Subsec. (a) and Subsec. (b) detailing such deductions, effective January 27, 1982, and applicable to corporations' income years commencing on or after January 1, 1981; P.A. 85-159 provided for a depreciation deduction for income years commencing in 1985 of eighty-eight per cent of the amount of the deduction allowed for federal income tax purposes; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89-251 amended Subsec. (a) by adding to the list of items deductible from gross income in determining net income under the federal income tax which may not be so deducted for purposes of the Connecticut tax on net income of corporations, the following: Taxes in any state or political subdivision thereof imposed on or measured by the income or profits of a corporation, effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to provide for the nondeductibility of thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation and added Subsec. (c) concerning net income of S corporations, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 specified that with respect to nonlife insurance companies the unpaid loss reserve adjustment shall not be made, effective May 19, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A. 93-332 made technical change in language added in Sec. 6 of P.A. 93-74 to specify that with respect to nonlife insurance companies the unpaid loss reserve adjustment shall not be made and amended Subsec. (c) to prohibit any separate state adjustment to the net income of an S corporation with respect to the compensation of any officer or employee, effective June 25, 1993, and applicable to taxable years on or after January 1, 1993; P.A. 93-435 made a technical change in Subsec. (a), effective June 28, 1993; P.A. 96-175 amended Subsec. (c) by adding Subdiv. (2) re phase-out of net income, effective May 31, 1996, and applicable to income years commencing on or after January 1, 1997; P.A. 96-197 added Subsec. (d) to permit commissioner to adopt regulations relating to mergers and consolidations, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 97-119 amended Subsec. (a) by adding new Subdiv. (3) re real estate investment trusts and made technical and renumbering changes, effective June 6, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 97-283 amended Subsec. (c) to make any S corporation subject to tax on net income eligible for credits against tax in the same percentage as net income subject to tax under chapter, effective June 26, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 99-83 amended Subsec. (c) to add exception for S corporations with income year commencing on or after January 1, 1999, but prior to December 31, 2000, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 99-173 amended Subsec. (a) to extend the net operating loss carry forward provision from five to twenty years applicable to losses incurred on or after January 1, 2000, and provide a deduction for gains realized from sale of open space land, effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 99-235 amended Subsec. (a)(1)(E) to replace "watershed" with "water company", effective June 29, 1999; P.A. 00-170 amended Subsec. (c) to allow S corporations to be eligible for credits under section 8-395 for income years commencing on and after January 1, 1999, but before December 31, 2000, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000.
Statute should be construed so as to avoid double taxation. 122 C. 553. Under former exception, rent received from subtenants may not be deducted from gross rent to determine rent paid. 127 C. 507. Taxes paid by lessee under terms of lease on property leased held within former exception and not deductible; payment made for "other services" under agreement by which corporation rented machines could not be treated as rent. 129 C. 663−669. "Items deductible under federal corporation net income tax law" do not include "credits" of sums taxable under federal law; federal excise profits net income not deductible in determining income subject to state business tax. 130 C. 460. Cited. 135 C. 57. Incorporation of federal law by reference into state law is not a delegation of legislative power. 142 C. 483. Cited. 178 C. 243, 245; 179 C. 363, 365, 366. Cited. 196 C. 1, 4, 7−9. Implications of a taxpayer's federal election on his privilege to claim deductions under state statutes discussed. 199 C. 346, 349−353. Cited. 203 C. 198, 205. "... does not authorize surviving corporation to deduct operating loss carry-overs of the merged or consolidated corporations ..." 203 C. 455−458, 460−465. Cited. 213 C. 220, 226, 228, 230−232. Cited. Id., 442, 444. Cited. 220 C. 665, 675, 677, 678. Cited. 235 C. 865, 873, 879.
Cited. 2 CA 660−662.
Cited. 40 CS 77, 78, 80, 83. Cited. 43 CS 260, 264−268, 277. Cited. 44 CS 90, 100. Cited. Id., 377. Surviving corporation may deduct an operating loss carry over of a merged or consolidated corporation if "continuity of business test" is met. 45 CS 202.
Subsec. (a):
Cited. 199 C. 346, 350, 352, 353. Subdiv. (D)(1) cited. 213 C. 220, 222, 225−227, 230, 232. Where election made to take federal tax credit, wages at issue in case are no longer "items deductible under federal corporation net income tax" for purposes of this section. Id., 442, 444, 445. Subdiv. (A) cited. 235 C. 865−872, 874, 875, 880. Subdiv. (D)(1) cited. Id., 865, 873; 236 C. 156, 157, 162, 164, 166, 167, 174, 176. Subdiv. (A) cited. Id., 156, 160, 161, 164, 167. Subdiv. (D) cited. Id., 156, 162.

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Secs. 12-217a and 12-217b. Deduction for investment in depreciable property. Tax credit for expenditures for water pollution abatement facilities. Sections 12- 217a and 12-217b are repealed.
(1963, P.A. 4; February, 1965, P.A. 8, S. 1; 1967, P.A. 57, S. 29; 1969, P.A. 291, S. 2; P.A. 82-472, S. 182, 183.)

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Secs. 12-217c and 12-217d. Tax credit for expenditures for: Air pollution abatement facilities; industrial waste treatment facilities. Sections 12-217c and 12- 217d are repealed, effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998.
(1967, P.A. 754, S. 21; 1969, P.A. 291, S. 1; 758, S. 15; 1971, P.A. 872, S. 32, 145; P.A. 97-295, S. 24, 25; P.A. 98- 262, S. 14, 22.)

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Sec. 12-217e. Tax credits for certain manufacturing and service facilities as provided under sections 32-9p and 32-9r. (a) There shall be allowed as a credit against the tax imposed by this chapter an amount equal to twenty-five per cent of that portion of such tax which is allocable to any manufacturing facility, provided, for any such facility which is located in an enterprise zone designated pursuant to section 32-70 or in a municipality with an entertainment district designated under section 32-76 or established under section 2 of public act 93-311* and which became eligible as a manufacturing facility after the designation of such zone and for which not less than one hundred fifty full-time employees or thirty per cent of the full-time employment positions directly attributable to the manufacturing facility were, during the last quarter of the income year of the taxpayer, held by employees of the taxpayer who at the time of employment were (1) residents of such zone, or (2) residents of such municipality and eligible for training under the Federal Comprehensive Employment Training Act or any other training program that may replace the Comprehensive Employment Training Act, a credit of fifty per cent shall be allowed. A position is directly attributable to the manufacturing facility if: (A) The work is performed or the base of operations is at the facility; (B) the position did not exist prior to the construction, renovation, expansion or acquisition of the facility; and (C) but for the construction, renovation, expansion or acquisition of the facility, the position would not have existed, provided nothing in this section shall preclude a position from being considered directly attributable to a manufacturing facility if such position formerly existed in an eligible manufacturing facility in the same municipality under section 32-9p.
(b) There shall be allowed as a credit against the tax imposed by this chapter an amount equal to the following percentage of that portion of such tax which is allocable to any service facility: (1) Fifteen per cent, if there are three hundred or more but not more than five hundred ninety-nine new employees working at such facility; (2) twenty per cent if there are six hundred or more but not more than eight hundred ninety-nine new employees working at such facility; (3) twenty-five per cent, if there are nine hundred or more but not more than one thousand one hundred ninety-nine new employees working at such facility; (4) thirty per cent if there are one thousand two hundred or more but not more than one thousand four hundred ninety-nine new employees working at such facility; (5) forty per cent, if there are one thousand five hundred or more but not more than one thousand nine hundred ninety-nine new employees working at such facility; or (6) fifty per cent if there are two thousand or more new employees working at such facility. As used in this subsection: (A) "New employee" means a person hired by a taxpayer to fill a position for a new job or a person shifted from an existing location of the taxpayer outside this state to a service facility in this state, provided (i) in no case shall the total number of new employees allowed for purposes of this credit exceed the total increase in the taxpayer's employment in this state, which increase shall be the difference between (I) the number of employees employed by the taxpayer in this state at the time of application to the Commissioner of Revenue Services for such credit plus the number of new employees who would be eligible for inclusion under the credit allowed under this subsection without regard to this calculation, and (II) the highest number of employees employed by the taxpayer in this state in the year preceding the taxpayer's application to the Commissioner of Revenue Services for such credit, and (ii) a person shall be deemed to be a "new employee" only if such person's duties in connection with the operation of the facility are on a regular, full-time or equivalent or full-time and permanent basis; and (B) "new job" means a job that did not exist in the business of a taxpayer in this state prior to the taxpayer's application to the Commissioner of Revenue Services for such credit and that is filled by a new employee, but does not include a job created when an employee is shifted from an existing location of the taxpayer in this state to a service facility.
(c) The portion of such tax which is allocable to such a manufacturing facility or service facility shall be determined by multiplying such tax by a fraction computed as the simple arithmetical mean of the following fractions: First, a fraction the numerator of which is the average monthly net book value in the income year of the manufacturing facility or service facility and machinery and equipment acquired for and installed in the manufacturing facility or service facility, without deduction on account of any encumbrance thereon, or if rented to the taxpayer, the value of the manufacturing facility or service facility and machinery and equipment acquired for and installed in the manufacturing facility or service facility, computed by multiplying the gross rents payable by the taxpayer for the manufacturing facility or service facility and such machinery and equipment during the income year or period by eight, and the denominator of which is the sum of the average monthly net book value of all real property and machinery and equipment held and owned by the taxpayer in the state, without deduction on account of any encumbrance thereon and the value of all real property and machinery and equipment rented to the taxpayer in the state, computed by multiplying the gross rents payable during the income year by eight; and second, a fraction the numerator of which is all wages, salaries and other compensation paid during the income year to employees of the taxpayer whose positions are directly attributable to the manufacturing facility or service facility and the denominator of which is the wages, salaries and other compensation paid during the income year to all employees of the taxpayer in the state. An employee's position is directly so attributable if (1) the employee's service is performed or his base of operations is at the manufacturing facility or service facility, (2) the position did not exist prior to the construction, renovation, expansion or acquisition of the manufacturing facility or service facility, and (3) but for the construction, renovation, expansion or acquisition of the manufacturing facility or service facility the position would not have existed. For the purposes of this subsection, "gross rents" means gross rents as defined in section 12-218.
(d) The credit allowed by this section may be claimed only by the initial occupant or occupants of the manufacturing facility or service facility. The owner of the manufacturing facility or service facility may not claim the credit unless the owner is also an occupant. The credit may first be claimed on the tax return for the taxpayer's income year which begins during the calendar year next succeeding the calendar year in which the taxpayer was issued an eligibility certificate, and may be claimed in each of the following nine income years. If within such period, however, any facility for which an eligibility certificate has been issued ceases to qualify as a manufacturing facility or service facility or any occupant of a manufacturing facility or service facility ceases to be an occupant, the entitlement to the credit allowed by this section shall terminate in the income year in which the qualification or occupancy ceases, and there shall not be a pro rata application of the credit to such income year.
(e) Any subsequent occupant or occupants of a manufacturing facility or service facility for which an eligibility certificate has been issued may claim the credit allowed by this section in accordance with subsection (c) of this section but only after obtaining a new eligibility certificate with respect to the manufacturing facility or service facility being occupied in the manner provided in section 32-9r.
(f) Any taxpayer claiming the credit allowed by this section shall submit to the Commissioner of Revenue Services a copy of the applicable eligibility certificate with his tax return in each income year for which a deduction is claimed.
(P.A. 78-303, S. 85, 136; 78-357, S. 7, 16; P.A. 81-445, S. 4, 11; P.A. 82-435, S. 3, 8; P.A. 83-381, S. 2; 83-587, S. 26, 96; P.A. 90-270, S. 23, 38; P.A. 93-311, S. 6, 8; P.A. 94-247, S. 5, 8; P.A. 96-239, S. 12, 17; P.A. 97-295, S. 14, 25; P.A. 98-262, S. 14, 22; P.A. 00-174, S. 22, 83.)
*Note: Section 2 of public act 93-311 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.
History: P.A. 78-303 allowed substitution of commissioner of revenue services for tax commissioner in accordance with provisions of P.A. 77-614; P.A. 81-445 included provisions allowing double credit for certain facilities in enterprise zones in Subsec. (a), effective July 1, 1982; P.A. 82-435 amended Subsec. (a) to provide that the thirty per cent determination for employees of facilities in enterprise zones will be made for the last quarter rather than the last day of the year and to provide that CETA eligible residents of the municipality, along with residents of the zone, will count toward the thirty per cent; P.A. 83-381 amended Subsec. (a) concerning the determination of eligibility for credit for facilities in enterprise zones; P.A. 83-587 made technical changes in Subsec. (b); P.A. 90-270 amended Subsec. (a) by making businesses employing more than one hundred fifty full-time employees eligible for the tax credit; P.A. 93-311 amended Subsec. (a) to extend eligibility for the tax credit to manufacturing facilities located in entertainment districts, effective July 1, 1993; P.A. 94-247 made facilities located in an entertainment district established pursuant to Sec. 2 of public act 93-311 eligible for the credit, effective June 9, 1994; P.A. 96-239 inserted new Subsec. (b) authorizing tax credit against certain percentages of the tax imposed by Ch. 208 which is allocable to a service facility, relettered former Subsecs. (b) to (e), inclusive, as Subsecs. (c) to (f), inclusive, respectively, and amended relettered Subsecs. (c), (d) and (e) by adding references to "service facility", effective July 1, 1996; P.A. 97-295 amended Subsec. (d) to reword provision re when credit may first be claimed, effective July 8, 1997, and applicable to tax returns filed for income years of corporations commencing on or after January 1, 1997; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 00-174 amended Subsec. (a) to add a provision allowing a position to be attributable to a manufacturing facility if it formerly existed in an eligible facility in the same municipality, effective May 26, 2000.
See Sec. 32-9p for definitions of "manufacturing facility" and "service facility".

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Sec. 12-217f. Tax credit for employers participating in certain state-approved programs combining high school study and part-time employment. Section 12-217f is repealed, effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998.
(P.A. 79-474, S. 1, 2; P.A. 97-295, S. 15, 24, 25; P.A. 98-262, S. 14, 22.)

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Sec. 12-217g. Tax credits for apprenticeship training in manufacturing, construction and plastics-related trades. (a) There shall be allowed a credit for any taxpayer against the tax imposed under this chapter for any income year with respect to each apprenticeship in the manufacturing trades commenced by such taxpayer in such year under a qualified apprenticeship training program as described in this section, certified in accordance with regulations adopted by the Labor Commissioner and registered with the Connecticut State Apprenticeship Council established under section 31-51b, in an amount equal to four dollars per hour multiplied by the total number of hours worked during the income year by apprentices in the first half of a two-year term of apprenticeship and the first three-quarters of a four-year term of apprenticeship, provided the amount of credit allowed for any income year with respect to each such apprenticeship may not exceed four thousand eight hundred dollars or fifty per cent of actual wages paid in such income year to an apprentice in the first half of a two-year term of apprenticeship or in the first three-quarters of a four-year term of apprenticeship, whichever is less.
(b) There shall be allowed a credit for any taxpayer against the tax imposed under this chapter for any income year with respect to each apprenticeship in plastics and plastics-related trades commenced by such taxpayer in such year under a qualified apprenticeship training program as described in this section, certified in accordance with regulations adopted by the Labor Commissioner and registered with the Connecticut State Apprenticeship Council established under section 31-51b, which apprenticeship exceeds the average number of such apprenticeships begun by such taxpayer during the five income years immediately preceding the income year with respect to which such credit is allowed, in an amount equal to four dollars per hour multiplied by the total number of hours worked during the income year by apprentices in the first half of a two- year term of apprenticeship and the first three-quarters of a four-year term of apprenticeship, provided the amount of credit allowed for any income year with respect to each such apprenticeship may not exceed four thousand eight hundred dollars or fifty per cent of actual wages paid in such income year to an apprentice in the first half of a two-year term of apprenticeship or in the first three-quarters of a four-year term of apprenticeship, whichever is less.
(c) There shall be allowed a credit for any taxpayer against the tax imposed under this chapter for any income year with respect to wages paid to apprentices in the construction trades by such taxpayer in such year that the apprentice and taxpayer participate in a qualified four-year apprenticeship training program, as described in this section, which (1) is jointly administered by labor and management trustees, (2) is administered pursuant to 29 USC Section 186(c), (3) is certified in accordance with regulations adopted by the Labor Commissioner and (4) is registered with the Connecticut State Apprenticeship Council established under section 31-51b. The tax credit shall be in an amount equal to two dollars per hour multiplied by the total number of hours worked during the income year by apprentices, provided the amount of credit allowed for any income year with respect to each such apprentice may not exceed one thousand dollars or fifty per cent of actual wages paid in such income year for such apprenticeship, whichever is less.
(d) For purposes of this section, a qualified apprenticeship training program shall require at least four thousand but not more than eight thousand hours of apprenticeship training for certification of such apprenticeship by the Connecticut State Apprenticeship Council. The amount of credit allowed any taxpayer under this section for any income year may not exceed the amount of tax due from such taxpayer under this chapter with respect to such income year.
(P.A. 79-475, S. 1, 2; May Sp. Sess. P.A. 94-4, S. 16, 85; P.A. 95-160, S. 64, 69; 95-284, S. 1, 2; P.A. 97-295, S. 16, 25; P.A. 98-262, S. 14, 22.)
History: P.A. 79-475 effective June 12, 1979, and applicable to income years ending on or after January 1, 1979; May Sp. Sess. P.A. 94-4 increased the credit amount from two dollars and fifty cents per hour to four dollars, increased the time period established for the program and increased the maximum total amount of the credit from three thousand dollars to four thousand eight hundred dollars, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1994; P.A. 95-160, revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 95-284 designated existing provisions as Subsecs. (a) and (c) and added Subsec. (b) re tax credits for apprenticeships in plastics and plastics-related trades, effective July 1, 1995, and applicable to income years of corporations commencing on or after January 1, 1995; P.A. 97-295 amended Subsec. (a) to change machine tool and metal trades to manufacturing trades and deleted provision re average number of apprenticeships in five preceding income years, revised method of calculating amount of credit in Subsecs. (a) and (b), added new Subsec. (c) re construction trades and redesignated existing Subsec. (c) as Subsec. (d), effective July 8, 1997, and applicable to tax returns filed for income years of corporations commencing on or after January 1, 1997; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section.

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Sec. 12-217h. Tax credit for expenditures to establish day care facilities for children of employees. Section 12-217h is repealed effective January 1, 1990, and applicable to income years of corporations commencing on or after that date.
(P.A. 81-100, S. 1, 2; P.A. 82-469, S. 9, 11; P.A. 83-453, S. 1, 4; P.A. 88-289, S. 1, 4; P.A. 89-364, S. 6, 7.)

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Sec. 12-217i. Tax credits for investments in vehicles powered by clean alternative fuels or electricity, for construction of or improvements to alternative fuel filling stations and for converting motor vehicles to utilize alternative fuels. (a) There shall be allowed a credit for any taxpayer against the tax imposed by this chapter, chapter 209, 210, 211 or 212 in any income year or calendar quarter, as the case may be, commencing prior to January 1, 2002, in an amount equal to ten per cent of the amount of expenditures paid or incurred during such income year or such quarter, as the case may be, for the incremental cost of purchasing a vehicle which is exclusively powered by a clean alternative fuel.
(b) There shall be allowed a credit for any taxpayer against the tax imposed by this chapter in any income year commencing on or after January 1, 1994, and prior to January 1, 2002, in an amount equal to fifty per cent of the amount of expenditures, other than those described in subsection (a) of this section, paid or incurred during such income year directly for (1) the construction of any filling station or improvements to any existing filling station in order to provide compressed natural gas, liquefied petroleum gas or liquefied natural gas; (2) the purchase and installation of conversion equipment incorporated into or used in converting vehicles powered by any other fuel to either exclusive use of clean alternative fuel or dual use of such other fuel and a clean alternative fuel, including, but not limited to, storage cylinders, cylinder brackets, regulated mixers, fill valves, pressure regulators, solenoid valves, fuel gauges, electronic ignitions and alternative fuel delivery lines, if such converted vehicles, after conversion, meet generally accepted standards, including, but not limited to, the standards set by the American Gas Association, the National Fire Protection Association, the American National Standards Institute, the American Society of Testing Materials or the American Society of Mechanical Engineers; or (3) the purchase and installation of equipment incorporated into or used in a compressed natural gas, liquefied petroleum gas or liquefied natural gas filling or electric recharging station for vehicles powered by a clean alternative fuel, including, but not limited to, compressors, storage cylinders, associated framing, tubing and fittings, valves and fuel poles and fuel delivery lines.
(c) If the amount of any credit provided in this section exceeds the amount of tax otherwise payable in the income year or calendar quarter, as the case may be, in which such expenditure was paid or incurred, the balance of any such credit remaining may be taken in any of the three succeeding income years or twelve succeeding calendar quarters, respectively. Any taxpayer allowed such a tax credit against the tax imposed under this chapter, chapter 209, 210, 211 or 212 shall not be allowed such credit under more than one of said chapters. As used in this section "clean alternative fuel" shall mean compressed natural gas, liquefied petroleum gas, liquefied natural gas or electricity when used as a motor vehicle fuel and "incremental cost" shall mean the difference between the purchase price of a vehicle which is exclusively powered by a clean alternative fuel and the manufacturer's suggested retail price of a comparably equipped vehicle which is not so powered.
(P.A. 91-179, S. 1, 5; P.A. 92-188, S. 1, 4; P.A. 93-199, S. 2, 6; P.A. 95-15, S 1, 3; P.A. 96-183, S. 1, 4; P.A. 97-295, S. 23, 25; P.A. 98-262, S. 14, 22; P.A. 99-173, S. 41, 65.)
History: P.A. 91-179 effective October 1, 1991, and applicable to income years commencing on or after January 1, 1991; P.A. 92-188 amended section to authorize tax credits for investments in vehicles powered by electricity, effective July 1, 1992, and applicable to income years of corporations commencing on or after January 1, 1992; P.A. 93-199 extended credit to any income year commencing prior to January 1, 1998, and added reference to electric recharging stations in Subdiv. (1), effective July 1, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A. 95-15 incorporated tax credits for expenditures for construction of or improvements to alternative fuel filling stations, formerly authorized under Sec. 12-217g and for expenditures for converting motor vehicles to utilize alternative fuels formerly authorized under Sec. 12-217r and made technical changes, effective April 13, 1995, and applicable to income years or calendar quarters commencing on or after January 1, 1994; P.A. 96-183 amended Subsec. (b) by adding liquefied petroleum gas and liquefied natural gas to Subdiv. (3) effective May 31, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 97-295 amended Subsec. (a) to extend date from January 1, 1998, to January 1, 2000, and amended Subsec. (b) to extend date from January 1, 1999, to January 1, 2000, effective July 8, 1997; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 99-173 amended Subsecs. (a) and (b) to extend the sunset from January 1, 2000, to January 1, 2002, effective June 23, 1999.

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Sec. 12-217j. Tax credit for research and experimental expenditures. There shall be allowed as a credit against the tax imposed on any corporation under this chapter, (1) with respect to income years of such corporation commencing on or after January 1, 1993, and prior to January 1, 1994, an amount equal to ten per cent of the amount spent by such corporation directly on research and experimental expenditures, as defined in Section 174 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, which are conducted in this state and which exceeds the amount spent by such corporation during the preceding taxable year of such corporation for such expenditures and (2) with respect to any taxable year of such corporation commencing on or after January 1, 1994, an amount equal to twenty per cent of the amount spent by such corporation on such expenditures which exceeds the amount spent by such corporation during the preceding taxable year of such corporation for such expenditures. A credit or any portion of a credit that is allowed under this section, with respect to any taxable year commencing on or after January 1, 2000, but is not used by a taxpayer because the amount of the credit exceeds the tax due and owing by the taxpayer shall be carried forward to each of the successive income years until such credit, or applicable portion of the credit, is fully taken. In no case shall a credit, or any portion of a credit, that is not used be carried forward for a period of more than fifteen years.
(P.A. 92-193, S. 3, 8; P.A. 93-403, S. 1, 3; P.A. 96-252, S. 7, 8; P.A. 98-110, S. 22, 27.)
History: P.A. 92-193 effective July 1, 1992, and applicable to taxable years of corporations commencing on or after January 1, 1993; the words "an amount" were inserted editorially by the Revisors in Subdiv. (1) after the words "January 1, 1994," for consistency with Subdiv. (2); P.A. 93-403 added requirement that research and experimental expenditures be conducted in the state, effective June 29, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 96-252 authorized tax credits which are not used by biotechnology companies to be carried forward and defined "biotechnology company", effective July 1, 1996, and applicable to income years of corporations commencing on or after January 1, 1997; P.A. 98-110 expanded credit to all taxpayers, effective May 19, 1998, and applicable to income years commencing on or after January 1, 2000.

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Sec. 12-217k. Tax credit for employee training. Section 12-217k is repealed, effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998.
(P.A. 92-193, S. 4, 8; P.A. 93-74, S. 7, 67; P.A. 97-295, S. 24, 25; P.A. 98-262, S. 14, 22.)

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Sec. 12-217l. Tax credit for expenditures for grants to institutions of higher education for research and development related to technological advancements. There shall be allowed as a credit against the tax imposed on any corporation under this chapter, with respect to any taxable year of such corporation commencing on or after January 1, 1994, an amount equal to twenty-five per cent of the amount spent by such corporation for any grant or combination of grants by such corporation to any institution of higher education in Connecticut for purposes of research and development related to advancements in technology which exceeds the average amount spent by such corporation during the three immediately preceding taxable years of such corporation for such grants.
(P.A. 92-193, S. 5, 8.)
History: P.A. 92-193 effective July 1, 1992, and applicable to taxable years of corporations commencing on or after January 1, 1994.

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Sec. 12-217m. Tax credit for taxpayers occupying new facilities and creating new jobs. Section 12-217m is repealed, effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998.
(P.A. 92-250, S. 1, 2; P.A. 95-79, S. 27, 189; 95-250, S. 1; P.A. 96-211, S. 1, 5, 6; P.A. 97-295, S. 17, 24, 25; P.A. 98- 262, S. 14, 22.)

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Sec. 12-217n. Rolling tax credit for research and development expenses. (a) There shall be allowed as a credit against the tax imposed by this chapter the amount determined under subsection (c) of this section in respect of the research and development expenses paid or incurred during any income year, subject to the limitations of this section.
(b) For purposes of this section:
(1) "Research and development expenses" means research or experimental expenditures deductible under Section 174 of the Internal Revenue Code of 1986, as in effect on May 28, 1993, determined without regard to Section 280C(c) thereof or any elections made by a taxpayer to amortize such expenses on its federal income tax return that were otherwise deductible, and basic research payments as defined under Section 41 of said Internal Revenue Code to the extent not deducted under said Section 174, provided: (A) Such expenditures and payments are paid or incurred for such research and experimentation and basic research conducted in this state; and (B) such expenditures and payments are not funded, within the meaning of Section 41(d)(4)(H) of said Internal Revenue Code, by any grant, contract, or otherwise by a person or governmental entity other than the taxpayer unless such other person is included in a combined return with the person paying or incurring such expenses;
(2) "Combined return" shall mean a combined corporation business tax return under section 12-223a;
(3) "Commissioner" means the Commissioner of Economic and Community Development;
(4) "Qualified small business" means a company that (A) has gross income for the previous income year that does not exceed one hundred million dollars, and (B) has not, in the determination of the commissioner, met the gross income test through transactions with a related person, as defined in section 12-217w.
(c) (1) The amount allowed as a credit in any income year shall be the tentative credit calculated under subdivision (2) of this subsection, modified as provided in subsection (e) or (f) of this section, if applicable, except that in the case of a qualified small business the tentative credit allowed for research and development expenses shall be equal to six per cent of such expenses or in the case of any business employing over two thousand five hundred people in the state of Connecticut with annual revenues in excess of three billion dollars and headquartered in an enterprise zone the tentative credit allowed for research and development expenses shall be equal to the greater of (A) the tentative credit calculated under subdivision (2), modified as provided in subsection (e) or (f) of this section, if applicable, or (B) three and one-half per cent of such expense.
(2) Where the research and development expenses paid or incurred in the income year equal: (A) Fifty million dollars or less, the tentative credit allowed shall be an amount equal to one per cent of such expenses; (B) more than fifty million dollars but not more than one hundred million dollars, the tentative credit allowed shall be equal to five hundred thousand dollars plus two per cent of the excess of such expenses over fifty million dollars; (C) more than one hundred million dollars but not more than two hundred million dollars, the tentative credit allowed shall be equal to one million five hundred thousand dollars plus four per cent of the excess of such expenses over one hundred million dollars; and (D) more than two hundred million dollars, the tentative credit allowed shall be equal to five million five hundred thousand dollars plus six per cent of the excess of such expenses over two hundred million dollars.
(d) (1) The credit provided for by this section shall be allowed for any income year commencing on or after January 1, 1993, provided any credits allowed for income years commencing on or after January 1, 1993, and prior to January 1, 1995, may not be taken until income years commencing on or after January 1, 1995, and, for the purposes of subdivision (2) of this subsection, shall be treated as if the credit for each such income year first became allowable in the first income year commencing on or after January 1, 1995.
(2) No more than one-third of the amount of the credit allowable for any income year may be included in the calculation of the amount of the credit that may be taken in that income year.
(3) The total amount of the credit under subdivision (1) of this subsection that may be taken for any income year may not exceed the greater of (A) fifty per cent of the taxpayer's tax liability or in the case of a combined return, fifty per cent of the combined tax liability, for such income year, determined without regard to any credits allowed under this section, and (B) the lesser of (i) two hundred per cent of the credit otherwise allowed under subsection (c) of this section for such income year, and (ii) ninety per cent of the taxpayer's tax liability or in the case of a combined return, ninety per cent of the combined liability for such income year, determined without regard to any credits allowed under this section.
(4) Credits that are allowed under this section but that exceed the amount permitted to be taken in an income year by reason of subdivision (1), (2) or (3) of this subsection, shall be carried forward to each of the successive income years until such credits, or applicable portion thereof, are fully taken. No credit permitted under this section shall be taken in any income year until the full amount of all allowable credits carried forward to such year from any prior income year, commencing with the earliest such prior year, that otherwise may be taken under subdivision (2) of this subsection in that income year, have been fully taken.
(e) In addition to the wage base test set forth in subsection (f) of this section, any aerospace company or in the case of a combined return, any combined group including an aerospace company, shall be subject to this subsection for any income year commencing on or after January 1, 1993, and prior to January 1, 1996. For purposes of this subsection, an aerospace company is any taxpayer, whether or not included in a combined return, engaged principally in the aerospace industry whose research and development expenses during each of the income years beginning on or after January 1, 1990, 1991 and 1992, respectively, exceeded two hundred million dollars. No aerospace company, or in the case of a combined return, a combined group including an aerospace company, shall be allowed any credit under this section for any income year to which this subsection applies in which the aggregate transfers by an aerospace company, if any, of historical economic base functions outside of this state, other than to a location outside the United States, since January 1, 1993, through the end of such income year, have materially reduced the historical economic base functions in this state. For purposes of this subsection, the historical economic base functions shall be those economic base functions conducted by an aerospace company, which need not be all economic base functions of the aerospace company, in this state on January 1, 1993, whose continuance in this state, as determined by the commissioner in his discretion, will further the policies set forth in section 32-221. Such historical economic base functions shall be set forth in a binding memorandum of understanding between the commissioner and an aerospace company that may be entered into at any time prior to the expiration of the first income year to which this subsection applies, with sufficient specificity to allow the commissioner and the aerospace company to determine in all income years subject to this subsection whether there has been such a reduction in said historical economic base functions. As a prerequisite to the allowance of any credit otherwise allowable under this section for any income year to which this subsection applies, each aerospace company shall obtain a certificate of eligibility issued by the commissioner to the aerospace company for such income year. The aerospace company shall within sixty days of the close of each income year to which this subsection applies certify to the commissioner that there has been no such aggregate material reduction in the historical economic base functions in this state for the income year just completed that otherwise has not been offset as provided below. Within sixty days thereafter, the commissioner shall review the certification and, if the commissioner determines that there has been no such net aggregate material reduction in the historical economic base functions in this state, the commissioner shall issue a certificate of eligibility for said income year. The following shall not constitute a material reduction in the historical economic base functions in this state: (1) A reduction of not more than two per cent of the historical economic base functions; (2) transfer of an historical economic base function to a person in this state; (3) transfer of a historical economic base function outside of the United States; or (4) reductions in historical economic base functions attributable to reductions in volume, productivity improvements or the discontinuance of operations due to obsolescence or the like. Any transfers that may otherwise be counted in determining if a material reduction occurred may be offset to the extent economic base functions listed in, or comparable to those listed in, the memorandum of understanding are increased in this state, transferred into this state, or established in this state. Any such increase, transfer or establishment made during an income year, or subsequent to such income year but prior to the filing of the return for such income year, shall be effective for such income year and all income years thereafter. The commissioner may issue or reissue a certificate of eligibility for the applicable income year following any such offset. The aerospace company, or in the case of a combined return including an aerospace company, the combined group, shall include its certificate of eligibility and memorandum of understanding with its corporation business tax return for any applicable income year. Information provided under this subsection and subsection (f) of this section shall be treated as provided in subsection (k) of section 32-11a.
(f) The tentative credit allowable to the taxpayer, or in the case of a combined return, the combined group, that pays or incurs research and development expenses in excess of two hundred million dollars for the income year shall be reduced for any income year in which the workforce reductions, if any, exceed the percentages set forth below. For purposes of this subsection, workforce reductions shall be reductions of the historical Connecticut wage base of the taxpayer, or in the case of a combined return, the combined group, as a result of the transfer outside of this state, other than to a location outside the United States, of work done by employees of the taxpayer, or in the case of a combined return, the combined group. Such reduction in the tentative credit shall be as follows: (1) If the historical Connecticut wage base for the income year is so reduced by not more than two per cent, the tentative credit allowable for the income year shall not be reduced; (2) if the historical Connecticut wage base for the income year is so reduced by more than two per cent but not more than three per cent, the tentative credit allowable for the income year shall be reduced by ten per cent; (3) if the historical Connecticut wage base for the income year is so reduced by more than three per cent but not more than four per cent, the tentative credit allowable for the income year shall be reduced by twenty per cent; (4) if the historical Connecticut wage base for the income year is so reduced by more than four per cent but not more than five per cent, the tentative credit allowable for the income year shall be reduced by forty per cent; (5) if the historical Connecticut wage base for the income year is so reduced by more than five per cent but not more than six per cent, the tentative credit allowable for the income year shall be reduced by seventy per cent; and (6) if the historical Connecticut wage base for the income year is so reduced by more than six per cent, no credit for the income year shall be allowed. The Connecticut wage base for any income year shall be the total wages assigned to Connecticut for such income year under section 12-218 excluding wages paid to the ten most highly-compensated executives of the taxpayer, or in the case of a combined return, the combined group, and any compensation that does not subject the recipient thereof to federal income tax thereon in said income year. The historical Connecticut wage base shall be the Connecticut wage base for the third full income year immediately preceding the current income year; provided the historical Connecticut wage base for the first three income years commencing on or after January 1, 1993, shall be the Connecticut wage base for May 1993, converted to an annual basis. The following shall not constitute a workforce reduction for any income year: (A) A reduction of wages attributable to the transfer of work done by a taxpayer, or in the case of a combined return, by the combined group, in this state to a party in this state; (B) a reduction of wages attributable to the transfer of work done by a taxpayer, or in the case of a combined return, by the combined group, outside the United States; or (C) a reduction in wages attributable to reductions in volume, productivity improvements or the discontinuance of operations due to obsolescence or the like. Solely for purposes of determining whether the allowable credit is to be reduced under this subsection for any income year, the Connecticut wages attributable to any new jobs or jobs moved into this state by the taxpayer, or in the case of a combined return, the combined group, during such income year or subsequent to such income year but prior to the filing of the return for such income year shall be an offset to any workforce reduction of a taxpayer, or in the case of a combined return, the combined group, for said income year. A new job shall be a job that did not exist in the business of a taxpayer, or in the case of a combined return, a member of the combined group, in this state at the end of the income year just completed. Notwithstanding subsection (g) of this section, a taxpayer may elect for any income year to separately compute its allowable tentative credit under this subsection for any one or more business units that had gross revenues for such income year in excess of one hundred million dollars. Any taxpayer subject to this subsection shall within sixty days of the close of each income year certify to the commissioner whether or not there has been any workforce reduction for the income year just completed, the amount thereof, and any offsets thereto as provided above. Within sixty days thereafter, the commissioner shall review the certification and, if the commissioner determines that there has been no more than a six per cent workforce reduction, net of any such offsets, the commissioner shall issue a certificate of eligibility stating the amount of net workforce reduction so determined for said income year, if any. The commissioner shall not issue a certificate of eligibility for any income year in which the commissioner determines that there has been more than a six per cent net workforce reduction. The taxpayer, or in the case of a combined return, the combined group, shall file such a certificate of eligibility with any return on which a credit subject to this subsection is claimed.
(g) Where one or more taxpayers properly included in a combined return pays or incurs research and development expenses, all allowances and limitations under this section shall be made on an aggregate basis for all taxpayers included in such combined return, provided, the credit attributable to a qualified small business may be taken only against the combined tax liability attributable to such qualified small business. The amount of the combined tax for all corporations properly included in a combined corporation business tax return that is attributable to a qualified small business shall be in the same ratio to such combined tax that the net income apportioned to this state of the qualified small business bears to the net income, in the aggregate of all corporations included in such combined return. Solely for the purposes of computing such ratio, any net loss apportioned to this state by a corporation included in such combined return shall be disregarded.
(h) Any taxpayer, or in the case of a combined return, any combined group of taxpayers, that claims a credit under section 12-217j for any income year shall reduce the amount of research and development expenses that otherwise may be taken into account in computing the allowable credit under subsection (c) of this section for such income year by the amount of excess research and experimental expenditures, as computed under said section 12-217j, for which the credit thereunder is given. Any taxpayer, or in the case of a combined return, any combined group of taxpayers, that claims a credit under section 12-217l for any income year shall reduce the amount of research and development expenses that otherwise may be taken into account in computing the allowable credit under subsection (c) of this section for such income year by the amount of excess grants to institutions of higher education in Connecticut, as computed under said section 12-217l, for which the credit thereunder is given.
(i) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to carry out the purposes of this section.
(P.A. 93-433, S. 1, 26; P.A. 95-250, S. 1; P.A. 96-211, S. 1, 5, 6; P.A. 98-110, S. 23, 27; June Sp. Sess. P.A. 98-1, S. 85, 121; P.A. 99-173, S. 40, 65; June Sp. Sess. P.A. 99-1, S. 28, 51.)
History: P.A. 93-433 effective July 1, 1993; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development; P.A. 98-110 expanded credit to qualified small businesses and defined the term, effective May 19, 1998, and applicable to income years commencing on or after January 1, 2000; June Sp. Secs. P.A. 98-1 amended Subsec. (b)(4) to change reference to Sec. 12- 217m to Sec. 12-217w, effective June 24, 1998; P.A. 99-173 amended Subsec. (c)(1) to increase the credit for companies who employ over two thousand five hundred people in the state, have in excess of three billion dollars in revenue and are located in an enterprise zone, effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; June Sp. Sess. P.A. 99-1 amended Subsec. (c) (1) to change tentative credit for research and development expenses for businesses employing over two thousand five hundred people with annual revenues in excess of three billion dollars and headquartered in an enterprise zone from three and one-half per cent of such expense to the greater of (A) the tentative credit calculated under Subdiv. (2), modified as provided in Subsec. (e) or (f), if applicable, or (B) three and one-half per cent of such expense, effective July 1, 1999.

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Sec. 12-217o. Tax credit for machinery and equipment expenditures. There shall be allowed as a credit against the tax imposed on any corporation under this chapter with respect to any taxable year of such corporation commencing on or after January 1, 1997, (1) that has more than two hundred fifty full-time, permanent employees but not more than eight hundred full-time, permanent employees whose wages, salaries or other compensation is paid in this state, as the phrase is used in subsection (c) of section 12-218, an amount equal to five per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures or (2) that has not more than two hundred fifty full-time, permanent employees whose wages, salaries or other compensation is paid in this state, as the phrase is used in subsection (c) of section 12-218, an amount equal to ten per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures. In addition, any amount spent (1) by a corporation whose income year, for federal income tax purposes, commences on the first day of January, February, March, April or May, (2) on machinery and equipment acquired for and installed in a facility in this state, (3) during that portion of its income year in 1995 that expired on May 31, 1995, shall be deemed to have been spent during its income year commencing in 1997 and shall be added to any amount actually spent on machinery and equipment acquired for and installed in a facility in this state during its income year commencing in 1997, provided the credit percentage to which such corporation shall be entitled for its income year commencing in 1997 shall be based on the number of full-time, permanent employees during its income year commencing in 1997.
(P.A. 93-382, S. 42, 69; P.A. 94-3, S. 1, 2; May Sp. Sess. P.A. 94-4, S. 69, 85; P.A. 95-160, S. 33, 64, 69; P.A. 96-139, S. 12, 13; 96-144, S. 4, 5; P.A. 99-121, S. 3, 28.)
History: P.A. 93-382 effective July 1, 1993, and applicable to taxable years of corporations commencing on or after July 1, 1995; P.A. 94-3 amended section to require machinery and equipment to be acquired for and installed in a facility in this state, effective April 7, 1994, and applicable to income years commencing on or after January 1, 1995; May Sp. Sess. P.A. 94-4 in Subdiv. (1) increased the maximum number of full time employees from five hundred to eight hundred, effective June 9, 1994; P.A. 95-160 added that credit is allowed with respect to any taxable year commencing on or after January 1, 1997, effective June 1, 1995, and applicable to income years commencing on or after January 1, 1995 (Revisor's note: P.A. 95-160 also revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section); P.A. 96-139 changed effective date of P.A. 95-160 but without affecting this section; P.A. 96-144 provided for a credit during the 1997 income year for companies that bought and installed machinery during the portion of their 1995 income year expiring on May 31, 1995, effective May 29, 1996; P.A. 99-121 allowed the credit to only apply for employees based in Connecticut, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999.

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Sec. 12-217p. Tax credits for taxpayer providing housing for low and moderate income employees. (a) As used in this section, "business firm" means any business entity authorized to do business in this state and subject to the corporation business tax imposed under this chapter, or any company subject to a tax imposed under chapter 207, any air carrier subject to the air carriers tax imposed under chapter 209, or any railroad company subject to the railroad companies tax imposed under chapter 210, or any regulated telecommunications service, express, telegraph, cable or community antenna television company subject to the regulated telecommunications service, express, telegraph, cable and community antenna television companies tax imposed under chapter 211, or any utility company subject to the utility companies tax imposed under chapter 212.
(b) There shall be allowed as a credit against the tax imposed by this chapter or chapter 207, 209, 210, 211 or 212 in any income year an amount equal to the amount paid during such income year by a business firm into a revolving loan fund established to provide loans for housing located in the state for low and moderate income employees of the business firm or any subsidiary thereof. Loans from any such fund shall be spent in this state and used for (1) the cost of housing that is to be a principal residence and falls within one hundred fifty per cent of the price guidelines established for programs administered by the Connecticut Housing Finance Authority, including costs for down payments, mortgage interest rate buy-downs, closing costs and other costs determined to be eligible under written procedures adopted by the Connecticut Housing Finance Authority under subsection (c) of this section and (2) payments for security deposits and advance payments for rental housing.
(c) The Connecticut Housing Finance Authority shall adopt written procedures in accordance with the provisions of section 1-121 for establishment and operation of employer revolving loan funds eligible for the credit provided in this section. Such procedures shall include provisions for employee eligibility and shall specify expenses for which loans may be made and provide the documentation and procedures necessary for a business firm to qualify for the tax credit.
(d) Any business firm claiming the credit allowed by this section shall submit documentation to the Commissioner of Revenue Services that the revolving loan fund complies with written procedures for revolving loan funds established by the Connecticut Housing Finance Authority under subsection (c) of this section.
(e) Nothing in this section shall be construed to prevent two or more business firms from participating jointly in one or more programs under the provisions of this section. Such joint programs shall be submitted, and acted upon, as a single program by the business firms involved.
(f) Any business firm which desires to apply for the credit allowed by this section shall submit the documentation required under subsection (d) of this section to the authority on or before November first of each year. The authority shall randomly select from among all qualified business firms, those firms allowed said credit. The credit shall be claimed on the tax return for the income year during which the selected business firm made payment into the revolving loan fund. The sum of all tax credit granted pursuant to the provisions of this section shall not exceed one hundred thousand dollars annually per business firm. In no event shall the total amount of all tax credits allowed to all business firms pursuant to the provisions of this section exceed one million dollars in any one fiscal year.
(g) No tax credit shall be granted to any bank, bank and trust company, insurance company, trust company, national bank, savings association, or building and loan association or any other business entity for activities that are a part of its normal course of business.
(h) Any tax credit not used in the period during which the investment was made may be carried forward or backward for the five immediately succeeding or preceding income years until the full credit has been allowed. For income years commencing on or after January 1, 1998, if the Connecticut Housing Finance Authority determines that sixty per cent or more of a revolving loan fund has not been loaned as provided in this section by a business firm on or before the date that is three years after the date that a revolving loan fund is established pursuant to this section by such business firm, the authority shall notify such firm and the commissioner that the authority has determined that sixty per cent or more of the fund has not been loaned as provided in this section, and such firm shall be required to recapture the credits previously granted under this section, to the extent provided for in written procedures of the authority adopted under section 1-121, on the first tax return required to be filed on or after the date of such notice for a tax imposed by this chapter or chapter 207, 209, 210, 210a or 212. If any amount of such recaptured credit has not been paid to the commissioner on or before the due date of such return, such amount shall bear interest at the rate of one per cent per month or fraction thereof from such due date to the date of payment.
(P.A. 93-74, S. 50, 67; P.A. 94-175, S. 18, 32; May Sp. Sess. P.A. 94-4, S. 80, 85; P.A. 95-160, S. 64, 69; P.A. 97-295, S. 18, 25; P.A. 98-262, S. 2, 14, 22.)
History: P.A. 93-74 effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1994; P.A. 94-175 made a technical change in the statutory reference in Subsecs. (b), (d) and (f), effective June 2, 1994; May Sp. Sess. P.A. 94-4 and P.A. 95-160 revised effective date of P.A. 94-175 but without affecting this section; P.A. 97-295 amended Subsec. (f) to reword provision re when credit may be claimed, amended Subsec. (h) to add new requirement for income years commencing on or after January 1, 1998, re recapture of credits and made technical and conforming changes, effective July 8, 1997, and applicable to tax returns filed for income years of corporations commencing on or after January 1, 1997; P.A. 98-262 amended Subsec. (h) to delete provision re accrual of interest from extended due date, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998, and revised effective date of P.A. 97- 295, but without affecting this section.

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Secs. 12-217q and 12-217r. Tax credit for expenditures for: Construction of or improvements to alternative fuel filling stations; Converting motor vehicles to utilize alternative fuels. Sections 12-217q and 12-217r are repealed, effective April 13, 1995, and applicable to income years or calendar quarters commencing on or after January 1, 1994.
(P.A. 94-170, S. 1, 2, 5; P.A. 95-15, S. 2, 3.)

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Sec. 12-217s. Tax credit for expenditures related to traffic reduction programs. There shall be allowed as a credit against the tax imposed on any corporation under this chapter which participates in the traffic reduction program established under section 13b-38p and conducted in this state, except corporations employing fewer than one hundred employees, with respect to any taxable year of such corporation commencing on or after January 1, 1997, an amount equal to fifty per cent of the amount spent in this state by such corporation, on or after January 1, 1995, for the direct costs of traffic reduction programs and services related thereto conducted in this state by such corporation in response to the provisions of sections 13b-38o, 13b-38p, 13b-38t, 13b- 38v and 13b-38x, not to exceed two hundred fifty dollars annually per employee employed in this state and participating in alternative means of commuting pursuant to traffic reduction programs conducted in this state. The total amount of credits available under the provisions of this section shall not exceed one million five hundred thousand dollars. The Department of Transportation shall adopt regulations in accordance with the provisions of chapter 54 which shall include, but not be limited to, establishing procedures for a corporation to obtain and qualify for the tax credit.
(May Sp. Sess. P.A. 94-4, S. 45, 85; P.A. 95-160, S. 34, 64, 69; 95-325, S. 14, 16; P.A. 96-139, S. 12, 13; 96-223, S. 6, 8; P.A. 00-174, S. 23, 83.)
History: May Sp. Sess. P.A. 94-4, S. 45, effective June 9, 1994, and applicable to income years commencing on or after January 1, 1995; P.A. 95-160 changed on or after January 1, 1995, to January 1, 1997, re taxable years when credit is allowed, effective June 1, 1995, applicable to income years commencing on or after January 1, 1995 (Revisor's note: P.A. 95-160 also revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section); P.A. 95-325 allowed as a credit such amount spent by a corporation "on or after January 1, 1995", effective July 13, 1995; P.A. 96-139 changed effective date of P.A. 95-160 but without affecting this section; P.A. 96-223 specified that credit be applicable to any corporation which participates in the traffic reduction program under Sec. 13b-38p, substituted "traffic reduction" for "transportation management" programs and made technical changes, effective July 1, 1996; P.A. 00-174 specified that section applies to programs conducted in this state for employees employed in this state, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000.

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Sec. 12-217t. Tax credit for personal property taxes paid on electronic data processing equipment. (a) There shall be allowed as a credit against the tax imposed by chapter 207, this chapter, chapter 208a, 209, 210, 211, or 212 or against the tax imposed pursuant to section 12-202a in an amount determined under the provisions of subsection (b) of this section with respect to the personal property taxes paid during any income year, on electronic data processing equipment. For the purposes of this section "electronic data processing equipment" means computers, printers, peripheral computer equipment, bundled software and any computer-based equipment acting as a computer as defined under Section 168 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and any other such equipment reported as a Code 20 on the Personal Property Declaration as prescribed by the Secretary of the Office of Policy and Management pursuant to section 12-27.
(b) The amount allowed as a credit in any income year shall be the full amount of the tax on such electronic data processing equipment paid pursuant to section 12-71 or 12-80a, and as defined under Section 168 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, provided no credit shall be allowed for the payment of any interest or penalty on the tax.
(c) The credit provided for by this section shall be allowed for any taxes owed on the grand list of October 1, 1994, and each grand list annually thereafter or included in the list prescribed under section 12-80a for such grand list. Such credits shall first be used by the taxpayer against the corporation business tax under this chapter, if any, and then may be used against any tax paid by the taxpayer under the provisions of chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed upon a health care center under section 12-202a. The amount of credits allowable under this section in any tax year against the taxes imposed by chapter 207, 208, 208a, 209, 210, 211 or 212 or against the tax imposed on health care centers, under the provisions of section 12-202a, shall be allowable only after all other credits allowable against such taxes for such tax year have been applied.
(d) In the case of leased electronic data processing equipment, the lessee, not the lessor, shall be entitled to claim the credit allowed pursuant to this section if the lease by its terms or operation imposes on the lessee the cost of the personal property taxes on such equipment, provided the lessor and lessee may elect, in writing, that the lessor may claim the credit provided by this section. Such election shall be attached to the tax return filed by the lessor on which such credit is claimed.
(e) In the case of taxpayers filing a combined return pursuant to section 12-223a, the credit provided by this section shall be allowed on a combined basis, such that the amount of personal property taxes paid by such taxpayers with respect to such equipment may be claimed as a tax credit against the combined tax liability of such taxpayers as determined under this chapter. Credits available to taxpayers which are subject to tax under this chapter but not subject to tax under chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed on health care centers under the provisions of section 12-202a shall be used prior to credits of companies included in such combined return which are also subject to tax under said chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed upon health centers pursuant to the provisions of section 12-202a.
(f) If the amount of credit allowable under this section exceeds the sum of (1) the corporation business tax, if any, and (2) any taxes imposed by chapter 207, 208a, 209, 210, 211 or 212 paid by the taxpayer, after all other credits allowable against such taxes have first been applied, then any balance of the credit allowable under this section remaining may be taken in any of the five succeeding income years.
(May Sp. Sess. P.A. 94-4, S. 47, 85; P.A. 95-160, S. 35, 64, 69; P.A. 96-139, S. 12, 13; 96-144, S. 1, 5.)
History: May Sp. Sess. P.A. 94-4, S. 47, effective June 9, 1994, and applicable to property on the grand list as of October 1, 1994; P.A. 95-160 amended Subsec. (a) to allow credit against the tax imposed by chapters 207, 209, 210, 211 or 212 or section 12-202a in income years commencing on or after January 1, 1997, instead of January 1, 1995, and Subsec. (c) to make conforming technical changes, effective June 1, 1995, and applicable to income years commencing on or after January 1, 1995 (Revisor's note: P.A. 95-160 also revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section); P.A. 96-139 changed effective date of P.A. 95-160 but without affecting this section; P.A. 96-144 advanced the effective date of credit against chapters 207, 209, 210, 211, 212 and section 12-202a from income years commencing on or after January 1, 1997, to income years commencing on or after January 1, 1995, and added new Subsec. (f) to provide a five-year carry forward of any unused credit, effective May 29, 1996.

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Sec. 12-217u. Tax credit for financial institutions constructing new facilities and creating new jobs. (a) For purposes of this section:
(1) "Commissioner" means the Commissioner of Economic and Community Development;
(2) "Company" means any corporation, partnership, trust, association, unincorporated organization or similar organization;
(3) "Compensation is paid within this state" if (A) the individual's service is performed entirely within the state; or (B) the individual's service is performed both within and without the state, but the service performed without the state is incidental to the individual's service within the state;
(4) "Control" with respect to a corporation means ownership of stock possessing at least fifty per cent of the total combined voting power of all classes of stock entitled to vote. "Control" with respect to a partnership, association or similar unincorporated organization means ownership of at least fifty per cent of the capital or profits interest in such partnership or association. "Control" with respect to a trust, means ownership of at least fifty per cent of the beneficial interest in the principal or income of such trust. Ownership shall be determined as provided in Section 267(c) of the Internal Revenue Code of 1986, as in effect on October 14, 1994, other than paragraph (3) of such section;
(5) "Financial institution" means any bank, holding company or out-of-state bank, as those terms are defined in section 36a-2, or out-of-state holding company, as that term is defined in section 36a-410, which directly or indirectly establishes an office in Connecticut and is subject to the supervision of or regulation by the Commissioner of Banking pursuant to title 36a or by one or more federal banking agencies pursuant to applicable federal law. "Financial institution" also means any establishment described in major group 61 or 62 in the Standard Industrial Classification Manual, United States Office of Management and Budget, 1987 edition, or in Subsector 522 or 523 in the North American Industrial Classification System, United States manual, United States Office of Management and Budget, 1997 edition, as engaged primarily in the extending of credit in the form of loans or the underwriting, purchase, sale or brokerage of securities and other financial contracts on their own account or for the account of others, and exchanges, exchange clearinghouses and other services allied with the exchange of securities and commodities or a holding company controlling any such establishment;
(6) "Related person" means a corporation, limited liability company, partnership, trust, association, unincorporated organization or similar organization that is controlled by the financial institution;
(7) "Tax" means the corporation business tax imposed by this chapter;
(b) There shall be allowed a credit against the tax imposed on a financial institution not to exceed fifty per cent of the amount of such tax, provided the aggregate amount of the credit that may be taken under this subsection shall in no event exceed one hundred twenty million dollars over the period for which it is allowed and provided further the total amount of credit allowed in any qualified income year shall not exceed the aggregate amount as determined in accordance with the employment requirements for such year under subsection (c) of this section, reduced by the amount of credit previously allowed, but in no event shall the amount be below zero. The credit shall be allowed in the initial qualified year and in each of the nine consecutive income years thereafter which is a subsequent qualified year.
(c) For purposes of this section, (1) the initial qualified year is the income year with respect to which the financial institution first meets all of the following criteria: (A) It has constructed a new facility in Connecticut of at least nine hundred thousand gross square feet for the purpose of carrying on, directly or indirectly, the business of the financial institution; (B) it has obtained a temporary or permanent certificate of occupancy for such facility; (C) it has employed, during the income year for which the credit is claimed, an average of at least (i) one thousand two hundred qualified employees to claim a thirty per cent tax credit, which shall not exceed seventy-two million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed, (ii) one thousand six hundred qualified employees to claim a forty per cent tax credit, which shall not exceed ninety-six million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed, and (iii) two thousand qualified employees to claim a fifty per cent tax credit, which shall not exceed one hundred twenty million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed; and (D) it has been issued an initial certificate of eligibility by the commissioner under subsection (g) of this section; and (2) a subsequent qualified year is an income year, following an initial qualified year, with respect to which the financial institution employs an average of at least (A) one thousand two hundred qualified employees to claim a thirty per cent tax credit, which shall not exceed seventy-two million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed, (B) one thousand six hundred qualified employees to claim a forty per cent tax credit, which shall not exceed ninety-six million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed, and (C) two thousand qualified employees to claim a fifty per cent tax credit, which shall not exceed one hundred twenty million dollars in the aggregate over the period of initial and subsequent qualified years for which the credit under subsection (b) is allowed, and has been issued an annual certificate of eligibility by the commissioner under subsection (g) of this section.
(d) For purposes of this section, (1) a qualified employee is an individual whose compensation is paid within this state and (A) is employed directly by the financial institution or a related person and who works an average of at least thirty-five hours per week for at least eight consecutive weeks for such financial institution or related person, (B) is an independent contractor of the financial institution or of a related person and who works an average of at least thirty-five hours per week for at least eight consecutive weeks for such financial institution or related person, or (C) is an employee or principal of a company other than the financial institution or a related person if (i) such individual works an average of at least thirty-five hours per week for at least eight consecutive weeks providing services to the financial institution or a related person, and (ii) such company derives not less than eighty per cent of its gross revenues from the financial institution, one or more related persons or a combination thereof. A qualified employee shall not include any individual who would have satisfied the criteria of a qualified employee prior to the date that a proposal by the financial institution to create new positions in this state was approved by the commissioner; and (2) notwithstanding the provisions of subdivision (1) of this subsection, an individual is not a qualified employee if (A) the prior employer of such individual was a company other than the financial institution or a related person, (B) compensation was paid in this state to such individual by such employer, (C) the individual was employed for an average of at least thirty- five hours per week and had been employed by such employer for at least eight consecutive weeks, and (D) either (i) the individual is employed directly by the financial institution or a related person in which the prior employer had an ownership interest equal to ten per cent or more of the voting rights of the financial institution or related person at the time such individual became employed by the financial institution or related person, unless the position previously held by such individual with the prior employer has been filled by the prior employer; (ii) the individual is employed directly by the financial institution or a related person which had an ownership interest equal to ten per cent or more of the voting rights of the prior employer at the time such individual became employed by the financial institution or related person, unless the position previously held by such individual with the prior employer has been filled by the prior employer; or (iii) the prior employer of such individual was a company which was acquired directly or indirectly by, or merged or consolidated with, the financial institution or a related person and the individual was employed by that company at the date of such acquisition, merger or consolidation.
(e) For each income year in which the credit is claimed, the average number of qualified employees shall be the sum of (1) the average of the number of qualified employees reported in the quarterly Federal Insurance Contributions Act tax returns of the financial institution or a related person; (2) the average of the number of qualified employees who are included in the quarterly reports described in subsection (g) of this section; and (3) the average of the number of qualified employees reported in the quarterly Federal Insurance Contributions Act tax returns of the company as described in subparagraph (C) of subdivision (1) of subsection (d) of this section. If the number of qualified employees in any income year fails to equal or exceed the number necessary to qualify under subsection (b) or (f) of this section, as the case may be, the financial institution may compute an average which includes the first quarter of the next succeeding income year with the four quarters of the subject income year and, if such new average equals or exceeds the criteria set forth in subsection (c) or (f) of this section, as the case may be, such financial institution shall be deemed to have met the employment criteria necessary to qualify under subsection (b) or (f) of this section, as the case may be. If two otherwise unrelated financial institutions have a related person in common, the employees of such related person may be considered in determining the average number of employees for only one of the financial institutions.
(f) (1) There shall be allowed a credit against the tax imposed on a financial institution for an additional five-year period if the financial institution (A) employs an average of at least three thousand qualified employees in the tenth income year after the initial qualified year and during each subsequent income year for which the credit is claimed; and (B) has been issued a certificate by the commissioner under subsection (g) of this section. The credit allowed under this subsection may be claimed each year for five consecutive income years beginning with the tenth income year after the initial qualified year.
(2) The amount of the credit allowed by this subsection shall equal twenty-five per cent of the tax imposed on a financial institution provided the aggregate amount of the credit that may be taken under this subsection and subsection (b) of this section may not exceed one hundred forty-five million dollars.
(g) Upon application from a financial institution, the commissioner shall issue an initial certificate of eligibility for the credit allowed under subsection (b) of this section after it has been established that the applicant satisfies the new facility construction, certificate of occupancy and relevant employment requirements of this section and, after consultation with the Commissioner of Revenue Services and the Commissioner of Banking, that the applicant is a financial institution. If the commissioner determines that all appropriate requirements are met, he shall issue an annual certificate of eligibility for the credit allowed under subsection (b) or (f) of this section for each income year for which an application for a credit under either of said subsections is made. The commissioner shall require the financial institution to submit quarterly reports of the number of individuals to whom the financial institution or a related person made payments of six hundred dollars or more which must be reported as provided by Section 6041 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, for each income year for which the credit is claimed and to submit such other information as may be necessary to determine whether all appropriate requirements have been met and that the applicant continues to be a financial institution. Such reports shall also include the number of individuals who are principals and who qualify as qualified employees under subparagraph (C) of subdivision (1) of subsection (d) of this section.
(h) The sale, merger, acquisition, bankruptcy or other reorganization by or of a financial institution may not create new eligibility for the credit allowed under subsection (b) or (f) of this section in a succeeding company. Any successor to the financial institution which is a financial institution may qualify under subsection (b) or (f) of this section if either the original financial institution or such successor satisfies the new facility construction and certificate of occupancy requirements and such successor qualifies under subsection (b) or (f) of this section on an annual basis, provided the total credits available to the successor financial institution, when added to all credits taken by the original financial institution, shall not exceed the applicable limits under subsection (b) or (f) of this section, or both, as the case may be.
(i) The commissioner may accept and approve proposals to create new positions as described in subsection (d) of this section. The commissioner shall prescribe the form of such proposals.
(j) Any taxpayer claiming a credit allowed under this section shall submit to the Commissioner of Revenue Services a copy of the certificate of eligibility with its tax return for each income year for which the credit is claimed.
(k) No taxpayer claiming the credit under this section is eligible for the credit allowed under section 12-217w.
(l) (1) In the case of a financial institution included in a combined return under section 12-223a, a credit allowed under subsection (b) or (f) of this section may be taken against the tax of the combined group. (2) The credit allowed to a financial institution under subsection (b) or (f) of this section may be taken by any corporation which is eligible to elect to file a combined return with a group with which the financial institution is eligible to file a combined return, provided the aggregate credit taken by all such corporations in any income year shall not exceed the aggregate credit for which such group would have been eligible if it had filed a combined return.
(m) The credits allowed under this section shall be claimed prior to any other credits allowed against the corporation business tax.
(n) (1) No taxpayer which has received financial assistance from the state under section 32-236 may claim the credit under subsection (b) of this section. The total amount of credit allowed under subsection (f) of this section to such a taxpayer shall not exceed, in the aggregate, twenty-five million dollars.
(2) Notwithstanding the provisions of subsection (c) of this section, for purposes of any credit allowed under subsection (f) of this section to a taxpayer which has received financial assistance under section 32-236, the initial qualified year shall be the income year in which the Commissioner of Economic and Community Development executes an agreement with such financial institution to provide financial assistance pursuant to section 32-236.
(3) For purposes of determining the number and specification of qualified employees under subsection (d) of this section, and the number and specification of new employees under section 12-217e, with respect to any taxpayer which has received financial assistance under section 32-236, the dates, numbers and specifications shall be the dates, numbers and specifications provided in an agreement executed by the Commissioner of Economic and Community Development with such financial institution to provide financial assistance pursuant to section 32-236. In no event shall the definition of qualified employee be more favorable to the employer than the definition provided in this section.
(Oct. Sp. Sess. P.A. 94-1, S. 17, 21; P.A. 95-79, S. 28, 189; 95-129, S. 4, 5; 95-250, S. 1; P.A. 96-211, S. 1, 5, 6; P.A. 97-295, S. 5, 25; P.A. 98-262, S. 14, 22; P.A. 00-170, S. 26, 42; 00-174, S. 24, 83.)
History: Oct. Sp. Sess. P.A. 94-1, S. 17 effective January 1, 1995, and applicable to income years of corporations commencing on or after said date; P.A. 95-79 amended Subsec. (a) to redefine "related person" to include a limited liability company, effective May 31, 1995; P.A. 95-129 amended Subsec. (b) by adding proviso re the ceiling and floor of the total credit allowed in any qualified income year, and amended Subsec. (c) by changing the minimum average number of employees from two thousand to the levels specified in Subdiv. (1)(C)(i), (ii) and (iii) in the initial qualified year and specified in Subsec. (c)(2)(A), (B) and (C) in a subsequent qualified year, effective May 25, 1995; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development; P.A. 97-295 amended Subsec. (k) to change reference from Sec. 12-217m to 12-217w, effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 00-170 added Subsec. (n) re a restriction on credits under this section for recipients of assistance under Sec. 32-236, effective May 26, 2000; P.A. 00-174 amended Subsec. (a)(5) to add references to the North American Industrial Classification System in the definition of "financial institution", effective May 26, 2000.

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Sec. 12-217v. Tax credit for qualifying corporations in enterprise zones. (a) As used in this section, "qualifying corporation" means a corporation which is created on or after January 1, 1997, in an enterprise zone and which either (1) has at least three hundred seventy-five employees, at least forty per cent of whom (A) are residents of the enterprise zone or the municipality in which the enterprise zone is located and (B) qualify under the Job Training Partnership Act or (2) has less than three hundred seventy- five employees, at least one hundred fifty employees of whom (A) are residents of the enterprise zone or the municipality in which the enterprise zone is located and (B) qualify under the Job Training Partnership Act.
(b) There shall be allowed as a credit against the tax imposed on any corporation under this chapter which is created on or after January 1, 1997, in an enterprise zone, in an amount equal to (1) one hundred per cent of the tax liability of the corporation under said chapter with respect to the first three taxable years of the corporation and (2) fifty per cent of the tax liability of the corporation under this chapter with respect to the next seven taxable years of the corporation.
(P.A. 96-239, S. 3, 17.)
History: P.A. 96-239 effective July 1, 1996.

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Sec. 12-217w. Tax credit for investment in fixed capital. (a) For purposes of this section, "fixed capital" means tangible personal property which (1) has a class life, in years, of more than four years, as described in Section 168(e) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, (2) is acquired by purchase from a person other than a related person, (3) is not acquired to be leased, and is not leased, to another person or persons during the twelve full months following its acquisition, and (4) will be held and used in this state by a corporation in the ordinary course of the corporation's trade or business in this state for not less than five full years following its acquisition. "Fixed capital" does not include inventory, land, buildings or structures, or mobile transportation property. With respect to a corporation claiming a credit under this section, a "related person" means a corporation, partnership, association or trust controlled by such corporation; an individual, corporation, partnership, association or trust that is in control of such corporation; a corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in control of such corporation; or a member of the same controlled group as such corporation. For purposes of this section, "control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote; with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, other than Paragraph (3) of such section.
(b) There shall be allowed a credit for any corporation against the tax imposed under this chapter in an amount paid or incurred by such corporation for any new fixed capital investment during the income year in which such fixed capital is acquired as follows: For any income year commencing on or after January 1, 1998, and prior to January 1, 1999, equal to three per cent of such amount paid or incurred by the corporation during such income year; for any income year commencing on or after January 1, 1999, and prior to January 1, 2000, equal to four per cent of such amount paid or incurred by the corporation during such income year; and for any income year commencing on or after January 1, 2000, equal to five per cent of such amount paid or incurred by the corporation during such income year.
(c) The amount of such credit allowed to any corporation under this section shall not exceed the amount of tax due from such corporation under this chapter with respect to such income year.
(d) No corporation claiming the credit under this section with respect to the acquisition of fixed capital, as defined in subsection (a) of this section, may claim a credit against any tax under any other provision of the general statutes with respect to the same acquisition.
(e) Any tax credit not used in the income year during which the acquisition was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed.
(f) If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for three full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture one hundred per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such three-year period expires. If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for five full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture fifty per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such five-year period expires. The provisions of this subsection shall not apply if the property that is the subject of the credit under this section is replaced. If any amount of credit required to be recaptured has not been paid to the commissioner on or before the first day of the fourth month next succeeding the end of the income year immediately succeeding the income year during which the three-year or five-year period, as the case may be, expires, such amount shall bear interest at the rate of one per cent per month or fraction thereof from such date to the date of payment.
(P.A. 97-295, S. 1, 25; P.A. 98-262, S. 10, 14, 22.)
History: P.A. 97-295, Sec. 1 effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 98-262 amended Subsec. (f) to delete provision re accrual of interest from extended due date and clarified the text regarding recapture, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998, and revised effective date of P.A. 97-295, but without affecting this section.

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Sec. 12-217x. Tax credit for human capital investment. (a) For purposes of this section, "human capital investment" means the amount paid or incurred by a corporation on (1) job training which occurs in this state for persons who are employed in this state; (2) work education programs in this state including, but not limited to, programs in public high schools and work education-diversified occupations programs in this state; (3) worker training and education for persons who are employed in this state provided by institutions of higher education in this state; (4) donations or capital contributions to institutions of higher education in this state for improvements or advancements of technology, including physical plant improvements; (5) planning, site preparation, construction, renovation or acquisition of facilities in this state for the purpose of establishing a day care facility in this state to be used primarily by the children of employees who are employed in this state; (6) subsidies to employees who are employed in this state for child care to be provided in this state; and (7) contributions made the Individual Development Account Reserve Fund, as defined in section 31-51ww.
(b) There shall be allowed a credit for any corporation against the tax imposed under this chapter in an amount spent by such corporation, as a human capital investment as follows: For any income year commencing on or after January 1, 1998, and prior to January 1, 1999, equal to three per cent of such amount paid or incurred by the corporation during such income year; for any income year commencing on or after January 1, 1999, and prior to January 1, 2000, equal to four per cent of such amount paid or incurred by the corporation during such income year; and for any income year commencing on or after January 1, 2000, equal to five per cent of such amount paid or incurred by the corporation during such income year.
(c) The amount of credit allowed to any corporation under this section shall not exceed the amount of tax due from such corporation under this chapter with respect to such income year.
(d) No corporation claiming the credit under this section with respect to a human capital investment as defined in subsection (a) of this section shall claim a credit against any tax under any other provision of the general statutes against any tax with respect to the same investment.
(e) Any tax credit not used in the income year during which the investment was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed.
(P.A. 97-295, S. 2, 25; P.A. 98-262, S. 14, 22; P.A. 00-192, S. 11, 102.)
History: P.A. 97-295, Sec. 2 effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 00-192 amended Subsec. (a) to add Subdiv. (7) re contributions to the Individual Development Account Reserve Fund, effective January 1, 2001, and applicable to income years commencing on or after that date.

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Sec. 12-217y. Tax credit for employing persons who are receiving benefits from the temporary family assistance program. (a) As used in this section:
(1) "Business firm" means any business entity authorized to do business in this state and subject to the corporation business tax imposed under this chapter;
(2) "Qualifying employee" means during fiscal year 2000 or with respect to the business firm's income year commencing in 2000 or thereafter, any employee who is employed not less than thirty hours per week by the same business firm and who, at the time of being hired by such business firm, is and has been receiving benefits from the temporary family assistance program for more than nine months and meets other requirements that the Labor Commissioner may establish in regulations adopted in accordance with chapter 54. For purposes of this subdivision, the number of hours per week an employee participates in a job training program approved by the Labor Commissioner shall be included in calculating the number of hours such employee is employed.
(b) Any business firm which desires to hire a qualifying employee in any income year commencing on or after January 1, 1997, may apply to the Labor Commissioner for an allocation of a tax credit in an amount equal to one hundred twenty-five dollars for each full month that such employee is employed by such firm. The application for a tax credit under this subsection shall set forth information that said commissioner deems necessary in regulations adopted in accordance with chapter 54.
(c) Applications shall be submitted annually, before such expenditures are made, to the Labor Commissioner on or after July first but not later than December thirty-first. The commissioner shall approve or disapprove each application within sixty days of its submission to the commissioner based on (1) the compliance of such application with the provisions of this section, (2) regulations adopted pursuant to this section, and (3) the amount of tax credits remaining in the annual allotment provided in this section for the year involved. The commissioner shall approve applications in the order in which they are received in the commissioner's office between July first and December thirty- first of each year. If the commissioner approves the application of the business firm and if the limit for tax credit for that year has not yet been allocated, the commissioner shall allocate and commit an amount of tax credits to such business firm. Any business firm receiving such an allocation shall, within thirty days of the end of its income year, submit a report on the number of full months that qualifying employees were employed by such firm during such year.
(d) The credit shall be claimed on the tax return for the income year during which qualifying employees were employed for full months by the business firm. Any tax credit not used in the period during which the expenditure was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed.
(e) In no event shall the total amount of all tax credits allowed to all business firms pursuant to the provisions of this section exceed one million dollars in any one fiscal year.
(f) No credit under subsection (c) of this section shall be allowed, with respect to wages paid to any qualifying employee, to any business firm that has previously been granted a tax credit under this section with respect to wages paid to the same employee.
(P.A. 97-295, S. 7, 25; P.A. 98-262, S. 14, 22; P.A. 99-203, S. 1, 3; P.A. 00-174, S. 25, 83.)
History: P.A. 97-295, Sec. 7 effective July 8, 1997; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 99-203 amended Subsec. (a) by adding Subdiv. indicators, by increasing from fifteen to twenty- five the minimum number of hours per week a qualified employee must work during fiscal year 1999, by increasing from twenty-five to thirty the minimum number of hours per week a qualified employee must work during and after fiscal year 2000, and by including the hours spent in an approved job training program in calculating the number of hours an employee is employed, and amended Subsecs. (a), (b) and (c) by transferring administration of the tax credit program from the Department of Social Services to the Labor Department, effective July 1, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 00-174 amended Subsec. (a)(2) to delete former Subpara. (A) and make technical and conforming changes, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000.

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Sec. 12-217z. Corporation Business Tax Credit Review Committee. (a) There is established a Corporation Business Tax Credit Review Committee which shall be comprised of: (1) The chairpersons and ranking members of the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding, or their designees; (2) one member appointed by each of the following: The Governor, the president pro tempore of the Senate, the speaker of the House of Representatives, the majority leader of the Senate, the majority leader of the House of Representatives, the minority leader of the House of Representatives and the minority leader of the Senate; and (3) the Commissioners of Revenue Services and Economic and Community Development, or their designees.
(b) The committee shall study and evaluate all the existing credits against the corporation business tax. The study shall include, but is not limited to, consideration of the following with respect to each credit: (1) Has the credit provided a benefit to the state in terms of measurable economic development, new investments in the state, new jobs or retention of existing jobs, or measurable benefits for the workforce in the state; (2) is there sufficient justification to continue the credit as it currently exists or is it obsolete; (3) could the credit be more efficiently administered as part of a broad-based credit; and (4) does the credit add unnecessary complexity in the application, administration and approval process for the credit. The committee shall also engage in an analysis of the history, rationale and estimated revenue loss as a result of each tax credit and shall recommend revisions necessary to change the tax by eliminating or changing any redundant, obsolete or unnecessary tax credit or any credit that is not providing a measurable benefit sufficient to justify any revenue loss to the state.
(c) The committee shall report its findings and recommendations to the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding no later than January 30, 2002, and every five years thereafter, in accordance with section 11-4a.
(P.A. 97-295, S. 4, 25; P.A. 98-262, S. 14, 22.)
History: P.A. 97-295, Sec. 4 effective July 8, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section.

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Sec. 12-217aa. Order of credits. (a) Except as otherwise provided in section 12- 217t, whenever a company is eligible to claim more than one corporation business tax credit, the credits shall be claimed for the income year in the following order: (1) Any credit that may be carried backward to a preceding income year or years shall first be claimed (A) with any credit carry-back that will expire first being claimed before any credit carry-back that will expire later or will not expire at all, and (B) if the credit carry- backs will expire at the same time, in the order in which the company may receive the maximum benefit; (2) any credit that may not be carried backward to a preceding income year or years and that may not be carried forward to a succeeding income year or years shall next be claimed, in the order in which the company may receive the maximum benefit; and (3) any credit that may be carried forward to a succeeding income year or years shall next be claimed (A) with any credit carry-forward that will expire first being claimed before any credit carry-forward that will expire later or will not expire at all, and (B) if the credit carry-forwards will expire at the same time, in the order in which the company may receive the maximum benefit.
(b) In no event shall any credit be claimed more than once.
(P.A. 98-244, S. 10, 35; 98-261, S. 4, 6.)
History: P.A. 98-244 effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; P.A. 98-261 amended Subsec. (a) to add exception for Sec. 12-217t, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998.

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Sec. 12-217bb. Tax credit for electric suppliers hiring displaced workers. (a) On and after July 1, 1998, there shall be allowed a credit against the tax imposed under this chapter on any electric supplier in the state other than a generation entity or affiliate of an electric company in an amount as provided in subsection (b) of this section with respect to each displaced worker hired by such electric supplier.
(b) The amount of the credit shall be one thousand five hundred dollars with respect to each displaced worker and shall be allowed in the income year in which such displaced worker first completes six full months of full-time employment with the taxpayer.
(c) The amount of credit allowed any taxpayer under this section for any income year shall not exceed the amount of tax due from such taxpayer under this chapter with respect to such income year. The credit allowed under this section shall be taken only once with respect to any displaced worker.
(d) For the purposes of this section (1) "displaced worker" means any Connecticut employee, other than an officer or a director, of an electric company, as defined in section 16-1, or a generation entity or affiliate who has been terminated as a direct result of restructuring of the electric industry, and (2) "electric supplier" means a facility that provides electric generation services, as defined in said section 16-1.
(P.A. 98-28, S. 47, 117.)
History: P.A. 98-28 effective April 29, 1998, and applicable to income years commencing on or after January 1, 1999.

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Sec. 12-217cc. Tax credit for certain small businesses obtaining financing from federal Small Business Administration. (a) As used in this section, "small business" means any business entity qualifying as a small business under 13 CFR Part 121 which has gross receipts of not more than five million dollars for the income year in which the credit is first allowed.
(b) There shall be allowed as a credit against the tax imposed by this chapter in any income year an amount equal to the amount paid during such income year by a small business to the federal Small Business Administration as a guaranty fee to obtain guaranteed financing from the federal Small Business Administration, provided the credit shall not reduce the tax in any income year below any minimum tax required under this chapter.
(c) If the amount of the credit allowable under this section exceeds the sum of any taxes paid by the small business after all other credits have first been applied, any such excess amount of the credit allowable under this section may be taken in any of the four succeeding income years.
(P.A. 99-173, S. 42, 65.)
History: P.A. 99-173 effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999.

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Sec. 12-217dd. Tax credit for donation of open space. (a) For purposes of this section, "donation of open space land" means the value of any land conveyed without financial consideration, or the value of any discount of the sale price in any sale of land or interest in land, to the state, a political subdivision of the state or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space.
(b) There shall be allowed a credit for all taxpayers against the tax imposed under section 12-217, in an amount equal to fifty per cent of any donation of open space land. For purposes of calculating the credit under this section, the amount of donation shall be based on the use value of the donated open space land. For purposes of this subsection, "use value" means the fair market value of land at its highest and best use, as determined by a certified real estate appraiser.
(c) A credit that is allowed under this section, with respect to any taxable year commencing on or after January 1, 2000, but is not used by a taxpayer may be carried forward to each of the successive income years until such credit is fully taken. In no case shall a credit that is not used be carried forward for a period of more than ten years.
(P.A. 99-173, S. 47, 65; P.A. 00-203, S. 6, 8, 11.)
History: P.A. 99-173 effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 00-203 amended Subsec. (b) by defining use value, effective June 7, 2000, and applicable to all open space land donations made on or after income year commencing January 1, 1999, and added Subsec. (c) re tax credit carry forward, effective July 1, 2000.

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Sec. 12-217ee. Sale of unused credits under section 12-217j and section 12- 217n to the state. (a) Any taxpayer that (1) is a qualified small business, (2) qualifies for a credit under section 12-217j or section 12-217n, and (3) cannot take such credit in the taxable year in which the credit could otherwise be taken as a result of having no tax liability under this chapter may elect to carry such credit forward under this chapter or may exchange such credit with the state for a cash payment equal to sixty-five per cent of the value of the credit.
(b) An application for such payment shall be made to the Commissioner of Revenue Services, at the same time such taxpayer files a final return for the income year, on such forms and containing such information as prescribed by said commissioner. If the commissioner determines that the taxpayer qualifies for a payment under this section, the commissioner shall notify, no later than one hundred twenty days from receipt of the application for such payment, the State Comptroller of the names of the eligible taxpayer, and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to such taxpayer.
(c) The Commissioner of Revenue Services may disallow the exchange of any credit otherwise allowable for a taxable year under this section if the company claiming the exchange has any amount of taxes due and unpaid to the state including interest, penalties, fees and other charges related thereto for which a period in excess of thirty days has elapsed following the date on which such taxes were due and which are not the subject of a timely filed administrative appeal to the commissioner or of a timely filed appeal pending before any court of competent jurisdiction. Before any such disallowance, the commissioner shall send written notice to the company, stating that it may pay the amount of such delinquent tax or enter into an agreement with the commissioner for the payment thereof, by the date set forth in said notice, provided, such date shall not be less than thirty days after the date of such notice. Failure on the part of the company to pay the amount of the delinquent tax or enter into an agreement to pay the amount thereof by said date shall result in a disallowance of the exchange being claimed.
(d) For purposes of this section "qualified small business" means a company that (1) has gross income for the previous income year that does not exceed seventy million dollars, and (2) has not, in the determination of the commissioner, met the gross income test through transactions with a related person, as defined in section 12-217w.
(P.A. 99-173, S. 38, 65.)
History: P.A. 99-173 effective June 23, 1999, and applicable to taxable years commencing on or after January 1, 2000.

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Sec. 12-218. Apportionment of net income. (a) Any taxpayer which is taxable both within and without this state shall apportion its net income as provided in this section. For purposes of apportionment of income under this section, a taxpayer is taxable in another state if in such state such taxpayer conducts business and is subject to a net income tax, a franchise tax for the privilege of doing business, or a corporate stock tax, or if such state has jurisdiction to subject such taxpayer to such a tax, regardless of whether such state does, in fact, impose such a tax.
(b) The net income of the taxpayer, when derived from business other than the manufacture, sale or use of tangible personal or real property, shall be apportioned within and without the state by means of an apportionment fraction, the numerator of which shall represent the gross receipts from business carried on within Connecticut and the denominator shall represent the gross receipts from business carried on everywhere, except that any gross receipts attributable to an international banking facility, as defined in section 12-217, shall not be included in the numerator or the denominator. Gross receipts as used in this subsection shall have the same meaning as used in subdivision (3) of subsection (c) of this section.
(c) Except as otherwise provided in subsection (k) or (l) of this section, the net income of the taxpayer when derived from the manufacture, sale or use of tangible personal or real property, shall be apportioned within and without the state by means of an apportionment fraction, to be computed as the sum of the property factor, the payroll factor and twice the receipts factor, divided by four. (1) The first of these fractions, the property factor, shall represent that part of the average monthly net book value of the total tangible property held and owned by the taxpayer during the income year which is held within the state, without deduction on account of any encumbrance thereon, and the value of tangible property rented to the taxpayer computed by multiplying the gross rents payable during the income year or period by eight. For the purpose of this section, gross rents shall be the actual sum of money or other consideration payable, directly or indirectly, by the taxpayer or for its benefit for the use or possession of the property, excluding royalties, but including interest, taxes, insurance, repairs or any other amount required to be paid by the terms of a lease or other arrangement and a proportionate part of the cost of any improvement to the real property made by or on behalf of the taxpayer which reverts to the owner or lessor upon termination of a lease or other arrangement, based on the unexpired term of the lease commencing with the date the improvement is completed, provided, where a building is erected on leased land by or on behalf of the taxpayer, the value of the land is determined by multiplying the gross rent by eight, and the value of the building is determined in the same manner as if owned by the taxpayer. (2) The second fraction, the payroll factor, shall represent the part of the total wages, salaries and other compensation to employees paid by the taxpayer during the income year which was paid in this state, excluding any such wages, salaries or other compensation attributable to the production of gross income of an international banking facility as defined in section 12-217. Compensation is paid in this state if (A) the individual's service is performed entirely within the state; or (B) the individual's service is performed both within and without the state, but the service performed without the state is incidental to the individual's service within the state; or (C) some of the service is performed in the state and (i) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or (ii) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state. (3) The third fraction, the receipts factor, shall represent the part of the taxpayer's gross receipts from sales or other sources during the income year, computed according to the method of accounting used in the computation of its entire net income, which is assignable to the state, and excluding any gross receipts attributable to an international banking facility as defined in section 12-217, but including receipts from sales of tangible property if the property is delivered or shipped to a purchaser within this state, other than a company which qualifies as a Domestic International Sales Corporation (DISC) as defined in Section 992 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and as to which a valid election under Subsection (b) of said Section 992 to be treated as a DISC is effective, regardless of the f.o.b. point or other conditions of the sale, receipts from services performed within the state, rentals and royalties from properties situated within the state, royalties from the use of patents or copyrights within the state, interest managed or controlled within the state, net gains from the sale or other disposition of intangible assets managed or controlled within the state, net gains from the sale or other disposition of tangible assets situated within the state and all other receipts earned within the state.
(d) Any motor bus company which is taxable both within and without this state shall apportion its net income derived from carrying of passengers for hire by means of an apportionment fraction, the numerator of which shall represent the total number of miles operated within this state and the denominator of which shall represent the total number of miles operated everywhere, but income derived by motor bus companies from sources other than the carrying of passengers for hire shall be apportioned as herein otherwise provided.
(e) Any motor carrier which transports property for hire and which is taxable both within and without this state shall apportion its net income derived from carrying of property for hire by means of an apportionment fraction, the numerator of which shall represent the total number of miles operated within this state and the denominator of which shall represent the total number of miles operated everywhere, but income derived by motor carriers from sources other than the carrying of property for hire shall be apportioned as herein otherwise provided.
(f) (1) Each taxpayer that provides management, distribution or administrative services, as defined in this subsection, to or on behalf of a regulated investment company, as defined in Section 851 of the Internal Revenue Code shall apportion its net income derived, directly or indirectly, from providing management, distribution or administrative services to or on behalf of a regulated investment company, including net income received directly or indirectly from trustees, and sponsors or participants of employee benefit plans which have accounts in a regulated investment company, in the manner provided in this subsection. Income derived by such taxpayer from sources other than the providing of management, distribution or administrative services to or on behalf of a regulated investment company shall be apportioned as provided in this chapter.
(2) The numerator of the apportionment fraction shall consist of the sum of the Connecticut receipts, as described in subdivision (3) of this subsection. The denominator of the apportionment fraction shall consist of the total receipts from the sale of management, distribution or administrative services to or on behalf of all the regulated investment companies. For purposes of this subsection, "receipts" means receipts computed according to the method of accounting used by the taxpayer in the computation of net income.
(3) For purposes of this subsection, Connecticut receipts shall be determined by multiplying receipts from the rendering of management, distribution or administrative services to or on behalf of each separate regulated investment company by a fraction (A) the numerator of which shall be the average of (i) the number of shares on the first day of such regulated investment company's taxable year, for federal income tax purposes, which ends within or at the same time as the taxable year of the taxpayer, that are owned by shareholders of such regulated investment company then domiciled in this state and (ii) the number of shares on the last day of such regulated investment company's taxable year, for federal income tax purposes, which ends within or at the same time as the taxable year of the taxpayer, that are owned by shareholders of such regulated investment company then domiciled in this state; and (B) the denominator of which shall be the average of the number of shares that are owned by shareholders of such regulated investment company on such dates.
(4) (A) For purposes of this subsection, "management services" includes, but is not limited to, the rendering of investment advice directly or indirectly to a regulated investment company, making determinations as to when sales and purchases of securities are to be made on behalf of the regulated investment company, or the selling or purchasing of securities constituting assets of a regulated investment company, and related activities, but only where such activity or activities are performed (i) pursuant to a contract with the regulated investment company entered into pursuant to 15 USC 80a-15(a), as from time to time amended, (ii) for a person that has entered into such contract with the regulated investment company, or (iii) for a person that is affiliated with a person that has entered into such contract with a regulated investment company.
(B) For purposes of this subsection, "distribution services" includes, but is not limited to, the services of advertising, servicing, marketing or selling shares of a regulated investment company, but, in the case of advertising, servicing or marketing shares, only where such service is performed by a person that is, or, in the case of a closed end company, was, either engaged in the service of selling such shares or affiliated with a person that is engaged in the service of selling such shares. In the case of an open end company, such service of selling shares shall be performed pursuant to a contract entered into pursuant to 15 USC 80a-15(b), as from time to time amended.
(C) For purposes of this subsection, "administrative services" includes, but is not limited to, clerical, fund or shareholder accounting, participant record keeping, transfer agency, bookkeeping, data processing, custodial, internal auditing, legal and tax services performed for a regulated investment company but only if the provider of such service or services during the income year in which such service or services are provided also provides, or is affiliated with a person that provides, management or distribution services to such regulated investment company.
(D) For purposes of this subsection, a person is "affiliated" with another person if each person is a member of the same affiliated group, as defined under Section 1504 of the Internal Revenue Code without regard to subsection (b) of said section.
(E) For purposes of this subsection, the domicile of a shareholder shall be presumed to be such shareholder's mailing address as shown in the records of the regulated investment company except that for purposes of this subsection, if the shareholder of record is an insurance company which holds the shares of the regulated investment company as depositor for the benefit of a separate account, then the taxpayer may elect to treat as the shareholders the contract owners or policyholders of the contracts or policies supported by such separate account. An election made under this subparagraph shall apply to all shareholders that are insurance companies and shall be irrevocable for, and applicable for, five successive income years. In any year that such an election is applicable, it shall be presumed that the domicile of a shareholder is the mailing address of the contract owner or policyholder as shown in the records of the insurance company.
(g) (1) Each taxpayer that provides securities brokerage services, as defined in this subsection, shall apportion its net income derived, directly or indirectly, from rendering securities brokerage services in the manner provided in this subsection. Income derived by such taxpayer from sources other than the rendering of securities brokerage services shall be apportioned as provided in this chapter.
(2) The numerator of the apportionment fraction shall consist of the brokerage commissions and total margin interest paid on behalf of brokerage accounts owned by the taxpayer's customers who are domiciled in this state during such taxpayer's income year, computed according to the method of accounting used in the computation of net income. The denominator of the apportionment fraction shall consist of brokerage commissions and total margin interest paid on behalf of brokerage accounts owned by all of the taxpayer's customers, wherever domiciled, during such taxpayer's income year, computed according to the method of accounting used in the computation of net income.
(3) For purposes of this subsection:
(A) "Security brokerage services" means services and activities including all aspects of the purchasing and selling of securities rendered by a broker, as defined in 15 USC 78c(a)(4) and registered under the provisions of 15 USC 78a to 78kk, inclusive, as from time to time amended, to effectuate transactions in securities for the account of others, and a dealer, as defined in 15 USC 78c(a)(5) and registered under the provisions of 15 USC 78a to 78kk, inclusive, as from time to time amended, to buy and sell securities, through a broker or otherwise. Security brokerage services shall not include services rendered by any person buying or selling securities for such person's own account, either individually or in some fiduciary capacity, but not as part of a regular business carried on by such person.
(B) "Securities" means security, as defined in 15 USC 78c(a)(10), as from time to time amended.
(C) "Brokerage commission" means all compensation received for effecting purchases and sales for the account or on order of others, whether in a principal or agency transaction, and whether charged explicitly or implicitly as a fee, commission, spread, markup or otherwise.
(4) For purposes of this subsection, the domicile of a customer shall be presumed to be such customer's mailing address as shown in the records of the taxpayer.
(h) (1) Any company that is (A) a limited partner in a partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) not otherwise carrying on or doing business in this state shall pay the tax imposed under section 12-214 solely on its distributive share as a partner of the income or loss of such partnership to the extent such income or loss is derived from or connected with sources within this state, except that, if the commissioner determines that the company and the partnership are, in substance, parts of a unitary business engaged in a single business enterprise, the company shall be taxed in accordance with the provisions of subdivision (3) of this subsection and not in accordance with the provisions of this subdivision, provided, in lieu of the payment of tax based solely on its distributive share, such company may elect for any particular income year, on or before the due date or, if applicable the extended due date, of its corporation business tax return for such income year, to apportion its net income within and without the state under the provisions of this chapter.
(2) Any company that is (A) a limited partner (i) in an investment partnership or (ii) in a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) otherwise carrying on or doing business in this state shall apportion its net income, including its distributive share as a partner of such partnership income or loss, within and without the state under the provisions of this chapter, except that the numerator and the denominator of its payroll factor, property factor, and receipts factor shall include its proportionate part, as a partner, of the numerator and the denominator of such partnership's payroll factor, property factor and receipts factor, respectively. For purposes of this section, such partnership shall compute its apportionment fraction and the numerator and the denominator of its payroll factor, property factor and receipts factor, as if it were a company taxable both within and without this state.
(3) Any company that is a general partner in a partnership that does business, owns or leases property or maintains an office within this state shall, whether or not it is otherwise carrying on or doing business in this state, apportion its net income, including its distributive share as a partner of such partnership income or loss, within and without the state under the provisions of this chapter, except that the numerator and the denominator of its payroll factor, property factor and receipts factor shall include its proportionate part, as a partner, of the numerator and the denominator of such partnership's payroll factor, property factor and receipts factor, respectively. For purposes of this section, such partnership shall compute its apportionment fraction and the numerator and the denominator of its payroll factor, property factor and receipts factor, as if it were a company taxable both within and without this state.
(i) The provisions of this section shall not apply to insurance companies.
(j) (1) Any financial service company as defined in section 12-218b, that has net income derived from credit card activities, as defined in this subsection, shall apportion its net income derived from credit card activities in the manner provided in this subsection. Income derived by such taxpayer from sources other than credit card activities shall be apportioned as provided in this chapter.
(2) The numerator of the apportionment fraction shall consist of the Connecticut receipts, as described in subdivision (3) of this subsection. The denominator of the apportionment fraction shall consist of (A) the total amount of interest and fees or penalties in the nature of interest from credit card receivables, (B) receipts from fees charged to card holders, including, but not limited to, annual fees, irrespective of the billing address of the card holder, (C) net gains from the sale of credit card receivables, irrespective of the billing address of the card holder, and (D) all credit card issuer's reimbursement fees, irrespective of the billing address of the card holder.
(3) For purposes of this subsection, "Connecticut receipts" shall be determined by adding (A) interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, including, but not limited to, annual fees, where the billing address of the card holder is in this state and (B) the product of (i) the sum of net gains from the sale of credit card receivables and all credit card issuer's reimbursement fees multiplied by (ii) a fraction, the numerator of which shall be interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, including, but not limited to, annual fees, where the billing address of the card holder is in this state, and the denominator of which shall be the total amount of interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, including, but not limited to, annual fees, irrespective of the billing address of the card holder.
(4) For purposes of this subsection:
(A) "Credit card" means a credit, travel, or entertainment card;
(B) "Receipts" means receipts computed according to the method of accounting used by the taxpayer in the computation of net income;
(C) "Credit card issuer's reimbursement fee" means the fee that a taxpayer receives from a merchant's bank because one of the persons to whom the taxpayer or a related person, as defined in section 12-218b, has issued a credit card has charged merchandise or services to the credit card;
(D) "Net income derived from credit card activities" means (i) interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, including, but not limited to, annual fees, net gains from the sale of credit card receivables, credit card issuer's reimbursement fees, and credit card receivables servicing fees received in connection with credit cards issued by the taxpayer or a related person, as defined in section 12-218b, less (ii) expenses related to such income, to the extent deductible under chapter 208;
(E) "Billing address" shall be presumed to be the location indicated in the books and records of the taxpayer as the address where any notice, statement or bill relating to a card holder is to be mailed, as of the date of such mailing; and
(F) "Credit card activities" means those activities involving the underwriting and approval of credit card relationships or other business activities generally associated with the conduct of business by an issuer of credit cards from which it derives income.
(5) The Commissioner of Revenue Services may adopt regulations, in accordance with chapter 54, to permit a financial service company that is an owner of a financial asset securitization investment trust, as defined in Section 860H(a) of the Internal Revenue Code, to elect to apportion its share of the net income from credit card activities carried on by such trust, and to provide rules for apportioning such share of net income that are consistent with this subsection.
(k) (1) For income years commencing on or after January 1, 2001, the net income of a taxpayer which is primarily engaged in activities that, in accordance with the North American Industrial Classification System, United States manual, United States Office of Management and Budget, 1997 edition, would be included in Sector 31, 32 or 33, shall be apportioned within and without the state by means of the apportionment fraction described in subdivision (2) of this subsection provided, in the income year commencing on January 1, 2001, each such taxpayer shall not take such apportionment fraction into account for purposes of installment payments on estimated tax under section 12-242d for calendar quarters ending prior to July 1, 2001, but shall make such payments in accordance with the apportionment fraction applicable to the income year commencing January 1, 2000.
(2) The numerator of the apportionment fraction shall consist of the taxpayer's gross receipts, as described in subdivision (3) of subsection (c) of this section, which are assignable to the state, as provided in subdivision (3) of subsection (c) of this section. The denominator of the apportionment fraction shall consist of the taxpayer's total gross receipts, as described in subdivision (3) of subsection (c) of this section, whether or not assignable to the state.
(3) Any taxpayer which is described in subdivision (1) of this subsection and seventy-five per cent or more of whose total gross receipts, as described in subdivision (3) of subsection (c) of this section, during the income year are from the sale of tangible personal property directly, or in the case of a subcontractor, indirectly to the United States government may elect, on or before the due date or, if applicable, the extended due date, of its corporation business tax return for the income year, to apportion its net income within and without the state by means of the apportionment fraction described in subsection (c) of this section. The election, if made by the taxpayer, shall be irrevocable for, and applicable for, five successive income years.
(l) (1) For income years commencing on or after October 1, 2001, any broadcaster which is taxable both within and without this state shall apportion its net income derived from the broadcast of video or audio programming, whether through the public airwaves, by cable, by direct or indirect satellite transmission or by any other means of communication, through an over-the-air television or radio network, through a television or radio station or through a cable network or cable television system and, if such broadcaster is a cable network, all net income derived from activities related to or arising out of the foregoing, including, but not limited to, broadcasting, entertainment, publishing, whether electronically or in print, electronic commerce and licensing of intellectual property created in the pursuit of such activities, by means of the apportionment fraction described in subdivision (3) of this subsection, and any eligible production entity which is taxable both within and without this state shall apportion its net income derived from video or audio programming production services by means of the apportionment fraction described in subdivision (4) of this subsection.
(2) For purposes of this subsection:
(A) "Video or audio programming" means any and all performances, events or productions, including without limitation news, sporting events, plays, stories and other entertainment, literary, commercial, educational or artistic works, telecast or otherwise made available for video or audio exhibition through live transmission or through the use of video tape, disc or any other type of format or medium;
(B) A "subscriber" to a cable television system is an individual residence or other outlet which is the ultimate recipient of the transmission;
(C) "Telecast" or "broadcast" means the transmission of video or audio programming by an electronic or other signal conducted by radiowaves or microwaves, by wires, lines, coaxial cables, wave guides or fiber optics, by satellite transmissions directly or indirectly to viewers or listeners or by any other means of communication;
(D) "Eligible production entity" means a corporation which provides video or audio programming production services and which is affiliated, within the meaning of Sections 1501 to 1504 of the Internal Revenue Code and the regulations promulgated thereunder, with a broadcaster;
(E) "Release" or "in release" means the placing of video or audio programming into service. A video or audio program is placed into service when it is first broadcast to the primary audience for which the program was created. For example, video programming is placed in service when it is first publicly telecast for entertainment, educational, commercial, artistic or other purpose. Each episode of a television or radio series is placed in service when it is first broadcast; and
(F) "Broadcaster" means a corporation that is engaged in the business of broadcasting video or audio programming, whether through the public airwaves, by cable, by direct or indirect satellite transmission or by any other means of communication, through an over-the-air television or radio network, through a television or radio station or through a cable network or cable television system, and that is primarily engaged in activities that, in accordance with the North American Industry Classification System, United States manual, 1997 edition, are included in industry group 5131 or 5132.
(3) (A) Except as provided in subparagraph (B) of this subdivision with respect to the determination of the apportionment fraction for net income derived from the activities referred to in subdivision (1) of subsection (l) of this section, the numerator of the apportionment fraction for a broadcaster shall consist of the broadcaster's gross receipts, as described in subdivision (3) of subsection (c) of this section, which are assignable to the state, as provided in subdivision (3) of subsection (c) of this section. Except as provided in subparagraph (C) of this subdivision with respect to the determination of the apportionment fraction for the net income derived from the activities referred to in subdivision (1) of subsection (l) of this section, the denominator of the apportionment fraction for a broadcaster shall consist of the broadcaster's total gross receipts, as described in subdivision (3) of subsection (c) of this section, whether or not assignable to the state.
(B) The numerator of the apportionment fraction for a broadcaster shall include the gross receipts of the taxpayer from sources within this state determined as follows:
(i) Gross receipts, including without limitation, advertising revenue, affiliate fees and subscriber fees, received by a broadcaster from video or audio programming in release to or by a broadcaster for telecast which is attributed to this state.
(ii) Gross receipts, including without limitation, advertising revenue, received by an over-the-air television or radio network or a television or radio station from video or audio programming in release to or by such network or station for telecast shall be attributed to this state in the same ratio that the audience for such over-the-air network or station located in this state bears to the total audience for such over-the-air network or station inside and outside of the United States. For purposes of this subparagraph, the audience shall be determined either by reference to the books and records of the taxpayer or by reference to the applicable year's published rating statistics, provided the method used by the taxpayer is consistently used from year to year for such purpose and fairly represents the taxpayer's activity in the state.
(iii) Gross receipts including, without limitation, advertising revenue, affiliate fees and subscriber fees, received by a cable network or a cable television system from video or audio programming in release to or by such cable network or cable television system for telecast and other receipts that are derived from the activities referred to in subdivision (1) of subsection (l) of this section shall be attributed to this state in the same ratio that the subscribers for such cable network or cable television system located in this state bears to the total of such subscribers of such cable network or cable television system inside and outside of the United States. For purpose of this subparagraph, the number of subscribers of a cable network shall be measured by reference to the number of subscribers of cable television systems that are affiliated with such network and that receive video or audio programming of such network. For purposes of this subparagraph, the number of subscribers of a cable television system shall be determined either by reference to the books and records of the taxpayer or by reference to the applicable year's published rating statistics located in published surveys, provided the method used by the taxpayer is consistently used from year to year for such purpose and fairly represents the taxpayer's activities in the state.
(C) The denominator of the apportionment fraction of a broadcaster shall include gross receipts of the broadcaster that are derived from the activities referred to in subdivision (1) of subsection (l) of this section, whether or not assignable to the state.
(4) (A) Except as provided in subparagraph (B) of this subdivision, with respect to the determination of the apportionment fraction for net income derived from video or audio programming production services, the numerator of the apportionment fraction for an eligible production entity shall consist of the eligible production entity's gross receipts, as described in subdivision (3) of subsection (c) of this section, which are assignable to the state, as provided in subdivision (3) of subsection (c) of this section. Except as provided in subparagraph (C) of this subdivision, with respect to the determination of the apportionment fraction for net income derived from video or audio programming production services, the denominator of the apportionment fraction for an eligible production entity shall consist of the eligible production entity's total gross receipts, as described in subdivision (3) of subsection (c) of this section, whether or not assignable to the state.
(B) The numerator of the apportionment fraction for an eligible production entity shall include gross receipts of the entity that are derived from video or audio programming production services relating to events which occur within this state.
(C) The denominator of the apportionment fraction for an eligible production entity shall include gross receipts of the entity that are derived from video or audio programming production services relating to events which occur within or without this state.
(1949 Rev., S. 1899; 1951, 1953, S. 1094d; 1957, P.A. 515, S. 3; 1959, P.A. 147, S. 1; 1961, P.A. 381; 1967, P.A. 586, S. 1; 1969, P.A. 266, S. 1; June, 1969, P.A. 1, S. 14; 1972, P.A. 271, S. 2; P.A. 73-350, S. 9, 27; P.A. 75-501, S. 1, 3; P.A. 77-539, S. 1, 3; P.A. 81-245, S. 3, 4; 81-411, S. 2, 42; P.A. 89-211, S. 24; P.A. 93-403, S. 2, 3; P.A. 96-111, S. 1, 2; 96- 197, S. 5, 11; 96-265, S. 4, 5; P.A. 97-243, S. 10, 67; June 18 Sp. Sess. P.A. 97-4, S. 1, 11; June 18 Sp. Sess. P.A. 97-11, S. 63, 65; P.A. 98-110, S. 14−18, 27; P.A. 99-121, S. 4, 28; P.A. 00-170, S. 25, 42.)
History: 1959 act changed technical language, changed proviso in subdivision (1) re allocation of dividends and interest to state so that allocation dependent on whether and to what extent business is carried on in state, and changed subdivision (2) to apply to goods situated in state at time of, rather than prior to, sale, etc.; 1961 act deleted reference to royalties in subdivision (1), added list of specific inclusions in determining the third fraction, and changed technical language; 1967 act amended Subdiv. (3)(b) to substitute "tangible" for "real" property, and to include in third fraction receipts from sales of tangible property if property delivered or shipped to in-state purchaser regardless of f.o.b. point or other conditions of sale rather than if transactions chiefly negotiated and executed in-state; 1969 acts substituted apportionment for allocation in Subdiv. (3) and changed second fraction to consist of wages, etc. "paid in this state" and specified what "paid in this state" means, replacing previous provision re second fraction and in Subdiv. (2) specified applicability to telephone companies taxable under Sec. 12-214 "for income years beginning on and after January 1, 1971"; 1972 act added provisions re allocation of dividends from DISC or former DISC; P.A. 73-350 deleted provisions re telephone companies in Subdiv. (2) and specifically excluded insurance companies from provisions of section, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 75-501 replaced former provisions setting out general applicability re maintenance of office without the state with new provisions re taxpayers taxable in another state, effective July 3, 1975, and applicable to income years ending on or after that date; P.A. 77-539 included in general applicability provision taxpayers conducting business and taxable in another state; P.A. 81-245 amended Subdiv. (3)(a) to exclude from the numerator and the denominator any gross receipts attributable to an international banking facility and amended Subdiv. (3)(b) to exclude from the second apportionment fraction wages, salaries or other compensation attributable to the production of gross income of an international banking facility and to exclude from the third apportionment fraction any gross receipts attributable to an international banking facility, effective upon adoption by the Board of Governors of the Federal Reserve System of amendments to Regulations D and Q pertaining to international banking facilities (adopted June 9, 1981, with an effective date of December 3, 1981); P.A. 81-411 eliminated the procedure for allocation of net income and modified the apportionment formula by increasing the effect of receipts from sales, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 93-403 divided existing section into Subsecs. and incorporated definition of gross receipts with respect to corporations applying the multiple factor apportionment to corporations using the single factor fraction, effective June 29, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 96-111 inserted new provisions re regulated investment companies and securities brokerage services as Subsecs. (f) and (g), respectively, effective May 24, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 96-197 added new provisions re companies that are limited partners in a partnership as Subsec. (h) (enacted as Subsec. (e)), effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 96-265 inserted new provisions re apportionment of net income of motor carriers which transport property for hire as Subsec. (e), effective June 10, 1996, and applicable to income years commencing on or after January 1, 1996 (Revisor's note: Subsec. indicators assigned to new provisions were changed editorially by the Revisors to maintain an orderly progression of section concepts and previously existing Subsec. (e) was designated as Subsec. (i) to retain its logical position at the end of the section); P.A. 97-243 amended Subdiv. (1) of Subsec. (g) to change reference from "subsection" to "section", effective June 24, 1997, and applicable to income years commencing on or after January 1, 1997; June 18 Sp. Sess. P.A. 97-4 added new Subsec. (j) re apportionment of income derived from credit card activities, effective June 30, 1997, and applicable to income years commencing on or after January 1, 1997; June 18 Sp. Sess. P.A. 97-11 changed effective date of June 18 Sp. Sess. P.A. 97-4 but without affecting this section; P.A. 98-110 amended Subsec. (f) to remove election option, effective May 19, 1998 and applicable to income years commencing on or after January 1, 2001, and to make technical changes, effective May 19, 1998 and applicable to income years commencing on or after January 1, 1999, and prior to January 1, 2001, amended Subsec. (g) to remove election option, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999, and amended Subsec. (j) to make section applicable to financial service companies with net income derived from credit card activities and to remove the election option and to make technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 2002; P.A. 99-121 amended Subsec. (h) to revise apportionment provisions for investment partnerships and financial services industry, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 00-170 added Subsec. (k) re apportionment of income by certain manufacturing businesses, applicable to income years commencing on or after January 1, 2001, added Subsec. (l) re apportionment of income by certain broadcasting businesses, applicable to income years commencing on or after October 1, 2001, and made a conforming change in Subsec. (c), effective May 26, 2000.
See Sec. 12-244 re allocation of tax on air carriers.
Dividends received by Connecticut corporation on stock of wholly-owned Canadian corporations carrying on business solely in Canada should be allocated without the state. 122 C. 547. The words "held and owned" include goods of corporation in warehouses and in transit. 132 C. 158, 163. General Assembly has power to impose a tax on a corporation doing business both within and without the state. 135 C. 37. Cited. 179 C. 363, 364, 366, 371. Cited. 196 C. 1, 3, 6. Cited. 202 C. 412, 414−416, 418−423, 425, 426, 428. Cited. Id., 583, 589, 591, 592, 594, 597. Cited. 203 C. 455, 457, 464. Cited. 215 C. 134, 140, 141. Cited. 220 C. 665, 667, 677. Cited. 224 C. 426, 427, 430−433, 435, 436, 439. Section is tax imposition section; any ambiguity must be resolved in favor of taxpayer. 228 C. 137, 139, 141−144. Cited. 232 C. 325, 329−331, 334. Cited. 240 C. 422.
Cited. 17 CA 82−87.
Cited. 41 CS 271−276, 278. Cited. 42 CS 356−358, 363, 369−371. Cited. 43 CS 314, 320, 322, 323, 332−334.
Subdiv. (a):
Cited. 202 C. 412, 415, 417−421, 423−426.
Cited. 15 CS 205; 26 CS 373, 375.
Subdiv. (b):
Subpara. (2) cited. 179 C. 363, 365; 196 C. 1, 3−6. Subpara. (3) cited. 196 C. 1, 4. Determined net income derived from use of tangible property. Id., 583, 589, 593, 594. Subpara. (3) cited. 215 C. 134, 137, 140; Id., 134, 140. Storage contracts fall within the definition of rental arrangements contained in the section; rental payments, "tangible property" and bailments discussed; treatment of payments for use of warehouse storage space as rental payments discussed. 232 C. 325, 326, 329, 331−335.
Subpara. (1) cited. 17 CA 82, 84, 86, 87. Subpara. (2) cited. Id., 82, 84, 85, 87−89, 91, 92. Subpara. (3) cited. Id., 82, 84, 88, 91. Cited. 43 CS 314, 333.
Subdiv. (c):
Cited. 202 C. 412, 415.

(Return to TOC) (Return to Chapters) (Return to Titles)

Sec. 12-218a. Apportionment of tax on insurance company. (a) Except as provided in subsection (b) of this section, any tax imposed on domestic insurance companies by section 12-214 shall be imposed on the base specified for such tax apportioned to this state by multiplying the base by a fraction, the numerator of which shall represent the company's gross direct premiums, as defined in section 12-201, received during the income year for insurance on property or risks located or resident in this state, and the denominator of which shall represent its total gross direct premiums received during the income year from all sources.
(b) If more than fifty per cent of the total gross premiums received during the income year by an insurance company taxable under this chapter consists of reinsurance premiums, any tax imposed by section 12-214 shall be imposed on the specified base apportioned to this state by multiplying such base by a fraction, the numerator of which shall represent the sum of (1) gross direct premiums, as defined in section 12-201, received during the income year for insurance on property or risks located or resident in this state, plus (2) gross reinsurance premiums received during the income year in respect of property or risks located or resident in this state, and the denominator of which shall represent the sum of (A) total gross direct premiums received during the income year from all sources, plus (B) total gross reinsurance premiums received during the income year from all sources. For purposes of this subsection reinsurance premiums received in respect of property or risks located or resident in this state, whether or not otherwise determinable, may, at the election of the company, be determined either on the basis of the proportion which reinsurance premiums received from domestic insurance companies bear to reinsurance premiums received from all sources or, alternatively, on the basis of the proportion which the aggregate amount of gross direct premiums received for insurance on property or risks located or resident in this state by all the companies which ceded reinsurance to the taxpayer in the income year bears to the aggregate amount of gross direct premiums received by said companies from all sources.
(P.A. 73-350, S. 10, 27.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973.

(Return to TOC) (Return to Chapters) (Return to Titles)

Sec. 12-218b. Apportionment of net income of financial service companies. (a) For purposes of this section:
(1) "Administrative services" includes, but is not limited to, clerical, fund or investment or account holder accounting, participant record keeping, transfer agency, bookkeeping, data processing, custodial, internal auditing, legal and tax services performed for an investment entity, pension fund or retirement account but only if the provider of such service or services during the income year in which such service or services are provided also provides, or is a related person of a person that provides, management or distribution services to such an investment entity, pension fund or retirement account.
(2) "Billing address" means the location indicated in the books and records of the taxpayer or, as applicable, the investment entity, pension fund or retirement fund on the first day of the taxable year or on such later date in the taxable year when the relationship with the customer or, in the case of an investment entity, pension fund or retirement account, investor or participant began as the address where any notice, statement or bill relating to a customer's, investor's or participant's account is mailed.
(3) "Borrower located in this state" means (A) a borrower that is engaged in a trade or business which maintains its commercial domicile in this state, or (B) a borrower that is not engaged in a trade or business whose billing address is in this state.
(4) "Commercial domicile" means the headquarters of the trade or business, that is, the place from which the trade or business is principally managed and directed.
(5) "Distribution services" means the services of advertising, servicing, marketing or selling interests in an investment entity, pension fund or retirement account, but, in the case of advertising, servicing or marketing interests, only where such service is performed by a person that is, or, in the case of a closed-end company, was, either engaged in the service of selling such interests or a related person of a person that is engaged in the service of selling such interests.
(6) "Financial service company" means:
(A) Any corporation or other business entity registered under the laws of any state as a bank holding company or registered under the federal Bank Holding Company Act of 1956, as amended, or registered as a savings and loan holding company under the federal National Housing Act, as amended;
(B) A national bank organized and existing as a national bank association pursuant to the provisions of the National Bank Act, 12 USC Section 21 et seq.;
(C) A savings association or federal savings bank, as defined in the Federal Deposit Insurance Act, 12 USC 1813(b)(1);
(D) Any bank, banking association, trust company, savings and loan association or thrift institution incorporated or organized under the laws of any state, or any other corporation or other business entity, the deposits or accounts of which are insured under the Federal Deposit Insurance Act or by the Federal Deposit Insurance Corporation;
(E) Any corporation organized under the provisions of 12 USC 611 to 631;
(F) Any foreign bank that has an agency or branch, as defined in 12 USC 3101;
(G) A credit union organized under the laws of any state the loan assets of which exceed fifty million dollars as of the first day of its income year;
(H) A production credit association organized under the federal Farm Credit Act of 1933, all of whose stock held by the Federal Production Credit Corporation has been retired;
(I) Any company whose voting stock is more than fifty per cent owned, directly or indirectly, by any person described in subparagraphs (A) to (H), inclusive, of this subdivision or by an insurance company, other than an insurance company or a company that has more than fifty per cent of its gross income from one or more of the following sources other than from sales to a related person: Manufacturing, construction, mining, transportation and public utilities, retail or wholesale trade, other than the retail or wholesale delivery of the services described in subparagraph (J) of this subdivision, or agriculture, forestry and fishing;
(J) (i) Any company, other than an insurance company or a real estate broker, which derives fifty per cent or more of its gross income from one or more of the following sources or activities: Loans; letters of credit and acceptance of drafts; underwriting, purchase, placement, sale or brokerage of securities, commodities contracts or other financial instruments or contracts on its own account or for the account of others; exchanges, exchange clearinghouses and other services allied with the exchange of securities or commodities contracts; investment advisory or management services; investment banking services, corporate trust and escrow services; securities information processing; securities and financial rating agency services; transfer agent, clearing agent, securities custodial and depository services; securities exchange or quotation services; any of the services described in subsection (f) of section 12-218; any of the services described in subsection (g) of section 12-218; management, distribution or administrative services to or on behalf of an investment entity; management, distribution or administrative services to or on behalf of pension funds or retirement accounts; leasing or acting as an agent, broker or adviser in connection with leasing real and personal property that is the functional equivalent of an extension of credit and that transfers substantially all of the benefits and risks incident to the ownership of property, including any direct financing lease or leverage lease that meets the criteria of Financial Accounting Standards Board Statement No. 13, "Accounting for Leases" or any other lease that is accounted for as a financing by a lessor under generally accepted accounting principles; activities of a Morris plan company; credit card activities; third party insurance administration services, claim administration services, claim adjusting services, premium billing and collection services, or employee benefit plan administration services; insurance underwriting or policy issuance services; actuarial services; trust company services; financial planning services; insurance brokerage services; or risk management services;
(ii) Any company which derives fifty per cent or more of its gross income from an activity in which a person described in subparagraphs (B) to (H), inclusive, of this subdivision is authorized to transact;
(iii) Whether a company is classified as a financial service company for any income year by virtue of this subparagraph shall be determined based upon the sources of such taxpayer's gross income, other than gross income from nonrecurring, extraordinary transactions, for such income year, except that any taxpayer classified as a financial service company solely by virtue of this subparagraph for any income year shall continue to be classified as a financial service company until the second consecutive year the taxpayer would not otherwise qualify as a financial service company.
(K) (i) Any person described in subparagraph (J) of this subdivision may petition the commissioner to apportion its income without regard to the provisions of this section upon such person proving, by clear and convincing evidence, that the income-producing activity of such person is not in substantial competition with a financial service company without regard to subparagraph (I) of this subdivision.
(ii) Any person may petition the commissioner to apportion its income in accordance with the provisions of this section upon such person proving by clear and convincing evidence, that the income-producing activity is substantially similar to the income-producing activities of a financial service company without regard to subparagraph (I) of this subdivision.
(7) "Gross rents" means the actual sum of money or other consideration payable for the use or possession of property, including, but not be limited to, (A) any amount payable for the use or possession of real property or tangible property whether designated as a fixed sum of money or as a percentage of receipts, profits, or otherwise, (B) any amount payable as additional rent or in lieu of rent, such as interest, taxes, insurance, repairs or any other amount required to be paid by the terms of a lease or other arrangement, and (C) a proportionate part of the cost of any improvement to real property made by or on behalf of the taxpayer which reverts to the owner or lessor upon termination of a lease or other arrangement. The amount to be included in gross rents is the amount of amortization or depreciation allowed in computing the taxable income base for the income year, provided where a building is erected on leased land by or on behalf of the taxpayer, the value of the land is determined by multiplying the gross rent by eight and the value of the building is determined in the same manner as if owned by the taxpayer. "Gross rents" shall not include reasonable amounts payable as separate charges for water and electric service furnished by the lessor, reasonable amounts payable as service charges for janitorial services furnished by the lessor, reasonable amounts payable to storage, provided such amounts are payable for space not designated and not under the control of the taxpayer, and that portion of any rental payment which is applicable to the space subleased from the taxpayer and not used by it.
(8) "Insurance company" means any corporation, limited liability company, association, partnership or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, including a receiver, trustee or other fiduciary of any insurance company when the context reasonably permits.
(9) "Investment entity" means (A) an investment partnership, a real estate investment trust, as defined in Section 856 of the Internal Revenue Code, a real estate mortgage investment conduit, as defined in Section 860D of the Internal Revenue Code, a financial asset securitization investment trust, as defined in Section 860L of the Internal Revenue Code, or a similar investment entity which is exempt from, or is not subject to, federal income tax, or (B) a separate account of an insurance company.
(10) "Loan" means any extension of credit resulting from direct negotiations between the taxpayer and its customer, or the purchase or receipt, in whole or in part, of such extension of credit from another. Loans include participations, syndications, and leases treated as loans for federal income tax purposes. Loans shall not include: (A) Futures or forward contracts; (B) options; (C) notional principal contracts such as swaps; (D) credit card receivables, including purchased credit card relationships; (E) non-interest-bearing balances due from depository institutions; (F) cash items in the process of collection; (G) federal funds sold; (H) securities purchased under agreements to resell; (I) assets held in a trading account; (J) securities; (K) interests in a real estate mortgage investment conduit, as defined in Section 860D of the Internal Revenue Code or other mortgage-backed or asset-backed security; and (L) other similar items.
(11) "Loan secured by real property" means that fifty per cent or more of the aggregate value of the collateral used to secure a loan or other obligation, when valued at fair market value as of the time the original loan or obligation was incurred, was real property.
(12) "Management services", when performed on behalf of an investment entity, pension fund or retirement account, means the rendering of investment advice directly or indirectly to an investment entity, pension fund or retirement account, making determinations as to when sales and purchases of property are to be made on behalf of the investment entity, pension fund or retirement account, or the selling or purchasing of property constituting assets of an investment entity, pension fund or retirement account and related activities, but only where such activity or activities are performed (A) pursuant to a contract with the investment entity, pension fund or retirement account, (B) for a person that has entered into such contract with the investment entity, pension fund or retirement account, or (C) for a person that is a related person of a person that has entered into such contract with an investment entity, pension fund or retirement account;
(13) "Participation" means an extension of credit in which an undivided ownership interest is held on a pro rata basis in a single loan or pool of loans and related collateral. In a loan participation, the credit originator initially makes the loan and then subsequently resells all or a portion of it to other lenders. The participation may or may not be known to the borrower.
(14) "Pension fund or retirement fund" means any fund, trust, plan, account, annuity or contract referred to in subsection (a) of section 52-321a, or other fund, trust, plan, account, annuity or contract established pursuant to the Internal Revenue Code or any other federal or state statute, including, but not limited to, funds held in an insurance company general or separate account, which is designed to provide pension or retirement benefits.
(15) "Principal base of operations", with respect to transportation property, means the place of more or less permanent nature from which said property is regularly directed or controlled.
(16) "Real property owned" and "tangible personal property owned" means real and tangible personal property, respectively, (A) on which the taxpayer may claim depreciation for federal income tax purposes, or (B) property to which the taxpayer holds legal title and on which no other person may claim depreciation for federal income tax purposes or could claim depreciation if subject to federal income tax. Real and tangible personal property does not include coin, currency or property acquired in lieu of or pursuant to a foreclosure.
(17) "Regular place of business" means an office at which the taxpayer carries on its business in a regular and systematic manner and which is continuously maintained, occupied and used by employees of the taxpayer.
(18) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, or (D) a member of the same controlled group as the taxpayer. For purposes of this subdivision, "control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code other than paragraph (3) of said section.
(19) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States or any foreign country.
(20) "Syndication" means an extension of credit in which two or more persons fund and each person is at risk only up to a specified percentage of the total extension of credit or up to a specified dollar amount.
(21) "Transportation property" means vehicles and vessels capable of moving under their own power, such as aircraft, trains, water vessels and motor vehicles, as well as any equipment or containers attached to such property, such as rolling stock, barges, trailers or the like.
(b) (1) Except as otherwise specifically provided, a financial service company whose business activity is taxable within this state, whether or not it is taxable outside this state, shall apportion its net income from business carried on within this state in accordance with this section. The net income of a financial service company shall be apportioned to this state by multiplying such income by the receipts factor. The receipts factor for a financial service company is a fraction, the numerator of which is the receipts of the taxpayer in this state during the income year and the denominator of which is the receipts of the taxpayer within and without this state during the income year. The method of calculating receipts for purposes of the denominator is the same as the method used in determining receipts for purposes of the numerator.
(2) Any receipts attributable to an international banking facility, as defined in section 12-217, shall not be included in the numerator or denominator of the receipts factor. In lieu of such exclusion of receipts attributable to an international banking facility, the taxpayer, pursuant to the provisions of subdivision (3) of this subsection, may, on or before the due date or, if applicable, the extended due date, of its corporation business tax return, make an election on its corporation business tax return, to exclude receipts attributable to an international banking facility from the numerator of its receipts factor and to include such receipts in the denominator of its receipts factor.
(3) If the taxpayer makes the election under subdivision (2) of this subsection, the taxpayer may not, in arriving at its net income, deduct the gross income attributable to the international banking facility from its gross income, but expenses or losses attributable to the international banking facility, to the extent deductible under the Internal Revenue Code, may be deducted from its gross income. The election, if made by the taxpayer, shall be irrevocable for, and applicable for, five successive income years.
(c) The numerator of the receipts factor includes receipts from the lease or rental of real property owned by the taxpayer if the property is located within this state and receipts from the sublease of real property if the property is located within this state.
(d) (1) Except as described in subdivision (2) of this subsection, the numerator of the receipts factor includes receipts from the lease or rental of tangible personal property owned by the taxpayer if the property is located within this state when it is first placed in service by the lessee.
(2) Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property is used in this state. The extent an aircraft will be deemed to be used in this state and the amount of receipts that is to be included in the numerator of this state's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft. If the extent of the use of any transportation property within this state cannot be determined, the property shall be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle shall be deemed to be used wholly in the state in which it is registered.
(e) (1) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within this state. If the property is located both within this state and one or more other states, the receipts described in this subsection are included in the numerator of the receipts factor if more than fifty per cent of the fair market value of the real property is located within this state. If more than fifty per cent of the fair market value of the real property is not located within any one state, the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in this state.
(2) The determination of whether the real property securing a loan is located within this state shall be made as of the time the original agreement was made and all subsequent substitutions of collateral shall be disregarded.
(f) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower is located in this state.
(g) (1) The numerator of the receipts factor includes net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of Section 1286 of the Internal Revenue Code.
(2) The amount of net gains, but not less than zero, from the sale of loans secured by real property included in the numerator is determined by multiplying such net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
(3) The amount of net gains, but not less than zero, from the sale of loans not secured by real property included in the numerator is determined by multiplying such net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (f) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
(h) (1) The numerator of the receipts factor includes loan servicing fees derived from loans secured by real property multiplied by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
(2) The numerator of the receipts factor includes loan servicing fees derived from loans not secured by real property multiplied by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (f) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
(3) In circumstances in which the taxpayer receives loan servicing fees for servicing either the secured or the unsecured loans of another, the numerator of the receipts factor shall include such fees if the borrower is located in this state.
(i) (1) Interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities shall be included in the receipts factor. Investment assets and activities and trading assets and activities include, but are not limited to, investment securities, trading account assets, federal funds, securities purchased and sold under agreements to resell or repurchase, options, futures contracts, forward contracts, notional principal contracts such as swaps, equities, and foreign currency transactions. With respect to the investment and trading assets and activities described in subparagraphs (A) and (B) of this subdivision, the receipts factor shall include the amounts described in said subparagraphs (A) and (B).
(A) The receipts factor shall include the amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements.
(B) The receipts factor shall include the amount by which interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends and losses from such assets and activities.
(2) The numerator of the receipts factor includes interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities described in subdivision (1) of this subsection that are attributable to this state.
(A) The amount of interest, dividends, net gains, but not less than zero, and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (A) of subdivision (1) of this subsection from such funds and such securities by a fraction, the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.
(C) The amount of interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and foreign currency transactions, but excluding amounts described in subparagraph (A) or (B) of this subdivision, attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (B) of subdivision (1) of this subsection by a fraction, the numerator of which is the average value of such trading assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
(D) For purposes of this subdivision, the average value of property owned by the taxpayer is computed on an annual basis by adding the value of the property on the first day of the income year and the value on the last day of the income year and dividing the sum by two. If averaging on this basis does not properly reflect average value, the commissioner may require averaging on a more frequent basis. The taxpayer may elect to average on a more frequent basis. When averaging on a more frequent basis is required by the commissioner or is elected by the taxpayer, the same method of valuation must be used consistently by the taxpayer with respect to property within and without this state and on all subsequent returns unless the taxpayer receives prior permission from the commissioner or the commissioner requires a different method of determining average value.
(3) In lieu of using the method set forth in subdivision (2) of this subsection, the taxpayer may elect, or the commissioner may require in order to fairly represent the business activity of the taxpayer in this state, the use of the method set forth in this subdivision.
(A) The amount of interest, dividends, net gains, but not less than zero, and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the gross income from such assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
(B) The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (A) of subdivision (1) of this subsection from such funds and such securities by a fraction, the numerator of which is the gross income from such funds and such securities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such funds and securities.
(C) The amount of interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and foreign currency transactions, but excluding amounts described in subparagraph (A) or (B) of this subdivision, attributable to this state and included in the numerator is determined by multiplying the amount described in subparagraph (B) of subdivision (1) of this subsection by a fraction, the numerator of which is the gross income from such trading assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
(4) If the taxpayer elects or is required by the commissioner to use the method set forth in subdivision (3) of this subsection, it shall use this method on all subsequent returns unless the taxpayer receives prior permission from the commissioner to use, or the commissioner requires a different method.
(5) The taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this state by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this state. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one regular place of business and one such regular place of business is in this state and one such regular place of business is outside this state, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the commercial domicile of the taxpayer.
(j) (1) The numerator of the receipts factor includes receipts received for management, distribution and administrative services performed on behalf of an investment entity in an amount equal to the product of such receipts for the income year multiplied by a fraction (A) the numerator of which shall be the average of (i) the fair market value of the interests in the investment entity issued and outstanding on the first day of such investment entity's taxable year for federal income tax purposes, which ends within or at the same time as the income year of the financial service company, that are owned by investors in such investment entity if the billing address of such investors is in this state, and (ii) the fair market value of the interests in the investment entity issued and outstanding on the last day of such investment entity's taxable year for federal income tax purposes, which ends within or at the same time as the income year of the financial service company, that are owned by investors in such investment entity if the billing address of such investors is in this state; and (B) the denominator of which shall be the average of the fair market value of the interests in the investment entity issued and outstanding that are owned by investors in such investment entity on such dates.
(2) The numerator of the receipts factor includes receipts received for management, distribution and administrative services performed on behalf of a pension fund or retirement account in an amount equal to the product of such receipts for the income year multiplied by a fraction (A) the numerator of which shall be the average of (i) the number of participants with an interest in the pension fund or retirement account on the first day of the pension fund or retirement account taxable year, for federal income tax purposes, which ends within or at the same time as the income year of the financial service company, whose billing address is in this state, and (ii) the number of participants with an interest in the pension fund or retirement account on the last day of the pension fund or retirement account taxable year, for federal income tax purposes, which ends within or at the same time as the income year of the financial service company, whose billing address is in this state; and (B) the denominator of which shall be the total number of participants with an interest in the pension fund or retirement account on such dates. In lieu of using the billing addresses of the participants with an interest in the pension fund or retirement account as provided in this subdivision, the taxpayer may elect to determine receipts in the manner provided for in this subsection based upon the average of the fair market value of funds under management in each income year allocated to the commercial domicile of the sponsor of the pension fund or retirement account and, where there is no sponsor for a particular pension fund or retirement account, the billing address of the participant. The election, if made by the taxpayer, shall be irrevocable for, and applicable for, five successive income years and shall be applicable to all receipts from the rendering of management, distribution or administrative services performed for any pension fund or retirement account.
(3) In the case of a separate account of an insurance company, to the extent that both subdivisions (1) and (2) of this subsection may be applicable, then subdivision (2) shall apply.
(k) This section shall not apply to net income from services or activities described in subsection (f), (g) or (j) of section 12-218 which income shall be apportioned in accordance with said subsection (f), (g) or (j), whether or not the taxpayer is taxable outside this state, or, for income years commencing prior to January 1, 2002, in the case of net income from activities described in said subsection (j) that is earned by a taxpayer that is either not eligible to make the election described in said subsection (j) or does not make the election described in said subsection (j) which income shall be apportioned in accordance with subsection (b) of said section 12-218.
(l) For all other receipts not otherwise sourced by this subsection, the numerator of the receipts factor includes all other receipts if the billing address of the customer is in this state; otherwise the numerator will include all other receipts pursuant to the provisions of section 12-218.
(P.A. 98-110, S. 11, 27; P.A. 99-121, S. 5, 28.)
History: P.A. 98-110 effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 99-121 amended Sudiv. (12) of Subsec. (a) to limit "management services" to when performed on behalf of an investment entity, pension fund or retirement account, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999.

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Sec. 12-218c. Restrictions on the deductibility of certain intangible expenses and interest expenses with a related member. (a) As used in this section:
(1) "Affiliated group" has the same meaning as in Section 1504 of the Internal Revenue Code.
(2) "Intangible expenses and costs" includes (A) expenses, losses and costs for, related to, or in connection directly or indirectly with the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property to the extent such amounts are allowed as deductions or costs in determining taxable income before operating loss deduction and special deductions for the taxable year under the Internal Revenue Code; (B) losses related to or incurred in connection directly or indirectly with factoring transactions or discounting transactions; (C) royalty, patent, technical and copyright fees; (D) licensing fees; and (E) other similar expenses and costs.
(3) "Intangible property" means patents, patent applications, trade names, trademarks, service marks, copyrights and similar types of intangible assets.
(4) "Interest expenses and costs" means amounts directly or indirectly allowed as deductions under Section 163 of the Internal Revenue Code for purposes of determining taxable income under the Internal Revenue Code to the extent such expenses and costs are directly or indirectly for, related to, or in connection with the direct or indirect acquisition, maintenance, management, ownership, sale, exchange or disposition of intangible property.
(5) "Related member" means a person that, with respect to the taxpayer during all or any portion of the taxable year, is a related entity, as defined in this subsection, a component member as defined in Section 1563(b) of the Internal Revenue Code, or is a person to or from whom there is attribution of stock ownership in accordance with Section 1563(e) of the Internal Revenue Code.
(6) "Related entity" means (A) a stockholder who is an individual, or a member of the stockholder's family enumerated in Section 318 of the Internal Revenue Code, if the stockholder and the members of the stockholder's family own, directly, indirectly, beneficially or constructively, in the aggregate, at least fifty per cent of the value of the taxpayer's outstanding stock; (B) a stockholder, or a stockholder's partnership, limited liability company, estate, trust or corporation, if the stockholder and the stockholder's partnerships, limited liability companies, estates, trusts and corporations own directly, indirectly, beneficially or constructively, in the aggregate, at least fifty per cent of the value of the taxpayer's outstanding stock; or (C) a corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the taxpayer owns, directly, indirectly, beneficially or constructively, at least fifty per cent of the value of the corporation's outstanding stock. The attribution rules on Section 318 of the Internal Revenue Code shall apply for purposes of determining whether the ownership requirements of this subdivision have been met.
(b) For purposes of computing its net income under section 12-217 a corporation shall add back otherwise deductible interest expenses and costs and intangible expenses and costs directly or indirectly paid, accrued or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions with, one or more related members.
(c) (1) The adjustments required in subsection (b) of this section shall not apply if the corporation establishes by clear and convincing evidence that the adjustments are unreasonable, or the corporation and the Commissioner of Revenue Services agree in writing to the application or use of an alternative method of apportionment under section 12-221a. Nothing in this subdivision shall be construed to limit or negate the commissioner's authority to otherwise enter into agreements and compromises otherwise allowed by law.
(2) The adjustments required in subsection (b) of this section shall not apply to such portion of interest expenses and costs and intangible expenses and costs that the corporation can establish by the preponderance of the evidence meets both of the following: (A) The related member during the same income year directly or indirectly paid, accrued or incurred such portion to a person who is not a related member, and (B) the transaction giving rise to the interest expenses and costs or the intangible expenses and costs between the corporation and the related member did not have as a principal purpose the avoidance of any portion of the tax due under chapter 208.
(3) The adjustments required in subsection (b) of this section shall apply except to the extent that increased tax, if any, attributable to such adjustments would have been avoided if both the corporation and the related member had been eligible to make and had timely made the election to file a combined return under subsection (a) of section 12-223a.
(d) Nothing in this section shall require a corporation to add to its net income more than once any amount of interest expenses and costs or intangible expenses and costs that the corporation pays, accrues or incurs to a related member described in subsection (b) of this section.
(e) Nothing in this section shall be construed to limit or negate the commissioner's authority to make adjustments under section 12-221a or 12-226a.
(P.A. 98-110, S. 20, 27.)
History: P.A. 98-110 effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999.

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Sec. 12-219. Additional tax in the amount by which alternative computations exceed tax under section 12-214. Minimum tax. (a)(1) Each company subject to the provisions of this part shall pay for the privilege of carrying on or doing business within the state, the larger of the tax, if any, imposed by section 12-214 and the tax calculated under this subsection. The tax calculated under this section shall be a tax of three and one-tenth mills per dollar for each income year of the amount derived (A) by adding (i) the average value of the issued and outstanding capital stock, including treasury stock at par or face value, fractional shares, scrip certificates convertible into shares of stock and amounts received on subscriptions to capital stock, computed on the balances at the beginning and end of the taxable year or period, the average value of surplus and undivided profit computed on the balances at the beginning and end of the taxable year or period, and (ii) the average value of all surplus reserves computed on the balances at the beginning and end of the taxable year or period, (B) by subtracting from the sum so calculated (i) the average value of any deficit carried on the balance sheet computed on the balances at the beginning and end of the taxable year or period, and (ii) the average value of any holdings of stock of private corporations including treasury stock shown on the balance sheet computed on the balances at the beginning and end of the taxable year or period, and (C) by apportioning the remainder so derived between this and other states under the provisions of section 12-219a, provided in no event shall the tax so calculated exceed one million dollars or be less than two hundred fifty dollars. (2) For purposes of this subsection, in the case of a new domestic company, the balances at the beginning of its first fiscal year or period shall be the balances immediately after its organization or immediately after it commences business operations, whichever is earlier; and in the case of a foreign company, the balances at the beginning of its first fiscal year or period in which it becomes liable for the filing of a return in this state shall be the balances as established at the beginning of the fiscal year or period for tax purposes. In the case of a domestic company dissolving or limiting its existence, the balances at the end of the fiscal year or period shall be the balances immediately prior to the final distribution of all its assets; and in the case of a foreign company filing a certificate of withdrawal, the balances at the end of the fiscal year or period shall be the balances immediately prior to the withdrawal of all of its assets. When a taxpayer has carried on or had the right to carry on business within the state for eleven months or less of the income year, the tax calculated under this subsection shall be reduced in proportion to the fractional part of the year during which business was carried on by such taxpayer. The tax calculated under this subsection shall, in no case, be less than two hundred fifty dollars for each income year. The taxpayer shall report the items set forth in this subsection at the amounts at which such items appear upon its books; provided, when, in the opinion of the Commissioner of Revenue Services, the books of the taxpayer do not disclose a reasonable valuation of such items, the commissioner may require any additional information which may be necessary for a reasonable determination of the tax calculated under this subsection and shall, on the basis of the best information available, calculate such tax and notify the taxpayer thereof.
(b) (1) With respect to income years commencing on or after January 1, 1989, and prior to January 1, 1992, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to twenty per cent of the additional tax so calculated for such income year, without reduction of the additional tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.
(2) With respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to ten per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.
(c) The tax imposed by this section shall be assessed and collected and be first applicable at the time or times herein provided for the tax measured by net income. This section shall not apply to insurance companies, real estate investment trusts, regulated investment companies, interlocal risk management agencies formed pursuant to chapter 113a or financial service companies, as defined in section 12-218b.
(1949 Rev., S. 1900; 1951, 1953, June, 1955, S. 1096d; 1957, P.A. 560, S. 2; 649, S. 2; 1959, P.A. 394, S. 2; 1961, P.A. 428, S. 3; 604, S. 3; 1963, P.A. 141; February, 1965, P.A. 461, S. 8; June, 1969, P.A. 1, S. 15; 1971, P.A. 683, S. 2; June, 1971, P.A. 5, S. 112; 1972, P.A. 126, S. 1; 285, S. 7; P.A. 73-350, S. 11, 27; P.A. 75-213, S. 2, 53; P.A. 77-614, S. 139, 610; P.A. 78-121, S. 106, 113; P. A. 80-483, S. 56, 186; P.A. 81-66, S. 2, 5; 81-255, S. 22, 37; 81-411, S. 8, 42; Nov. Sp. Sess. P.A. 81-4, S. 30, 32; P.A. 82-325, S. 3, 7; P.A. 84-546, S. 32, 33, 173; P.A. 85-159, S. 2, 19; 85-469, S. 4, 6; P.A. 86-124, S. 1, 2; 86-132; 86-403, S. 131, 132; P.A. 89-16, S. 2, 31; 89-251, S. 21, 203; P.A. 90-174, S. 1, 3; June Sp. Sess. P.A. 91-3, S. 101, 168; P.A. 93-74, S. 8, 59, 67; May Sp. Sess. P.A. 94-4, S. 7, 85; P.A. 95-160, S. 64, 69; P.A. 96-197, S. 6, 11; P.A. 98-110, S. 19, 27.)
History: 1959 act applied tax to each income year, added reference to deferred and unrealized profits in subdivision (B)(a)(3) and to treasury stock in subdivision (B)(b)(2); 1961 acts raised alternative tax rate from 1.9 mills to 2.5 mills, added exception to minimum tax for banking and financial corporations, and changed technical language; 1963 act added exception for small business investment companies; 1965 act set deadline for two and one-half mill rate to years beginning before January 1, 1966, and raised mill rate to two and five-eighths thereafter, set same deadline for twenty-five dollar minimum tax, raised to thirty dollars thereafter and set same deadline for two per cent tax re banking institutions, raised to two and one-tenth per cent thereafter; 1969 act for two years, January 1, 1969, to January 1, 1971, changed rates above to four mills, forty-five dollars and three and two-tenths per cent respectively; 1971 acts divided section into subsections and made basis for payments, the difference between tax imposed in Sec. 12-214 and tax calculated under Subdivs. (A) and (B) and changed ending dates for temporary increases in rates from 1971 to 1973; 1972 acts included maximum tax for income years beginning on or after January 1, 1972, for "any company, except companies subject to the gross earnings taxes under chapters 211 and 212, which, in arriving at net income ... is entitled to a deduction under section 12-217 for dividends as defined in the federal corporation income tax law" and made temporary increased tax rates the permanent rates; P.A. 73-350 made provisions applicable to years beginning on or after January 1, 1973, increased mill rate from four to four and one-quarter mills and specifically excluded regulated investment companies and real estate investment trusts, deleted par or face value of indebtedness and deferred and unrealized profits from calculation of taxable amount and set maximum and minimum charges of one hundred thousand dollars and fifty dollars, respectively, and changed provisions formerly applicable to companies, "except companies subject to the gross earnings taxes under chapters 211 and 212" applicable to regulated investment companies or real estate investment trusts, set forth process for deriving amount subject to tax and established fifty dollar minimum tax for such companies, increased figures in Subsec. (2)(B) from forty-five to fifty dollars, changed rate for computation of interest and dividends from two per cent to one-eighth of one per cent and excluded insurance companies from provisions of section; P.A. 75-213 changed mill rate for companies other than regulated investment companies and real estate investment trusts from one-quarter mill to thirty-one one-hundredths mill and for regulated investment companies and real estate investment trusts from four-tenths to five-tenths mill, effective July 1, 1975, and applicable to income years commencing on or after January 1, 1975; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-121 deleted reference to private banks in Subsec. (1)(A); P.A. 80-483 deleted reference to building and loan associations in Subsec. (1)(A) and (2)(B); P.A. 81-66 raised mill rate in (1)(A) from .31 mill to 3.1 mills per dollar and increased minimum tax from fifty to one hundred dollars, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-255 added the alternative computation of tax under Subdiv. (B) and increased the minimum tax to two hundred fifty dollars, effective July 1, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-411 added consideration of a loss for the income year in the alternative tax base under Subdiv. (B), and deleted provisions allowing deductions for contributions to retirement plan in determining salaries and other compensation, effective June 18, 1981, and applicable to income years commencing on or after January 1, 1981; Nov. Sp. Sess. P.A. 81-4 deleted Subdiv. (B) in Subsec. (1) re alternative tax (if higher than that in Subdiv. (a)) consisting of fifty per cent of corporation's net income or loss plus salaries and other compensation paid to elected or appointed corporation officers or to shareholders owning more than one per cent of stock at rate of five per cent, amending section accordingly, effective January 27, 1982, and applicable to income years commencing on or after January 1, 1983; P.A. 82-325 changed effective date of Nov. Sp. Sess. P.A. 81-4, but without affecting this section; P.A. 84-546 made technical change, substituting "scrip" for "script" in Subsec. (1); P.A. 85-159 reduced minimum tax to one hundred dollars for income years of corporations commencing on or after January 1, 1985; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 86-124 revised section to conform to the style of the general statutes and amended Subpara. (C) of Subdiv. (1) of Subsec. (a) to increase the maximum tax from one hundred thousand dollars to five hundred thousand dollars, effective May 8, 1986, and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 86-132 deleted provision limiting the types of regulated investment companies or real estate investment trusts to which the provisions concerning those types of companies and trusts applied; P.A. 86-403 changed effective date of P.A. 86-132 from October 1, 1986, to May 23, 1986 and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 89-16 increased the minimum tax from one hundred to two hundred fifty dollars in Subsecs. (a) and (b), and amended Subsec. (c) to impose an additional tax as a percentage of the tax calculated under Subsec. (a) or Subsec. (b), effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A. 89-251 increased the tax imposed under Subsec. (c), as amended by P.A. 89-16, as a percentage of the additional tax calculated under Subsec. (a) or Subsec. (b) from fifteen to twenty per cent of the additional tax, effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-174 amended Subdiv. (2) of Subsec. (a) to provide for a maximum tax under said subdivision of fifty thousand dollars, effective July 1, 1990, and applicable to income years of corporations commencing on or after January 1, 1991; June Sp. Sess. P.A. 91-3 amended (1) Subpara. (C) of Subdiv. (1) of Subsec. (a) to increase the maximum tax from five hundred thousand dollars to one million dollars and (2) Subsec. (c) to provide that the twenty per cent additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a ten per cent additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 deleted Subdiv. (2) in Subsec. (a) with respect to regulated investment company or real estate investment trusts, renumbering Subdiv. (3) accordingly and amended Subsec. (d) to exclude real estate investment trusts and regulated investment trusts from provisions of section, effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; May Sp. Sess. P.A. 94-4 in Subsec. (d) exempted interlocal risk management agencies formed pursuant to chapter 113a, effective June 9, 1994, and applicable to income years commencing on or after January 1, 1980; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-197 amended Subsecs. (a) and (b) to clarify that out-of-state businesses carrying on or doing business in the state are subject to the tax on the capital base and made technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 deleted Subsec. (b) re certain banks, trusts, investment and financing entities, relettered existing Subsecs., excluded financial service companies and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999.
Under former statute, indebtedness did not include indebtedness on which company not personally liable. 122 C. 143. Cited. 122 C. 550; 135 C. 57. Cited. 178 C. 240, 241. Cited. 195 C. 284, 287, 289. Cited. 203 C. 198, 200, 202, 204−207. Cited. 220 C. 665, 673.
Cited. 2 CA 660−662.
Cited 40 CS 77, 81, 86, 88.
Subsec. (1):
Cited. 220 C. 665, 671. Subdiv. (A) cited. Id., 665, 671−673, 676, 680. Subdiv. (B) cited. Id., 665, 673−676, 678−682. Subdiv. (B)(i) cited. Id., 665, 669, 676−679, 681. Subdiv. (B)(ii) cited. Id., 665, 675.
Cited. 40 CS 77, 80.
Subdiv. (A)(b) cited. 2 CA 660−662. Subdiv. (A)(c) cited. 2 CA 660, 662. Subdiv. (A) cited. 203 C. 198, 199, 201, 202, 205−209, 211, 212. Subdiv. (B) (ii) cited. Id., 198, 199, 201, 203, 204, 206, 208−212.
Subdiv. (A)(b) cited. 40 CS 77, 78, 80.

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Sec. 12-219a. Apportionment of tax base in and out of state. Insurance companies excepted. (a) If a taxpayer is taxable both within and without the state, a tax shall be imposed on the base as provided in section 12-219, apportioned on the following basis: (1) The average monthly value of all investments other than stock of private corporations, and all cash, credits and other intangible assets of the taxpayer shall be divided between (A) those having a tax situs within the state and (B) those having a tax situs without the state; (2) the average monthly net book value of the tangible property held and owned by the taxpayer during the income year shall be divided between (A) that held within the state and (B) that held without the state; the numerator of the allocation fraction shall consist of the sum of subparagraph (A) of subdivision (1) of this subsection and subparagraph (A) of subdivision (2) of this subsection, and the denominator shall consist of the sum of subdivisions (1) and (2) of this subsection; which allocation fraction shall be multiplied by the amount of the unallocated tax base as computed under the terms of said section 12-219 to obtain the tax base for such taxpayer. For the purposes of this section, the intangible assets of a company having its principal place of business within the state shall be deemed to have a tax situs within the state unless it can be clearly established that some or all of such assets are held in connection with business conducted during the income year without the state, and a similar rule shall apply to intangible assets of a company having its principal place of business without the state. Such assets shall be reported by the taxpayer at the valuations at which they appear upon its books, provided the Commissioner of Revenue Services shall exercise the powers with respect to such valuations granted him under the terms of said section 12-219. For the purpose of apportionment of the base as provided in said section 12-219, a taxpayer is taxable in another state if in such state such taxpayer conducts business and is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business or a corporate stock tax, or if such state has jurisdiction to subject such taxpayer to such a tax, regardless of whether such state does, in fact, impose such a tax.
(b) (1) Any company that is (A) a limited partner in a partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) not otherwise carrying on or doing business in this state shall apportion the average value of its partnership interest within and without this state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment fraction shall be its proportionate part of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors as if it were a company taxable both within and without this state. However, if the commissioner determines that the company and the partnership are, in substance, parts of a unitary business engaged in a single business enterprise, the company shall be taxed in accordance with the provisions of subdivision (3) of this subsection and not in accordance with the provisions of this subdivision.
(2) Any company that is (A) a limited partner (i) in an investment partnership or (ii) in a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) otherwise carrying on or doing business in this state shall apportion its additional tax base, including the average value of its partnership interest, within and without the state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment factors shall include its proportionate part of the numerator and the denominator of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors, as if it were a company taxable both within and without this state.
(3) Any company that is a general partner in a partnership that does business, owns or leases property or maintains an office within this state shall, whether or not it is otherwise carrying on or doing business in this state, apportion its additional tax base, including the average value of its partnership interest, within and without the state under the provisions of subsection (a) of this section, except that the numerator and the denominator of its apportionment factors shall include its proportionate part of the numerator and the denominator of the partnership's apportionment factors. For purposes of this section, the partnership shall compute its apportionment fraction and the numerator and the denominator of its apportionment factors, as if it were a company taxable both within and without this state.
(c) This section shall not apply to insurance companies.
(P.A. 73-350, S. 12, 27; 73-616, S. 53, 67; P.A. 75-501, S. 2, 3; P.A. 77-539, S. 2, 3; 77-614, S. 139, 610; P.A. 96-197, S. 7, 11.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 73-616 made previous provisions applicable to taxpayer maintaining continuous place of business without the state and provided that entire additional tax base is subject to tax if permanent or continuous place of business not maintained without the state, effective June 1, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 75- 501 made provisions applicable to taxpayer who "is taxable both within and without the state" and defined what is meant by the term "taxable in another state", effective July 3, 1975, and applicable to income years ending on or after that date; P.A. 77-539 included in terms of definition above taxpayers conducting business in another state as well as being subject to taxes; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 96-197 made existing section Subsec. (a) and added new Subsec. (b) re apportionment of net income re companies that are limited partners in a partnership and made technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996.
Cited. 43 CS 42, 44, 46.

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Sec. 12-219b. Election with respect to apportionment of net income. (a) With respect to the taxation under this chapter in income years commencing on or after January 1, 1996, of a company's distributive share as a partner of partnership income or loss in all partnerships in which it is or may become a partner, a company may, on or before the due date, or, if applicable, the extended due date, of its corporation business tax return for its income year beginning during 1996, make an election, on its corporation business tax return for such income year, not to have the provisions of subsection (e) of section 12-218 and subsection (b) of section 12-219a apply. Except as otherwise provided by subsection (b) of this section, the election shall be irrevocable.
(b) If a company makes the election as provided in subsection (a) of this section, such company may revoke such election, on its corporation business tax return and such revocation shall not be effective for any income year beginning before January 1, 2001. The revocation, if any, of such election shall be irrevocable.
(P.A. 96-197, S. 8, 11.)
History: P.A. 96-197 effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996.

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Secs. 12-220 to 12-221. Allocation of minimum tax base. Apportionment of additional tax. Allocation in special cases. Sections 12-220 to 12-221, inclusive, are repealed.
(1949, Rev., S. 1901, 1902; 1951, 1953, S. 1097d; 1957, P.A. 560, S. 3; 1961, P.A. 356; 1967, P.A. 586, S. 2, 3; 1969, P.A. 258, S. 2; 370, S. 1; 1971, P.A. 683, S. 3; P.A. 73-350, S. 13, 27.)

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Sec. 12-221a. Petition for alternative method of apportionment. Regulations. (a) If the method of apportionment prescribed in sections 12-218, 12-218a and 12-219a, as administered by the Commissioner of Revenue Services and applied to the business of any company, unfairly attributes to this state an undue proportion of its net income or minimum tax base, such company may petition for an alternate method of apportionment by filing with its return to the commissioner a statement of its objections and of such other proposed method of apportionment as it believes proper and equitable under the circumstances, accompanied by supporting details and proofs. The commissioner, within a reasonable time thereafter, shall notify the company whether the proposed method is accepted as reasonable and equitable and, if so accepted, shall adjust the return and tax accordingly.
(b) With respect to any company subject to the tax imposed under this chapter, the commissioner, at any time within three years after the due date for the filing of such return, or in the case of a completed return filed after such due date, within three years after the date on which such return was received by the commissioner, which return is based on the method of apportionment provided for in said sections 12-218, 12-218a and 12-219a, may change such method if, in his opinion, such method has operated or will operate so as to subject the company to taxation on a lesser portion of its net income or minimum tax base than is equitably attributable to this state and shall thereupon proceed to assess and collect taxes in accordance with such method as so changed by him. On and after January 1, 1995, the commissioner may change such method only in accordance with regulations establishing standards for such action, which the commissioner may adopt in accordance with the provisions of chapter 54.
(1969, P.A. 258, S. 1; 1971, P.A. 683, S. 4; P.A. 73-350, S. 14, 27; P.A. 77-614, S. 139, 610; P.A. 81-411, S. 3, 42; May Sp. Sess. P.A. 94-4, S. 8, 85; P.A. 95-160, S. 64, 69; P.A. 96-197, S. 9, 11.)
History: 1971 act substituted "additional tax base" for "minimum tax base"; P.A. 73-350 substituted reference to Secs. 12-218a and 12-219a for reference to repealed Sec. 12-220a; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 81-411 deleted reference to allocation, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; May Sp. Sess. P.A. 94-4 divided existing section into Subsecs. (a) and (b) and in Subsec. (b) added provision requiring the adoption of regulations re change in apportionment methods, effective June 9, 1994; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-197 amended Subsecs. (a) and (b) re replace "additional" with "minimum" in reference to the tax base, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996.
Cited. 202 C. 412, 416, 417, 419−422, 424. Cited. 236 C. 156, 171.
Under former section, taxpayer could not, on its own initiative, omit filing the return prescribed by statute and file only a return pursuant to an alternative method which had not yet been accepted or approved by tax commissioner. 26 CS 373, 376, 377. Cited. 41 CS 271−275, 277, 278. Cited. 44 CS 90, 94.

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Sec. 12-222. Annual return. (a) Each company subject to the tax imposed under this part shall render to the commissioner an annual return, signed by one of its principal officers, on forms prescribed or furnished by the commissioner, stating specifically the name of the company and the location of its principal office, the state where organized and the date of organization, the names and locations of all subsidiaries, the amount of its paid-up capital and surplus at the end of the income year, the amount of its undivided profits and reserves at the end of such year, the par value of all indebtedness at the end of such year, the items of gross income received during such year, the deductions permitted by law, the interest and rental payments during such year, the dividend payments and changes in capital, surplus and undivided profits during such year, complete balance sheets at the beginning and end of such year or period and such other facts as the commissioner may require for the purpose of making any computation required by this part.
(b) Such return shall be due on or before the first day of the fourth month next succeeding the end of the income year, or, in the case of an S corporation, on or before the fifteenth day of the fourth month next succeeding the end of the income year.
(c) The commissioner may grant a reasonable extension of time for filing a completed return, if the company files a tentative return and application for extension of time in which to file a completed return, on forms furnished or prescribed by the commissioner, and pays the tax reported to be due on such tentative return on or before the first day of the fourth month next succeeding the end of the income year, or, in the case of an S corporation, on or before the fifteenth day of the fourth month next succeeding the end of the income year. Any additional tax which may be found to be due on the filing of the return as allowed by such extension shall bear interest at the rate of one per cent per month or fraction thereof from the original due date of such tax to the date of actual payment. Notwithstanding the provisions of section 12-229, if the commissioner grants a reasonable extension of time for filing a completed return, no penalty shall be imposed on account of any failure to pay the amount of tax reported to be due on a return within the time specified under the provisions of this chapter if the excess of the amount of tax shown on the return over the amount of tax paid on or before the original due date of such return is no greater than ten per cent of the amount of tax shown on such return, and any balance due shown on such return is remitted with such return.
(d) In any case in which the commissioner believes that it would be advantageous to him in the computation of the tax as imposed by this part, such state return shall be accompanied by a true copy of the last income tax return, if any, made to the Internal Revenue Service.
(e) The amount of tax reported to be due on such return or tentative return shall be due and payable on or before the first day of the fourth month next succeeding the end of the income year, or, in the case of an S corporation, on or before the fifteenth day of the fourth month next succeeding the end of the income year.
(f) Payment shall be made in cash or by check, draft or money order drawn to the order of the Commissioner of Revenue Services.
(1949 Rev., S. 1903; 1955, S. 1098d; 1957, P.A. 560, S. 4; P.A. 77-614, S. 139, 610; P.A. 78-178, S. 1, 2; P.A. 85-381, S. 2; P.A. 87-37; P.A. 90-160, S. 1; P.A. 98-244, S. 7, 35; P.A. 99-121, S. 6, 28.)
History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-178 changed deadline for extension requests from fifteenth day of third month following close of taxable year to ninetieth day following close of taxable year, effective May 17, 1978, and applicable to income years ending after that date; P.A. 85-381 divided section into Subsecs. and (1) deleted "fiduciary" in referring to taxpayers subject to tax under part I of the corporation business tax and (2) provided that the return and tax shall be due before the first day of the fourth month next succeeding the end of the taxpayer's income year and that payment shall be made by cash, check, draft or money order; P.A. 87-37 amended the due date for returns and payment of tax so as to include the last day on which such return or payment is due by substituting "on or before" preceding such date for the word "before" preceding such date; P.A. 90-160 amended Subsec. (a) by deleting the requirement that the annual return for a corporation be rendered under oath and inserted in lieu thereof the requirement that the return be signed by one of the corporation's principal officers; P.A. 98-244 moved due date of corporation business tax return of an S corporation from the first day of the fourth month following the close of the income year to the fifteenth day of the fourth month following the close of the income year, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; P.A. 99-121 amended Subsec.(c) to allow a taxpayer who has been granted an extension to avoid a late payment penalty as long as the balance due is ten per cent or less and is remitted with the corporation business tax return, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999.
Cited. 124 C. 406; 129 C. 664; 135 C. 61.
Subsec. (b):
Cited. 44 CS 90, 92; Id., 126, 130.
Subsec. (c):
Cited. 44 CS 90−92, 98; Id., 126, 130.

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Sec. 12-223. Returns of affiliated corporations. Section 12-223 is repealed.
(1949 Rev., S. 1904; P.A. 73-350, S. 26, 27.)

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Sec. 12-223a. Combined corporation business tax return. (a) Any taxpayer included in a consolidated return with one or more other corporations for federal income tax purposes may elect to file a combined return under this chapter together with such other companies subject to the tax imposed thereunder as are included in the federal consolidated corporation income tax return and such combined return shall be filed in such form and setting forth such information as the Commissioner of Revenue Services may require. Notice of an election made pursuant to the provisions of this subsection and consent to such election must be submitted in written form to the Commissioner of Revenue Services by each corporation so electing not later than the due date, or if an extension of time to file has been requested and granted, the extended due date of the returns due from the electing corporations for the initial income year for which the election to file a combined return is made. Such election shall be in effect for such initial income year and for each succeeding income years unless and until such election is revoked in accordance with the provisions of subsection (d) of this section.
(b) Any taxpayer, other than a corporation filing a combined return with one or more other corporations under subsection (a) of this section, which owns or controls either directly or indirectly substantially all the capital stock of one or more corporations, or substantially all the capital stock of which is owned or controlled either directly or indirectly by one or more other corporations or by interests which own or control either directly or indirectly substantially all the capital stock of one or more other corporations, may, in the discretion of the Commissioner of Revenue Services, be required or permitted by written approval of the Commissioner of Revenue Services to make a return on a combined basis covering any such other corporations and setting forth such information as the Commissioner of Revenue Services may require, provided no combined return covering any corporation not subject to tax under this chapter shall be required unless the Commissioner of Revenue Services deems such a return necessary, because of intercompany transactions or some agreement, understanding, arrangement or transaction referred to in section 12-226a, in order properly to reflect the tax liability under this part.
(c) (1) (A) In the case of a combined return, the tax shall be measured by the sum of the separate net income or loss of each corporation included or the minimum tax base of the included corporations but only to the extent that said income, loss or minimum tax base of any included corporation is separately apportioned to Connecticut in accordance with the provisions of section 12-218, 12-219a or 12-244, whichever is applicable. In computing said net income or loss, intercorporate dividends shall be eliminated, and in computing the combined additional tax base, intercorporate stockholdings shall be eliminated.
(B) In computing said net income or loss, any intangible expenses and costs, as defined in section 12-218c, any interest expenses and costs, as defined in section 12- 218c, and any income attributable to such intangible expenses and costs or to such interest expenses and costs shall be eliminated provided the corporation that is required to make adjustments under section 12-218c for such intangible expenses and costs or for such interest expenses and costs, and the related member or members, as defined in section 12-218c, are included in such combined return. If any such income and any such expenses and costs are eliminated as provided in this subparagraph, the intangible property, as defined in section 12-218c, of the corporation eliminating such income shall not be taken into account in apportioning under the provisions of section 12-219a the tax calculated under subsection (a) of section 12-219 of such corporation.
(2) If the method of determining the combined measure of such tax in accordance with this subsection for two or more affiliated companies validly electing to file a combined return under the provisions of subsection (a) of this section is deemed by such companies to unfairly attribute an undue proportion of their total income or minimum tax base to this state, said companies may submit a petition in writing to the Commissioner of Revenue Services for approval of an alternate method of determining the combined measure of their tax not later than sixty days prior to the due date of the combined return to which the petition applies and said commissioner shall grant or deny such approval before said due date. In deciding whether or not the companies included in such combined return should be granted approval to employ the alternate method proposed in such petition, the Commissioner of Revenue Services shall consider approval only in the event that the petitioners have clearly established to the satisfaction of said commissioner that all the companies included in such combined return are, in substance, parts of a unitary business engaged in a single business enterprise and further that there are substantial intercorporate business transactions among such included companies.
(3) Upon the filing of a combined return under subsection (a) or (b) of this section, combined returns shall be filed for all succeeding income years or periods for those corporations reporting therein, provided, in the case of corporations filing under subsection (a) of this section, such corporations are included in a federal consolidated corporation income tax return filed for the succeeding income years and, in the case of a corporation filing under subsection (b) of this section, the aforesaid ownership or control continues in full force and effect and is not extended to other corporations, and further, provided no substantial change is made in the nature or locations of the operations of such corporations.
(d) Notwithstanding the provisions of subsections (a) and (c) of this section, any taxpayer which has elected to file a combined return under this chapter as provided in said subsection (a), may subsequently revoke its election to file a combined corporation business tax return and elect to file a separate corporation business tax return under this chapter, although continuing to be included in a federal consolidated corporation income tax return with other companies subject to tax under this chapter, provided such election shall not be effective before the fifth income year immediately following the initial income year in which the corporation elected to file a combined return under this chapter. Notice of an election made pursuant to the provisions of this subsection and consent to such election must be submitted in written form to the Commissioner of Revenue Services by each corporation that had been included in such combined return not later than the due date, or if an extension of time to file has been requested and granted, extended due date of the separate returns due from the electing corporations for the initial income year for which the election to file separate returns is made. The election to file separate returns shall be irrevocable for and applicable for five successive income years.
(P.A. 73-350, S. 19, 27; P.A. 74-304, S. 1, 3; P.A. 77-534, S. 1, 2; 77-607, S. 1, 2; 77-614, S. 139, 587, 610; P.A. 78- 303, S. 85, 136; P.A. 81-411, S. 4, 42; P.A. 96-197, S. 10, 11; P.A. 98-110, S. 21, 27; 98-244, S. 8, 35; P.A. 00-174, S. 26, 83.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 74-304 substituted "additional tax base" for "minimum base" and clarified provisions re combined returns, effective May 30, 1974, and applicable to income years beginning on or after January 1, 1973; P.A. 77-534 amended Subsec. (1) to add provisions re notice of election to submit combined return, effective June 29, 1977, and applicable to income years ending on or after that date; P.A. 77-607 clarified use of combined net income as basis for tax, added provisions re approval of alternate method of computing tax by tax commissioner and added Subsec. (4) re switching from combined filing to separate filing, effective July 6, 1977, and applicable to income years beginning on or after January 1, 1977; P.A. 77-614 and P.A. 78-303 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 81- 411 changed reference to consolidated return to combined return and deleted reference to separate allocation, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; P.A. 96-197 amended Subdiv. (3) to replace "additional" with "minimum" in reference to the tax base, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 added provisions re treatment of Sec. 12-218c and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 98-244 allowed corporations to revoke combined return status after the fifth income year immediately following the year of the election to file a combined return, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; P.A. 00-174 amended Subsec. (c)(1) to divide provisions into Subparas. (A) and (B) and to provide for treatment of intangible property for purposes of the tax imposed under Sec. 12-219 for corporations eliminating income, expenses or costs under this section, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000.
Cited. 43 CS 91, 92.

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Sec. 12-223b. Intercompany rents and business receipts. (a) Intercompany rents shall not be included in the computation of the value of property rented as a property factor in the apportionment fraction if the lessor and lessee are included in a combined return as provided in section 12-223a.
(b) Intercompany business receipts, receipts by a corporation included in a combined return from any other corporation included in such return, shall not be included in the computation of the receipts factor of the apportionment fraction.
(P.A. 73-350, S. 21, 22, 27; P.A. 74-304, S. 2, 3; P.A. 81-411, S. 5, 42.)
History: P.A. 73-350, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 74-304 substituted "included in a combined return" for "taxed on a combined basis", effective May 30, 1974, and applicable to income years beginning on or after January 1, 1973; P.A. 81-411 made technical change substituting receipts for sales, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980.

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Sec. 12-223c. Minimum tax in combined return. Each corporation included in a combined return, other than the corporation whose tax is computed and paid on the combined basis, shall pay the minimum tax of two hundred fifty dollars prescribed under section 12-219.
(P.A. 73-350, S. 23, 27; P.A. 81-66, S. 3, 5; 81-255, S. 23, 37; P.A. 85-159, S. 3, 19; 85-469, S. 4, 6; P.A. 89-16, S. 3, 31.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 81-66 increased minimum tax from fifty to one hundred dollars, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-255 increased minimum tax to two hundred fifty dollars, effective July 1, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 85-159 reduced minimum tax to one hundred dollars, applicable with respect to income years of corporations commencing on or after January 1, 1985; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 89-16 increased the minimum tax payable in accordance with this section from one hundred to two hundred fifty dollars, effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989.
Cited. 220 C. 665, 672, 673, 676.

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Sec. 12-223d. Assessments against one or more taxpayers in combined return. In case a combined return is made as provided by section 12-223a, the Commissioner of Revenue Services may assess the entire tax computed on the basis of such return against any one or more of the taxpayers covered by the return, in such proportions as he shall determine, but every such taxpayer shall be liable for the entire tax.
(P.A. 73-350, S. 24, 27; P.A. 77-614, S. 139, 610.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979.

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Sec. 12-223e. Readjustment of taxes on revision of combined return. If revision shall be made of a combined return for the purpose of the tax of two or more corporations, or of an assessment based upon such a return, the Commissioner of Revenue Services shall have power to readjust the taxes of each taxpayer included in such return, or, if revision is made of a return or an assessment against a taxpayer which might have been included in a combined return when the tax was originally reported or assessed, the Commissioner of Revenue Services shall have power to resettle the tax against such taxpayer and any other taxpayers which might have been included in such report upon a combined basis, and shall adjust the taxes of each such taxpayer accordingly.
(P.A. 73-350, S. 25, 27; P.A. 77-614, S. 139, 610.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979.

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Sec. 12-223f. Supplementary tax due from corporations filing a combined return under section 12-223a for income years commencing on or after January 1, 1990. Notwithstanding the provisions of sections 12-223a to 12-223e, inclusive, the tax due in relation to any corporations which have filed a combined return for any income year with other corporations for the tax imposed under this chapter in accordance with section 12-223a shall be determined as follows: (1) The tax which would be due from each such corporation if it were filing separately under this chapter shall be determined, and the total for all corporations included in the combined return shall be added together; (2) the tax which would be jointly due from all corporations included in the combined return in accordance with the provisions of said sections 12-223a to 12-223e, inclusive, shall be determined; and (3) the total determined pursuant to subdivision (2) of this section shall be subtracted from the amount determined pursuant to subdivision (1) of this section. The resulting amount, in an amount not to exceed twenty-five thousand dollars, shall be added to the amount determined to be due pursuant to said sections 12- 223a to 12-223e, inclusive, and shall be due and payable as a part of the tax imposed pursuant to this chapter.
(P.A. 89-251, S. 23, 203.)
History: P.A. 89-251, Sec. 23 effective July 1, 1989, and applicable to income years commencing on or after January 1, 1990.

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Sec. 12-224. Return of fiduciary. Any fiduciary who conducts or is liquidating the business or is selling the assets of any company shall be subject to the filing of returns in accord with, and to the payment of taxes imposed by, this part in the same manner and to the same extent as if the business were being conducted or liquidated or assets sold by agents or officers of such company. The return of a fiduciary who has been appointed during the income year shall include complete information for that part of the income year during which the company exercised its franchise as well as for that part of the income year in which the fiduciary himself was acting and taxes shall be paid by the fiduciary for both parts of such income year.
(1949 Rev., S. 1905.)
See Sec. 12-242f re obligations of fiduciary under part II of this chapter.

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Sec. 12-225. Supplemental and amended returns. Refund claim. (a) Any company which, either intentionally or through error, fails to include in its return items of income or invested capital or which claims unlawful deductions therefrom shall make a supplemental return disclosing such facts within three years from the due date of the return and, within thirty days thereafter, shall pay to the commissioner any tax due thereon, with interest upon the amount of such additional tax at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable.
(b) (1) Any company which fails to include in its return items of deductions or includes items of nontaxable income or makes any other error in such return may, within three years from the due date of the return, file with the commissioner an amended return, together with a claim for refund of taxes overpaid as shown by such amended return. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. The commissioner shall, within one hundred eighty days of the receipt of such claim, determine whether such claim is valid and, if so, the commissioner shall notify the State Comptroller of the amount of such refund and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to such company. If the commissioner determines that such claim is not valid, either in whole or in part, he shall mail notice of the proposed disallowance in whole or in part of the claim to the company which notice shall set forth briefly the commissioner's findings of fact and the basis of disallowance in each case decided in whole or in part adversely to the claimant. Sixty days after the date on which it is mailed, a notice of proposed disallowance shall constitute a final disallowance except only for such amount as to which the company has filed, as provided in subdivision (2) of this subsection, a written protest with the commissioner. For the purposes of computing any refund due or adjusting net income as a result of the inclusion of income, the taxation of which by the state of Connecticut is prohibited by federal law, including the Constitution of the United States, as applied, no expenses related to such income shall be deducted in computing net income under this chapter.
(2) On or before the sixtieth day after the mailing of the proposed disallowance, the company may file with the commissioner a written protest against the proposed disallowance in which it sets forth the grounds on which the protest is based. If a protest is filed, the commissioner shall reconsider the proposed disallowance and, if the company has so requested, may grant or deny the company or its authorized representatives an oral hearing.
(3) The commissioner shall mail notice of his determination to the company, which notice shall set forth briefly the commissioner's findings of fact and the basis of decision in each case decided in whole or in part adversely to the company.
(4) The action of the commissioner on the company's protest shall be final upon the expiration of one month from the date on which he mails notice of his action to the company unless within such period the company seeks judicial review of the commissioner's determination pursuant to section 12-237.
(1949 Rev., S. 1906; 1949, S. 1099d; 1959, P.A. 66, S. 1; 1967, P.A. 82; 1969, P.A. 257, S. 1; 388, S. 2; P.A. 76-322, S. 2, 27; P.A. 80-307, S. 6, 31; P.A. 81-411, S. 14, 42; P.A. 84-423, S. 1; P.A. 93-74, S. 60, 67; May Sp. Sess. P.A. 94-4, S. 30, 85; P.A. 95-2, S. 19, 36, 37; P.A. 95-160, S. 64, 69; P.A. 96-139, S. 3, 13; P.A. 97-243, S. 52, 67.)
History: 1959 act changed interest rate; 1967 act added provisions re amended returns; 1969 acts changed time within which commissioner must act on amended return from thirty to one hundred eighty days and increased interest on overdue taxes from one-half to three-quarters of one per cent per month; P.A. 76-322 increased interest rate to one per cent per month; P.A. 80-307 increased interest temporarily to one and one-fourth per cent for taxes due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-411 continued interest on delinquent taxes at one and one-fourth per cent per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; P.A. 84-423 increased rate of interest applicable to amount of tax due on a supplemental return from one and one-fourth per cent to one and two-thirds per cent per month; P.A. 93-74 decreased interest rate from one and two-thirds per cent to one and one-fourth per cent, effective May 19, 1993, and applicable to taxes due and payable on and after January 1, 1994; May Sp. Sess. P.A. 94-4 reduced interest rate from one and one-fourth per cent to one per cent, effective July 1, 1995, and applicable to taxes due and owing on or after said date (Revisor's note: In refund provision the words "their claim" were replaced editorially by the Revisors with "its claim" to correct grammatical error); P.A. 95-2, S. 19 divided section into Subsecs. (a) and (b) and amended Subsec. (b) to add provision re expenses related to computing refund due or adjusting net income as a result of inclusion of income, the taxation of which is prohibited by federal law, effective March 8, 1995; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-139 made no substantive changes; P.A. 97-243 amended Subsec. (b) to provide for an administrative hearing with the department before taking an appeal to the Superior Court, to establish the time for filing a claim and to provide that failure to file within the time prescribed constitutes a waiver of any demand against the state on account of overpayment, effective July 1, 1997, and applicable to claims for refund filed on or after said date.
History discussed. 153 C. 111. Cited. 178 C. 243, 244.
Cited. 44 CS 90, 91, 93, 94, 97−100; Id., 126, 130, 132.

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Sec. 12-226. Correction of returns; additional tax; refunds. (a)(1) Any company whose income, profits or earnings are changed, adjusted or corrected for any income year by any official of the United States government, or any agency thereof, in any respect affecting the tax imposed by this part, shall provide notice of such change, adjustment or correction to the commissioner by filing, on or before the date that is ninety days after the final determination of such change, adjustment or correction, or as otherwise required by the commissioner, an amended return under this chapter, and shall concede the accuracy of such determination or state wherein it is erroneous, and thereafter promptly furnish to the commissioner any information, schedules, records, documents or papers relating to such change, adjustment or correction as the commissioner requires. The time for filing such return may be extended by the commissioner upon due cause shown. If, upon examination, the commissioner finds that the company is liable for the payment of an additional tax, the commissioner shall, within a reasonable time from the receipt of such return, notify the company of the amount of such additional tax, together with interest thereon computed at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable. Within thirty days of the mailing of such notice, the company shall pay to the commissioner, in cash or by check, draft or money order, drawn to the order of the Commissioner of Revenue Services, the amount of such additional tax and interest. If, upon examination of such return and related information, the commissioner finds that the company has overpaid the tax due the state and has not received from or been allowed by the United States government, or any agency thereof, a credit or a benefit as a deduction or otherwise, for or by reason of such overpayment, the State Treasurer shall pay the company, upon order of the State Comptroller, the amount of such overpayment. If the commissioner determines that the company's claim of overpayment is not valid, either in whole or in part, the commissioner shall mail notice of the proposed disallowance in whole or in part of the claim to the company, which notice shall set forth briefly the commissioner's findings of fact and the basis of disallowance in each case decided in whole or in part adversely to the claimant. Sixty days after the date on which it is mailed, a notice of proposed disallowance shall constitute a final disallowance except only for such amounts as to which the company has filed, as provided in subdivision (2) of this subsection, a written protest with the commissioner.
(2) On or before the sixtieth day after the mailing of the proposed disallowance, the company may file with the commissioner a written protest against the proposed disallowance in which it sets forth the grounds on which the protest is based. If a protest is filed, the commissioner shall reconsider the proposed disallowance and, if the company has so requested, may grant or deny the company or its authorized representatives an oral hearing.
(3) The commissioner shall mail notice of his determination to the company, which notice shall set forth briefly the commissioner's findings of fact and the basis of decision in each case decided in whole or in part adversely to the company.
(4) The action of the commissioner on the company's protest shall be final upon the expiration of one month from the date on which he mails notice of his action to the company unless within such period the company seeks judicial review of the commissioner's determination pursuant to section 12-237.
(b) (1) Any company whose return to the Director of Internal Revenue has been amended shall, within ninety days after having filed the amended return, make an amended return to the commissioner. The time for filing such amended return may be extended by the commissioner upon due cause shown. If, upon examination, the commissioner finds that the company is liable for the payment of an additional tax, he shall, within a reasonable time from the receipt of such amended return, notify the company of the amount of such additional tax, together with interest thereon computed at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable. Within thirty days of the mailing of such notice, the company shall pay to the commissioner, in cash or by check, draft or money order, drawn to the order of the Commissioner of Revenue Services, the amount of such additional tax and interest. If, upon examination of such amended return and related information, the commissioner finds that the company has overpaid the tax due the state and has not received from or been allowed by the United States government, or any agency thereof, a credit or a benefit, as a deduction or otherwise, for or by reason of such overpayment, the company shall be paid by the State Treasurer, upon order of the Comptroller, the amount of such overpayment. If the commissioner determines that the company's claim of overpayment is not valid, either in whole or in part, he shall mail notice of the proposed disallowance in whole or in part of the claim to the company, which notice shall set forth briefly the commissioner's findings of fact and the basis of disallowance in each case decided in whole or in part adversely to the claimant. Sixty days after the date on which it is mailed, a notice of proposed disallowance shall constitute a final disallowance except only for such amounts as to which the company has filed, as provided in subdivision (2) of this subsection, a written protest with the commissioner.
(2) On or before the sixtieth day after the mailing of the proposed disallowance, the company may file with the commissioner a written protest against the proposed disallowance in which it sets forth the grounds on which the protest is based. If a protest is filed, the commissioner shall reconsider the proposed disallowance and, if the company has so requested, may grant or deny the company or its authorized representatives an oral hearing.
(3) The commissioner shall mail notice of his determination to the company, which notice shall set forth briefly the commissioner's findings of fact and the basis of decision in each case decided in whole or in part adversely to the company.
(4) The action of the commissioner on the company's protest shall be final upon the expiration of one month from the date on which he mails notice of his action to the company unless within such period the company seeks judicial review of the commissioner's determination pursuant to section 12-237.
(1949 Rev., S. 1907; 1949, 1951, S. 1100d; 1957, P.A. 489, S. 1; 560, S. 5; 1963, P.A. 651, S. 2; February, 1965, P.A. 428; 1969, P.A. 388, S. 3; P.A. 76-322, S. 3, 27; P.A. 77-614, S. 139, 610; P.A. 80-307, S. 7, 31; P.A. 81-411, S. 15, 42; P.A. 84-423, S. 2; P.A. 93-74, S. 61, 67; May Sp. Sess. P.A. 94-4, S. 31, 85; P.A. 95-160, S. 64, 69; P.A. 97-243, S. 53, 67; P.A. 00-174, S. 53, 83.)
History: 1963 act changed technical language, extended time for notifying commissioner of change from 30 to 90 days, and added provisions for amended returns; 1965 act distinguished between income, profits or earnings changed, adjusted or corrected by "any official of the United States government, or any agency thereof" and returns amended by the director of internal revenue; 1969 act increased interest rate from one-half to three-quarters of one per cent per month; P.A. 76- 322 increased interest rate to one per cent; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 80-307 increased interest rate temporarily to one and one-fourth per cent for taxes due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-411 continued interest on delinquent taxes at one and one- fourth per cent per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; P.A. 84-423 increased rate of interest applicable to the amount of additional tax due on an amended return from one and one-fourth per cent to one and two-thirds per cent per month; P.A. 93-74 decreased interest rate from one and two-thirds per cent to one and one-fourth per cent, effective May 19, 1993, and applicable to taxes due and payable on and after January 1, 1994; May Sp. Sess. P.A. 94-4 reduced interest rate from one and one-fourth per cent to one per cent, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 97-243 divided existing section into Subsecs. (a) and (b), provided for an administrative hearing with the department before taking an appeal to the Superior Court, established the time for filing a claim and made technical changes, effective July 1, 1997, and applicable to claims for refund filed on or after said date; P.A. 00-174 amended Subsec. (a)(1) to delete requirement that information required to be reported under this section be in the form of an affidavit, to add provisions re filing an amended return and to make technical changes for purposes of gender neutrality, effective July 1, 2000.
Cited. 135 C. 62.
Where additional tax is determined to be due as result of changes, adjustments or corrections in corporation's returns to federal collector of internal revenue in accordance with provisions of this section, tax commissioner must notify corporation of additional taxes due "within a reasonable time" and three-year limitation set forth in section 12-233 does not apply. 153 C. 109, 110. History discussed. Id., 110, 111.
Cited. 44 CS 90, 93, 94, 96.

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Sec. 12-226a. Adjustments by the commissioner. Regulations. If it appears to the Commissioner of Revenue Services that any agreement, understanding or arrangement exists between the taxpayer and any other corporation or any person or firm, whereby the activity, business, income or capital of the taxpayer within the state is improperly or inaccurately reflected, the Commissioner of Revenue Services is authorized and empowered, in his discretion and in such manner as he may determine to adjust items of income, deductions and capital, and to eliminate assets in computing any apportionment percentage under this chapter, provided any income directly traceable thereto shall also be excluded from entire net income, so as equitably to determine the tax. Where (a) any taxpayer conducts its activity or business under any agreement, arrangement or understanding in such manner as either directly or indirectly to benefit its members or stockholders, or any of them, or any person or persons directly or indirectly interested in such activity or business, by entering into any transaction at more or less than a fair price which, but for such agreement, arrangement or understanding, might have been paid or received therefor, or (b) any taxpayer, a substantial portion of whose capital stock is owned either directly or indirectly by another corporation, enters into any transaction with such other corporation on such terms as to create an improper loss or net income, the Commissioner of Revenue Services may include in the entire net income of the taxpayer the fair profits, which, but for such agreement, arrangement or understanding, the taxpayer might have derived from such transaction. Not later than January 1, 1995, the commissioner shall adopt regulations in accordance with the provisions of chapter 54 setting forth standards for taking the actions authorized under this section.
(P.A. 73-350, S. 20, 27; P.A. 77-614, S. 139, 610; P.A. 81-411, S. 6, 42; May Sp. Sess. P.A. 94-4, S. 9, 85; P.A. 95- 160, S. 64, 69.)
History: P.A. 73-350, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective July 1, 1979; P.A. 81-411 deleted reference to allocation, substituting apportionment, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; May Sp. Sess. P.A. 94-4 required commissioner to adopt regulations setting forth standards for making any adjustments to income, deductions or capital, effective June 9, 1994; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.
Cited. 236 C. 156, 157, 161, 163−166, 169−172, 176.
Cited. 43 CS 314, 320−324, 326, 328, 330−332, 334.

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Sec. 12-227. Interest on refunds. To any refunds granted as a result of overpayment of any taxes assessed under this part and chapter 209, except refunds due on estimated payments made with tentative returns and refunds due because of payments on account of estimated tax pursuant to section 12-242d which are greater than the tax disclosed to be due upon the filing of the completed returns, there shall be added interest at the rate of two-thirds of one per cent for each month and fraction of a month which elapses between the later of (a) the due date of such taxes or (b) the date of making such overpayment, and the date of notice by the Commissioner of Revenue Services that such refunds are due. This section shall apply to returns for all calendar or fiscal years which commence on or after May 19, 1959.
(1953, S. 1104d; 1957, P.A. 489, S. 2; 1959, P.A. 161, S. 1; 1963, P.A. 651, S. 15; P.A. 77-614, S. 139, 610; P.A. 89- 343, S. 2, 17; May Sp. Sess. P.A. 94-4, S. 32, 85; P.A. 95-160, S. 64, 69.)
History: 1959 act added exception for refunds due on estimated payments with tentative returns; 1963 act added exception for refunds due on payments on account of estimated tax; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 89-343 increased the rate of interest from one-half to three-fourths of one per cent per month or fraction thereof; May Sp. Sess. P.A. 94-4 reduced interest rate from three-fourths of one per cent to two-thirds per cent, effective July 1, 1995, and applicable to taxes due and owing on or after said date; in 1997 a reference to Sec. 12-242c, repealed by P.A. 95-327, was deleted editorially by the Revisors; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.
Cited. 31 CS 134.

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Sec. 12-228. Refunds to be made from General Fund. Section 12-228 is repealed.
(1949 Rev., S. 1908; 1959, P.A. 291, S. 1; P.A. 85-356, S. 8, 9.)

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Sec. 12-229. Failure to pay tax or make return. Penalty. Waiver of penalty authorized. (a) If any company fails to pay the amount of tax reported to be due on its return within the time specified under the provisions of this part, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid, or fifty dollars, whichever amount is greater. Such amount shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment.
(b) If any company has not made its return within three months after the time specified under the provisions of this part, the commissioner may make such return at any time thereafter, according to the best information obtainable and according to the form prescribed. To the tax imposed upon the basis of such return, there shall be added an amount equal to ten per cent of such tax, or fifty dollars, whichever is greater. The tax shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment. No taxpayer shall be subject to a penalty under both subsections (a) and (b) of this section in relation to the same tax period.
(c) Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this chapter when it is proven to his satisfaction that the failure to pay any tax on time was due to reasonable cause and was not intentional or due to neglect.
(1949 Rev., S. 1909; 1953, S. 1101d; 1957, P.A. 560, S. 6; 1961, P.A. 369; 1967, P.A. 41, S. 1; P.A. 81-64, S. 5, 23; P.A. 88-314, S. 4, 54; P.A. 93-74, S. 62, 67; May Sp. Sess. P.A. 94-4, S. 33, 85; P.A. 95-160, S. 64, 69; P.A. 00-174, S. 54, 83.)
History: 1961 act added reference to affidavit, and made making of return by commissioner discretionary rather than mandatory; 1967 act clarified applicability of provisions; P.A. 77-614 made "commissioner" refer to commissioner of revenue services rather than tax commissioner, effective January 1, 1979; P.A. 81-64 made penalty previously applicable to those who failed to pay within three months after time specified in Sec. 12-222 applicable in all cases, reducing per cent from twenty-five to ten, deleted previous lesser penalty of twenty-five dollars applicable to cases involving late filing and added waiver provision applicable to other state taxes; P.A. 88-314 provided technical clarification related to penalties imposed when tax is not paid within the time specified and when the commissioner prepares the return, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 93-74 decreased interest rate from one and two-thirds per cent to one and one-fourth per cent, effective May 19, 1993, and applicable to taxes due and payable on and after January 1, 1994; May Sp. Sess. P.A. 94-4 in Subsecs. (a) and (b) reduced interest rate from one and one-fourth per cent to one per cent and provided that such interest may only be applied on the tax rather than on the tax and any penalty, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 00-174 amended Subsec. (a) to delete a reference to affidavit, effective July 1, 2000.
Cited. 135 C. 62. Cited. 164 C. 497, 506.

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Sec. 12-230. Forfeiture of corporate rights for failure to make returns. Any corporation required to file a return with the commissioner by the provisions of this part which neglects to file the same for two consecutive fiscal years shall be construed to have forfeited its corporate rights and powers, and its existence as a corporation shall be terminated in the manner provided in section 33-890. A certificate of the commissioner lodged in the office of the Secretary of the State showing the delinquency of any such corporation shall be prima facie evidence of such delinquency, and the secretary, in each such case of default, shall proceed in the manner prescribed in said section 33- 890, except that, immediately following the lodgment of such certificate by the commissioner, the secretary shall notify such corporation and, if such corporation fails to file any return due the state within sixty days from the date of such notice, the secretary shall record in the records of corporations in his office a certificate signed by him showing that the corporate rights and powers of such corporation have been forfeited by reason of such default. Each such corporation may be reinstated and the property rights thereof and of the creditors and of all persons concerned shall be protected in the manner provided in section 33-892.
(1949 Rev., S. 1910; 1959, P.A. 70, S. 1; P.A. 82-472, S. 33, 183; P.A. 96-271, S. 157, 254.)
History: 1959 act substituted "return" for "report"; P.A. 82-472 substituted reference to Secs. 33-387 and 33-388 for repealed Sec. 33-21; P.A. 96-271 replaced references to Sec. 33-387 with Sec. 33-890 and reference to Sec. 33-388 with Sec. 33-892, effective January 1, 1997.

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Sec. 12-231. Penalties for wilful violation of requirements related to payment of tax or delivery of documentation. (a) Any person required under this part to pay any tax, or required under this part or by regulations adopted in accordance with the provisions of section 12-242 to make a return, keep any records or supply any information, who wilfully fails to pay such tax, make such return, keep such records or supply such information, at the time required by law or regulations, shall, in addition to any other penalty provided by law, be fined not more than one thousand dollars or imprisoned not more than one year or both. Notwithstanding the provisions of section 54-193, no person shall be prosecuted for a violation of the provisions of this subsection committed on or after July 1, 1997, except within three years next after such violation has been committed. As used in this subsection, person includes any officer or employee of a company under a duty to pay such tax, make such return, keep such records or supply such information.
(b) Any person who wilfully delivers or discloses to the commissioner or his authorized agent any list, return, account, statement or other document, known by him to be fraudulent or false in any material matter, shall, in addition to any other penalty provided by law, be fined not more than five thousand dollars or imprisoned not more than five years nor less than one year or both. No person shall be charged with an offense under both subsections (a) and (b) of this section in relation to the same tax period but such person may be charged and prosecuted for both such offenses upon the same information.
(1949 Rev., S. 1911; P.A. 78-280, S. 6, 127; P.A. 88-230, S. 1, 12; 88-314, S. 5, 54; P.A. 97-203, S. 2, 20; P.A. 00- 174, S. 55, 83.)
History: P.A. 78-280 substituted "judicial district of Hartford-New Britain" for "Hartford county"; P.A. 88-230 proposed to replace reference to "judicial district of Hartford-New Britain" with "judicial district of Hartford" effective September 1, 1991, but said reference was deleted by P.A. 88-314; P.A. 88-314 substituted new language providing that (1) any person who wilfully fails to pay the tax or file such return when required to do so shall be subject to fine or imprisonment and (2) any person who wilfully delivers to the commissioner any return or document known to be false shall be subject to fine or imprisonment, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 97-203 amended Subsec. (a) to extend to three years the time within which persons wilfully failing to file tax returns or pay taxes may be criminally prosecuted, effective July 1, 1997; P.A. 00-174 amended Subsec. (a) to delete references to affidavit, effective July 1, 2000.

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Sec. 12-231a. Formation of insurance company affiliate of holding company to evade tax. If the commissioner finds in respect of an income year that an insurance company, other than a domestic insurance company, which is an affiliate of an insurance holding company system that includes a domestic insurance company has been formed or availed of for the principal purpose of avoidance or evasion of the tax imposed by this chapter, the commissioner may for purposes of such tax treat such company as if it were a domestic insurance company. The terms "affiliate" and "insurance holding company system" shall have the respective meanings given them in section 38a-129.
(P.A. 73-350, S. 7, 27.)
History: P.A. 73-350 effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973.

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Sec. 12-232. Authority to take testimony under oath; subpoenas. The commissioner and any agent of the commissioner authorized to conduct any inquiry, investigation or hearing hereunder may administer oaths and take testimony under oath relative to the matter of inquiry or investigation. At any hearing ordered by the commissioner, the commissioner or his agent authorized to conduct such hearing and having authority by law to issue such process may subpoena witnesses and require the production of books, papers and documents pertinent to such inquiry. No witness under subpoena authorized to be issued by the provisions of this part shall be excused from testifying or from producing books or papers on the ground that such testimony or the production of such books or other documentary evidence would tend to incriminate him, but such evidence or the books or papers so produced shall not be used in any criminal proceeding against him. If any person disobeys such process or, having appeared in obedience thereto, refuses to answer any pertinent question put to him by the commissioner or his authorized agent, or to produce any books and papers pursuant thereto, the commissioner or such agent may apply to the superior court for the judicial district wherein the taxpayer resides or wherein the business has been conducted, or to any judge of said court if the same is not in session, setting forth such disobedience to process or refusal to answer, and said court or such judge shall cite such person to appear before said court or such judge to answer such question or to produce such books and papers and, upon his refusal so to do, shall commit such person to a community correctional center until he testifies, but not for a longer period than sixty days. Notwithstanding the serving of the term of such commitment by any person, the commissioner may proceed in all respects with such inquiry and examination as if the witness had not previously been called upon to testify. Officers who serve subpoenas issued by the commissioner or under his authority and witnesses attending hearings conducted by him hereunder shall receive fees and compensation at the same rates as officers and witnesses in the courts of this state, to be paid on vouchers of the commissioner on order of the Comptroller from the proper appropriation for the administration of this part.
(1949 Rev., S. 1912; 1969, P.A. 297; P.A. 78-280, S. 2, 127.)
History: 1969 act substituted "community correctional center" for "jail"; P.A. 78-280 substituted "judicial district" for "county".

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Sec. 12-233. Examination of returns by commissioner. Deficiency assessment. The commissioner shall, (1) in the case of a return on which an operating loss is not reported, within three years after the due date for the filing of such return or within three years after the date on which such return was received by him, whichever period expires later, or (2) in the case of a return on which an operating loss is reported, within three years after the due date or the date of receipt by the commissioner, whichever period expires later, of the return on which a carry-over of such loss is fully utilized or deemed fully utilized because such loss is not available for deduction in any subsequent income year, examine it and, in case any error is disclosed by such examination, shall, within thirty days after such disclosure, notify the taxpayer thereof. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this part or regulations promulgated thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment, or fifty dollars, whichever is greater. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this part or regulations promulgated thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No taxpayer shall be subject to more than one penalty under this section in relation to the same tax period. Any decision rendered by any federal court holding that a taxpayer has filed a fraudulent return with the Director of Internal Revenue shall subject the taxpayer to the penalty imposed by this section without the necessity of further proof thereof, except when it can be shown that the return to the state so differed from the return to the federal government as to afford a reasonable presumption that the attempt to defraud did not extend to the return to the state. Within thirty days of the mailing of such notice, the taxpayer shall pay to the commissioner, in cash or by check, draft or money order drawn to the order of the Commissioner of Revenue Services, any additional amount of tax shown to be due by the corrected return or shall be paid by the State Treasurer, upon order of the Comptroller, any amount shown to be due it by such corrected return. The failure of the taxpayer to receive any timely mailed notice required by this section shall not relieve him of the obligation to pay the tax assessed under the terms of this part or any interest or penalties thereon. When, before the expiration of the time prescribed in this section for the examination of the return or the assessment of the tax, both the commissioner and the taxpayer have consented in writing to such examination or assessment after such time, the return may be examined and the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. The commissioner may also in such a case waive the statute of limitations against a claim for refund by such taxpayer.
(1949 Rev., S. 1913; 1951, S. 1102d; 1957, P.A. 560, S. 7; P.A. 77-380, S. 1, 2; 77-614, S. 139, 610; P.A. 86-80, S. 1, 2; P.A. 88-314, S. 6, 54; May Sp. Sess. P.A. 94-4, S. 81, 85; P.A. 95-2, S. 20, 37; P.A. 95-160, S. 64, 69.)
History: P.A. 77-380 added provision re examination of return by commissioner in cases of returns on which an operating loss is reported and specified "timely mailed" notice, effective June 10, 1977, and applicable to income years ending after that date; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective July 1, 1979; P.A. 86-80 in reference to the period within which the commissioner shall examine a return on which an operating loss is carried- over, added the language that the expiration of such period is determined from the date of the return on which such loss is "fully" utilized or "deemed fully utilized", effective May 6, 1986 and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 88-314 deleted statement concerning the date when payment of tax is due, which is covered elsewhere in chapter 208, and added language concerning penalties when a deficiency assessment is made, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; May Sp. Sess. P.A. 94-4 made existing section a Subsec. (a) and added provision that commissioner may not make more than one assessment for a tax period and added a new Subsec. (b) re supplemental assessment, effective June 9, 1994; P.A. 95-2 deleted Subsec. (b) and provision in former Subsec. (a) that the commissioner may not make more than one assessment for a tax period, effective March 8, 1995; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.
Cited. 124 C. 406; 135 C. 62.
Where additional tax is determined to be due in accordance with section 12-226 as result of changes, adjustments or corrections in corporation's returns to federal collector of internal revenue, tax commissioner must notify corporation of the additional taxes due "within a reasonable time" pursuant to said section and three-year limitation set forth in this section does not apply. 153 C. 109, 110. History discussed. Id., 111.
Cited. 26 CS 373, 376. Cited. 44 CS 90, 94.

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Sec. 12-234. Settlement with Treasurer. All funds received by the Commissioner of Revenue Services under the provisions of this part shall be recorded with the Comptroller and shall be deposited daily with the State Treasurer. The commissioner shall issue his receipt to any taxpayer for any payment upon request.
(1949 Rev., S. 1914; P.A. 77-614, S. 139, 610.)
History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979.
See Sec. 4-32 re state revenue accounting.
See Sec. 12-242e re disposition of instalment payments under part II of this chapter.

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Sec. 12-235. Delinquent taxes; interest; collection. To any taxes which are assessed under section 12-233, there shall be added interest at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable. The amount of any tax, penalty or interest due and unpaid under the provisions of this part may be collected under the provisions of section 12-35. The warrant therein provided for shall be signed by the commissioner or his authorized agent. The amount of any such tax, penalty and interest shall be a lien, from the last day of the income year until discharged by payment, against all real estate of the company within the state, and a certificate of such lien signed by the commissioner may be filed for record in the office of the clerk of any town in which such real estate is situated, provided no such lien shall be effective as against any bona fide purchaser or qualified encumbrancer of any interest in any such property. When any tax with respect to which a lien has been recorded under the provisions of this section has been satisfied, the commissioner, upon request of any interested party, shall issue a certificate discharging such lien, which certificate shall be recorded in the same office in which the lien was recorded. Any action for the foreclosure of such lien shall be brought by the Attorney General in the name of the state in the superior court for the judicial district in which the property subject to such lien is situated, or, if such property is located in two or more judicial districts, in the superior court for any one such judicial district, and the court may limit the time for redemption or order the sale of such property or pass such other or further decree as it judges equitable.
(1949 Rev., S. 1915; 1959, P.A. 69, S. 1; 1969, P.A. 388, S. 4; P.A. 76-322, S. 4, 27; P.A. 77-614, S. 139, 610; P.A. 78-280, S. 2, 4, 127; P.A. 80-307, S. 8, 31; P.A. 81-411, S. 16, 42; Nov. Sp. Sess. P.A. 81-4, S. 4, 32; P.A. 82-325, S. 3, 7; P.A. 85-501, S. 2; P.A. 88-314, S. 7, 54; P.A. 93-74, S. 9, 67; May Sp. Sess. P.A. 94-4, S. 34, 85; P.A. 95-160, S. 64, 69.)
History: 1959 act decreased interest rate from six-tenths to one-half of one per cent per month; 1969 act increased interest rate to three-quarters of one per cent; P.A. 76-322 increased interest rate to one per cent; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-280 substituted "judicial district" for "county"; P.A. 80-307 increased interest rate temporarily to one and one-fourth per cent for taxes due on and after July 1, 1980, but not later than June 30, 1981; P.A. 81-411 continued interest on delinquent taxes at the rate of one and one- fourth per cent per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; Nov. Sp. Sess. P.A. 81-4 raised interest rate from one and one-fourth to one and two-thirds per cent per month, effective February 1, 1982 and applicable to taxes payable to the state which first become due on or after that date; P.A. 82-325 revised effective date of Nov. Sp. Sess. P.A. 81-4 but without affecting this section; P.A. 85-501 provided lien shall not be effective against a "qualified" encumbrancer as defined in Sec. 12-35b, deleting reference to purchaser or encumbrancer to whom property is transferred between last day of income year and date on which lien is recorded; P.A. 88-314 made technical changes in reference to the rate of interest added if the tax is not paid when due, conforming with the description used for most state taxes, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 93-74 decreased interest rate from one and two-thirds per cent to one and one-fourth per cent, effective May 19, 1993, and applicable to taxes due and payable on and after January 1, 1994; May Sp. Sess. P.A. 94-4 reduced interest rate from one and one-fourth per cent to one per cent, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.

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Sec. 12-235a. Disallowance of credits if taxes due and unpaid. The Commissioner of Revenue Services may disallow any credit otherwise allowable for a taxable year against the tax imposed under this chapter if the company claiming the credit has any amount of taxes due and unpaid to the state including interest, penalties, fees and other charges related thereto for which a period in excess of thirty days has elapsed following the date on which such taxes were due and which are not the subject of a timely filed administrative appeal to the commissioner or of a timely filed appeal pending before any court of competent jurisdiction. Before any such disallowance, the commissioner shall send written notice to the company, stating that it may pay the amount of such delinquent tax or enter into an agreement with the commissioner for the payment thereof, by the date set forth in said notice, provided, such date shall not be less than thirty days after the date of such notice. Failure on the part of the company to pay the amount of the delinquent tax or enter into an agreement to pay the amount thereof by said date shall result in a disallowance of the credit being claimed.
(P.A. 97-193, S. 2, 5.)
History: P.A. 97-193 effective June 24, 1997, and applicable to income years commencing on or after January 1, 1998.

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Sec. 12-236. Hearing by commissioner. Any taxpayer, aggrieved by the action of the commissioner or his authorized agent in fixing the amount of any tax, penalty or interest provided for by this part, may apply to the commissioner, in writing, within sixty days after the notice of such action is delivered or mailed to it, for a hearing and a correction of the amount of the tax, penalty or interest so fixed, setting forth the reasons why such hearing should be granted and the amount in which such tax, penalty or interest should be reduced. The commissioner shall promptly consider each such application and may grant or deny the hearing requested. If the hearing is denied, the applicant shall be notified thereof forthwith. If it is granted, the commissioner shall notify the applicant of the time and place fixed for such hearing. After such hearing the commissioner may make such order in the premises as appears to him just and lawful and shall furnish a copy of such order to the applicant. The commissioner may, by notice in writing, at any time within three years after the date when any return of any taxpayer has been due, order a hearing on his own initiative and require the taxpayer or any other individual whom he believes to be in possession of relevant information concerning the taxpayer to appear before him or his authorized agent with any specified books of account, papers or other documents, for examination under oath.
(1949 Rev., S. 1916; 1967, P.A. 9; P.A. 91-236, S. 2, 25.)
History: 1967 act included references to interest and made technical changes; P.A. 77-614 made "commissioner" refer to commissioner of revenue services rather than tax commissioner, effective January 1, 1979; P.A. 91-236 provided for sixty, rather than thirty, days to request a hearing, effective July 1, 1991, and applicable to taxes due on or after that date.
Application for hearing and reduction of tax evidently applies only to cases where commissioner increases tax by correcting return or imposes penalty. 124 C. 408. Cited. 135 C. 62. Cited. 202 C. 412, 418. Cited. 203 C. 198, 202. Cited. Id., 455, 459. Cited. 220 C. 665, 668. Cited. 235 C. 865, 867.
Cited. 31 CS 134. Cited. 40 CS 77, 78, 79.

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Sec. 12-237. Appeal. Any taxpayer aggrieved because of any order, decision, determination or disallowance of the Commissioner of Revenue Services under the provisions of this part may, within one month after service upon the taxpayer of notice of such order, decision, determination or disallowance, take an appeal therefrom to the superior court for the judicial district of New Britain, which shall be accompanied by a citation to the Commissioner of Revenue Services to appear before said court. Such citation shall be signed by the same authority, and such appeal shall be returnable at the same time and served and returned in the same manner, as is required in case of a summons in a civil action. The authority issuing the citation shall take from the appellant a bond or recognizance to the state of Connecticut, with surety to prosecute the appeal to effect and to comply with the orders and decrees of the court in the premises. Such appeals shall be preferred cases, to be heard, unless cause appears to the contrary, at the first session, by the court or by a committee appointed by it. Said court may grant such relief as may be equitable and, if such tax has been paid prior to the granting of such relief, may order the Treasurer to pay the amount of such relief, with interest at the rate of eight per cent per annum, to the aggrieved taxpayer. If the appeal has been taken without probable cause, the court may tax double or triple costs, as the case demands; and, upon all such appeals which may be denied, costs may be taxed against the appellant at the discretion of the court, but no costs shall be taxed against the state.
(1949 Rev., S. 1917; 1955, S. 1103d; 1971, P.A. 870, S. 22; P.A. 76-436, S. 311, 681; P.A. 77-614, S. 139, 610; P.A. 78-280, S. 5, 127; P.A. 88-230, S. 1, 12; P.A. 89-343, S. 6, 17; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; May Sp. Sess. P.A. 94-4, S. 35, 85; P.A. 95-160, S. 64, 69; 95-220, S. 4−6; P.A. 99-215, S. 24, 29.)
History: 1971 act substituted court of common pleas for superior court, effective September 1, 1971, except that courts with cases pending retain jurisdiction unless action may be transferred; P.A. 76-436 substituted superior court for court of common pleas, effective July 1, 1978; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-280 substituted "judicial district of Hartford-New Britain" for "Hartford county"; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 89-343 increased the rate of interest on the amount of relief ordered by the court from six to nine per cent per annum; P.A. 90-98 changed effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; May Sp. Sess. P.A. 94-4 reduced interest rate from nine per cent to eight per cent, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-215 replaced "judicial district of Hartford" with "judicial district of New Britain", effective June 29, 1999.
Cited. 122 C. 145. No appeal lies from commissioner's refusal to correct return upon hearing requested and held more than one month after time for payment of tax. 124 C. 403, 409. Cited. 135 C. 63. Cited. 178 C. 243, 244; 179 C. 363, 364. Cited. 199 C. 346, 347. Cited. 202 C. 412, 413, 419, 421, 422. Cited. 203 C. 455, 459. Cited. 204 C. 137, 144. Cited. 213 C. 220, 226. Cited. Id., 442, 443. Cited. 220 C. 665, 668. Cited. 224 C. 426, 430. Cited. 228 C. 137, 139, 141. Cited. 232 C. 325, 327. Cited. 235 C. 865, 868. Cited. 236 C. 156, 162. Cited. Id., 701, 704. Cited. 242 C. 599.
Cited. 17 CA 82, 84.
Cited. 31 CS 134. Cited. 41 CS 271, 273. Cited. 42 CS 356, 357. Cited. 43 CS 91, 92, 94, 96, 97, 100, 103. Cited. Id., 314.

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Sec. 12-238. Abatement of taxes. Section 12-238 is repealed, effective April 13, 1995.
(1949 Rev., S. 1918; September, 1957, P.A. 13, S. 1; P.A. 77-614, S. 141, 610; P.A. 95-4, S. 7, 8.)

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Sec. 12-239. Abatement of taxes on motor bus company in receivership. The Commissioner of Revenue Services, upon the advice of the Attorney General, may abate, in whole or in part, as the interest of the state requires, the taxes and interest thereon due the state from any motor bus company in the hands of a receiver during any year when such company, while in receivership, failed to earn the amount of the tax due the state and its operating expenses as defined in the uniform system of accounts established by the Department of Transportation.
(1957, P.A. 478; P.A. 75-486, S. 26, 69; P.A. 77-614, S. 142, 162, 610; P.A. 79-610, S. 4.)
History: P.A. 75-486 substituted public utilities control authority for public utilities commission; P.A. 77-614 substituted commissioner of revenue services for commissioner of finance and control, and division of public utility control within the department of business regulation for public utilities control authority, effective January 1, 1979; P.A. 79-610 substituted department of transportation for division of public utility control within the department of business regulation.

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Sec. 12-240. Publication and disclosure of information. The Commissioner of Revenue Services shall publish in his annual report data showing the amount of taxes upon net income, the amount of minimum taxes and the amount of penalties assessed under the provisions of this part, with such classifications of taxpayers, incomes and deductions and such other facts as he deems pertinent and valuable. Such published figures shall not disclose the operations of any taxpayer in such manner as to permit the identification of such taxpayer by those unassociated with his business.
(1949 Rev., S. 1919; P.A. 76-436, S. 312, 681; P.A. 77-614, S. 139, 610; P.A. 82-67, S. 2.)
History: P.A. 76-436 deleted reference to courts of common pleas and substituted "violation" for "infraction", effective July 1, 1978; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 82-67 eliminated references to limitations on disclosure of information obtained in examining records or returns of taxpayers, which limitations are included in section 12-15 as amended by P.A. 82-67.
See Sec. 12-242i re consideration of declaration as return.

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Sec. 12-241. Tax to be in lieu of other taxes. The taxes imposed by this part, and in the case of domestic insurance companies by chapter 207, shall be in lieu of all other taxes upon the intangible assets of any company, or upon the intangible assets of an employee's stock bonus, pension or profit-sharing trust established by any company, which trust is exempt from federal income taxation. As to any motor bus company engaged in the business of carrying passengers for hire over the highways of the state in common carrier motor vehicles, the tax imposed by this chapter shall be in lieu of all other taxes upon all common carrier motor buses owned by such company and used exclusively in the business of carrying passengers for hire and upon the franchises of such company, in lieu of fifty per cent of all other taxes on the real property and tangible personal property of a Connecticut motor bus company, other than motor buses, which real and tangible personal property is used directly in the conduct of its motor bus business, and in lieu of all other taxes upon or measured by income derived by such company from such operations, but receipts of any such company from activities other than such operations shall be unaffected by the provisions hereof, and the provisions hereof shall not be construed as exempting any company from taxation on its real estate and personal property other than common carrier motor buses used exclusively in the business of carrying passengers for hire, except as herein provided in the case of a Connecticut motor bus company, or from complying with the provisions of the general statutes relating to fees payable to the Commissioner of Motor Vehicles or for the licensing and registration of motor vehicles.
(1949 Rev., S. 1920; 1957, P.A. 515, S. 4; September, 1957, P.A. 20, S. 1; 1959, P.A. 673, S. 1; P.A. 73-350, S. 18, 27.)
History: 1959 act added provisions re property taxes on Connecticut motor bus companies; P.A. 73-350 made taxes due under chapter 207 in the case of domestic insurance companies in lieu of others on intangible assets, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973.
See Sec. 12-241a for definition of "Connecticut motor bus company".

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Sec. 12-241a. Definition. As used in section 12-241, "Connecticut motor bus company" means any common carrier motor bus company, organized in this state and engaged in the business of carrying passengers for hire, to which a certificate has been issued under the provisions of section 13b-80 and seventy-five per cent of whose gross operating revenue in each calendar year is derived from operations within the state.
(1959, P.A. 673, S. 3, 4; 1961, P.A. 89, S. 1.)
History: 1961 act deleted limitation of relief for bus companies to taxes on assessment lists of 1959 and 1960.

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Sec. 12-242. Regulations. The Commissioner of Revenue Services may prescribe regulations and make rulings, not inconsistent with law, to carry into effect the provisions of this part, which regulations or rulings, when reasonably designed to carry out the intent and purpose of this chapter, shall be prima facie evidence of its proper interpretation. The commissioner shall, at least annually, and more often in his discretion, publish for distribution all regulations prescribed hereunder and such rulings as appear to him to be of general interest.
(1949 Rev., S. 1921; P.A. 77-614, S. 139, 610; P.A. 90-271, S. 6, 24.)
History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 90-271 made a technical change.
See chapter 54 for uniform administrative procedure.
See Sec. 12-242h re regulations with respect to part II of this chapter.

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PART II
PAYMENT OF ESTIMATED TAX