Popular Name and CGS Cite

Incentive Description

Project or Activity

Notes

Incremental Research and Development (R&D) Tax Credit (12-217j)

20% corporate tax credit

The credit is applied against the increase in R&D spending over the prior year, with a 15-year carry-forward for unused credits.

The law limits the total value of credits companies can claim for R&D and any other purposes in any income year to 70% of its tax liability without the credits for that year.

Companies qualify for refunds for unused R&D tax credits if their annual gross revenues are below $ 70 million. The refund equals 65% of the value of the unused credits, up to $ 1. 5 million for income years beginning in 2002.

Rolling R&D Tax Credit (12-217n)

Corporate tax credit amount calculated based on statutory formula

R&D spending

Same as above.

Incremental Credit for Capital Goods (12-217o)

10% corporate tax credit for companies with fewer than 250 employees, 5% for those with between 250 and 500

Machinery and equipment a company installs in Connecticut, the amount for which exceeds the amount the company paid for similar purchases in its prior income year

The law limits the total value of credits companies can claim for any purpose in any income year to 70% of its tax liability without the credits for that year

Non Incremental Credits for Fixed Capital and Human Capital Investments (12-217 w and x)

5% corporate tax credit

Machinery, equipment and other fixed capital acquired from an unrelated business having a depreciable life of at least four years and meeting other statutory criteria

Training employees, operating day care facilities, and contributing to colleges and universities constitute human capital investments

Same as above.

Tax Credit for Data Processing Equipment (12-217t)

100% corporate tax credit

The credit is applied against the property taxes paid on data processing equipment

Same as above.

Guarantee Fee Tax Credit (12-217cc)

100% corporate tax credit

Credit applies to fees a business pays when it obtains a federal Small Business Administration loan guarantee.

Same as above

Welfare-to-Work Hiring Incentive (12-217y)

Corporate tax credit equal to $ 125 for each full month each employee works

Credit is for hiring people who have been on welfare for at least nine months and work for at least 30 hours per week.

Same as above. Also, businesses must apply to the labor commissioner for the credit, which by law is limited to $ 1 million per year for all businesses.

Defense Plant Zone (32-56)

• Five-year, 80% abatement

• Ten-year, 50% corporate business tax credit

Building or renovating facilities or acquiring new machinery and equipment

Create at least 150 new jobs or fill 30% of new jobs with town residents eligible for federal job training assistance

The law allows the economic and community development commissioner to extend these incentives to defense manufacturers hurt by defense cuts and other types of manufacturers that move into vacant former defense plants. The commissioner must first declare that the municipality has been hurt by defense cuts, after which defense companies or those moving into abandoned defense plants may apply to him for benefits.

PILOT for Manufacturing Machinery and Equipment (12-81 (72))

Five-year, 100%

Newly acquired machinery and equipment

The state reimburses towns for 80% of the revenue they lose as a result of the abatement. PA 03-2 allows towns to impose a tax for the difference between the state reimbursement it received under PA 01-2, MSS, and the grant approved under PA 03-2.