ECONOMIC DEVELOPMENT; CORPORATIONS; BUSINESS (GENERAL);

ECONOMIC DEVELOPMENT; CORPORATIONS;

You asked us to summarize, in bullet form, the 2003 acts that, in our judgment, affect the widest range of businesses.

Given your criterion we excluded acts that mainly affect specific types of businesses, such as restaurants, pharmacies, and motor vehicles. But OLR’s 2003 Acts Affecting Business report provides detailed summaries of these acts and those included in this report. You can access that report at http: //cgalites/2003/olrdata/ce/rpt/2003-R-0470. htm.

TAXES

• Corporate Tax Surcharge

o For 2003 income year, 20% tax surcharge imposed on (1) the corporation tax and (2) the $ 250 minimum tax on limited liability companies, limited partnerships, and S corporations;

o For the 2004 income year, corporations with a tax liability that exceeds the $ 250 minimum tax must pay a 25% surcharge based on their liability before credits

• Sales and Use Taxes

o Sales tax exemption for clothing and footwear limited to items costing less than $ 50;

o Cigarette tax increased by 40 cents a pack to $ 1. 51;

o The 1% sales and use tax on computer and data process services that was slated for repeal is maintained;

o Several sales tax permits issued on or after October 1, 2003 are valid for five rather than two years; and

o Starting in 2004, the last-week-in-August sales tax holiday for clothing and footwear costing less than $ 300 is repealed.

• Tax Administration

o “Sale for resale” sales and use tax exemption is disallowed when a purchaser of taxable services resells them to an affiliate;

o Certain motor vehicle fuel tax refunds are now restricted to fuel used in Connecticut;

o Revenue services commissioner can now require more taxpayers to make payments by electronic funds transfer and to file tax returns, statements, and documents by computer or other new technology;

o Sales tax bond security requirements have been extended to all businesses dealing with nonresident contractors, including those providing services;

o The refund or credit for income tax withholding is limited to only the overpayments an employer failed to withhold from an employee’s pay;

o Revenue services commissioner can now put liens on intangible items owned by delinquent taxpayers as well as their goods; and

o Groups of related corporations meeting specified criteria must now determine the corporation tax liability of their members that do business in Connecticut as if their respective groups were single companies.

• Tax Credits

o Eligibility for the R&D tax credit refunds has been temporarily reinstated for companies paying the alternative capital base corporation tax for a year when they report no net income.

ENVIRONMENTAL PROTECTION FEES

• Many environmental protect application, examination, registration, and permit fees have been increased.

LABOR

• Access to Electronically Recorded Personnel Files: Private employers must now keep e-mail and facsimiles in an employee’s personnel file.

• Early Retirees’ Group Health Insurance: Group health insurance plans must now give people the option to continue their group coverage at their own expense if they quit their job, take a leave of absence, or reduce their hours until they become eligible to receive Medicare benefits.

• Structured Settlements: Parties to a personal injury or workers compensation claim settlement or judgment requiring periodic payments for damages must now comply with several changes affecting disclosure, approval, and notification.

• Employee Assistance Program: Employers can no longer require an employee assistance professional or employee to disclose any information concerning or confirming an employee’s voluntary participation in an employer’s employee assistance program.

• Sick Time for Family and Medical Leave: Private sector employees can now use up to two weeks of sick time while on leave under the state’s Family Medical Leave Act, and employers cannot deny them from using this time or fire them for doing so.

• Calculating Overtime Payments: Employers cannot apply variable overtime rates to delivery drivers or sales merchandisers who earn both salary and commission and are subject to overtime rules.

• Workplace Health Emergencies, Diseases, or Hazards: Employers must now notify employees of potential risks from a health emergency, disease cluster, or imminent hazard and recommend how these risks can be reduced.

CONSUMERS

• Extended Warranties: Extended warranty contracts for motor vehicles must now comply with the same laws governing other types of extended warranty contracts.

• SPAM Restrictions: People or entities who spam ads can no longer do so after the intended recipients tell them not to and must comply with other restrictions.

• Identify Theft: Businesses must revise their practices designed to prevent identify theft while those violating identify theft laws face new graduated penalties.

HEALTH CARE

• Medical Savings Accounts: High deductible individual and group policies used to establish federally qualified savings accounts are now exempted from the $ 50 maximum home health care deductible required in certain health insurance policies.

• Statewide Smoking Ban: Smoking is now banned in most workplaces where five or more people work, except in specially ventilated smoking rooms.

• Health Plan Option for Small Employers: The comptroller can now arrange group health insurance for eligible small employers under the state’s Municipal Employee Health Insurance Plan.

BUSINESS LAW

• Retainage in Private Sector Construction Contracts: Property owners must now establish escrow accounts for most money withheld as retainage in most commercial construction contracts.

• Business Mergers: Stock corporations can now merge with partnerships, limited partnerships, limited liability partnerships, limited liability companies, joint ventures, joint stock companies, business trusts, statutory trusts, and real estate trusts.

JR: ts