Connecticut Seal

Substitute Senate Bill No. 421

Public Act No. 04-201

AN ACT CONCERNING ADMINISTRATION OF VARIOUS STATE TAXES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2004) (a) For purposes of this section:

(1) "Taxpayer" means any person identified by a claimant state under this section as owing taxes to such claimant state;

(2) "Claimant state" means any other state or the District of Columbia that allows the commissioner, in cases where a taxpayer owes taxes to this state, to certify that such tax is owed and to request the tax officer of such other state or such district to collect such taxes owed to this state and provides for the payment of such collected amount to this state;

(3) "Taxes" means any amount of tax imposed under the laws of the claimant state, including additions to tax for penalties and interest, which is finally due and payable to the claimant state by a taxpayer, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed, and which is legally enforceable under the laws of the claimant state against the taxpayer, whether or not there is an outstanding judgment for such sum;

(4) "Tax officer" means a unit or official of a claimant state, or the duly authorized agent of such unit or official, charged with the imposition, assessment or collection of taxes of that state; and

(5) "Commissioner" means the Commissioner of Revenue Services.

(b) (1) Upon the request and certification of the tax officer of a claimant state to the commissioner that a taxpayer owes taxes to such claimant state, the commissioner may, through the exercise of the commissioner's power and authority under section 12-35 of the general statutes, collect such taxes in the same manner that the commissioner would collect such taxes if they were due and payable to this state, and shall pay over such collected amount to the claimant state in accordance with the provisions of this section. The commissioner shall not collect such taxes unless the laws of the claimant state (A) allow the commissioner, in cases where a taxpayer owes taxes to this state, to certify that such tax is owed and to request the tax officer of the claimant state to collect such taxes owed to this state, and (B) provide for the payment of such collected amount to this state.

(2) Such certification shall include (A) the full name and address of the taxpayer; (B) the taxpayer's Social Security number or federal employer identification number; (C) the amount of the tax for the taxable period sought to be collected, including a detailed statement for each taxable period showing tax, interest and penalty; (D) a statement whether the taxpayer filed a tax return with the claimant state for such tax, and, if so, whether such tax return was filed under protest; and (E) a statement that any administrative or judicial remedies, or both, have been exhausted or have lapsed and that the amount of taxes is legally enforceable under the laws of such state against the taxpayer.

(3) Upon receipt by the commissioner of the required certification, he or she shall notify the taxpayer by first-class mail to the taxpayer's last-known address that he or she has received a request from the claimant state to collect taxes from the taxpayer, that the taxpayer has the right to protest the collection of such taxes by the commissioner for the claimant state, that failure to file a protest in accordance with subdivision (4) of this subsection shall constitute a waiver of any demand against this state on account of the collection of such taxes and that the amount, upon collection, will be paid over to the claimant state. The notice shall include a copy of the certification by the tax officer of such claimant state. Sixty days after the date on which it is mailed, a notice under this subdivision shall be final except only for such amounts as to which the taxpayer has filed, as provided in subdivision (4) of this subsection, a written protest with the commissioner.

(4) Any taxpayer notified in accordance with subdivision (3) of this subsection may, on or before the sixtieth day after the mailing of such notice by the commissioner, protest the collection of all or a portion of such taxes by filing with the commissioner a written protest in which the taxpayer shall set forth the grounds on which the protest is based. If a timely protest is filed, the commissioner shall refrain from collecting such taxes and shall send a copy of the protest to the claimant state for determination of the protest on its merits in accordance with the laws of such state. In the case of a taxpayer that did not file a tax return for the tax for the taxable period sought to be collected and where the amount of taxes owed to the claimant state is based on an assessment made against the taxpayer by the tax officer of the claimant state, and where the taxpayer has filed a timely protest under this subdivision, the commissioner shall require the claimant state to certify that the assessment was contested before and adjudicated by an administrative or judicial tribunal of competent jurisdiction in the claimant state. If the commissioner is satisfied that the taxpayer's written protest is based on a bona fide contention that the claimant state did not have jurisdiction to tax the taxpayer, the commissioner shall require the claimant state to certify that the assessment was contested before and adjudicated by a judicial tribunal of competent jurisdiction in the claimant state. If the claimant state fails, on or before the forty-fifth day after the sending of the copy of the protest by the commissioner to such claimant state, to certify to the commissioner that the claimant state has reviewed the stated grounds on which the protest is based, and to renew the certification described in subdivision (2) of this subsection, the commissioner shall not collect such taxes. If such certifications are made within such time period, and if the commissioner is satisfied that such certifications are true, accurate and complete, the commissioner shall collect such tax.

(c) The commissioner may enter into agreements with the tax officers of claimant states relating to: (1) Procedures and methods to be employed by a claimant state with respect to the operation of this section, (2) safeguards against the disclosure or inappropriate use of any information that identifies, directly or indirectly, a particular taxpayer obtained or maintained pursuant to this section, and (3) a minimum threshold for the amount of taxes owed by a taxpayer to a claimant state that would trigger the operation of this section.

Sec. 2. Section 12-475 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Commissioner of Revenue Services shall prescribe regulations for the enforcement of this chapter.

(b) The commissioner is authorized to avail himself or herself of the services of the state police and the Commissioner of Motor Vehicles in enforcing this chapter.

(c) The amount of any tax, penalty or interest due and unpaid under the provisions of this chapter may be collected under the provisions of section 12-35. The warrant therein provided for shall be signed by the commissioner or his or her authorized agent. The amount of any such tax, penalty and interest shall be a lien, from the last day of the month next preceding the due date of such tax until discharged by payment, against all real estate of the taxpayer 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 is 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 make such other or further decree as it judges equitable.

(d) In carrying out the provisions of this chapter, the commissioner, and any representative of the commissioner authorized to conduct any inquiry, investigation or hearing, may administer oaths and take testimony under oath in any inquiry or investigation related to the tax imposed under this chapter. At any such hearing ordered by the commissioner, the commissioner or the commissioner's representative authorized to conduct such hearing and to issue such process as may be necessary for such hearing may subpoena witnesses and require the production of books, papers and documents pertinent to such inquiry. No witness under subpoena shall be excused from testifying or from producing books or other documentary evidence on the ground that such testimony or the production of such books or other documentary evidence would tend to incriminate the witness provided such evidence or the books or other documentary evidence so produced shall not be used in any criminal proceeding against the witness. If any person disobeys such process or, having appeared in obedience to such process, refuses to answer any pertinent question put to him or her by the commissioner or the commissioner's authorized representative, or to produce any books and other documentary evidence pursuant to such questioning, the commissioner or such representative may apply to the superior court for the judicial district in which the taxpayer resides or in which the business has been conducted setting forth such disobedience to process or refusal to answer. The court shall order such person to appear before said court to answer such question or to produce such books and documentary evidence and, upon such person's refusal to do so, shall commit such person to a community correctional center until such person 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.

Sec. 3. Section 12-491 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Commissioner of Revenue Services is authorized to avail himself or herself of the services of the state police, the Commissioner of Motor Vehicles and the Department of Public Utility Control in enforcing the provisions of this chapter.

(b) In carrying out the provisions of this chapter, the commissioner, and any representative of the commissioner authorized to conduct any inquiry, investigation or hearing, may administer oaths and take testimony under oath in any inquiry or investigation related to the tax imposed under this chapter. At any such hearing ordered by the commissioner, the commissioner or the commissioner's representative authorized to conduct such hearing and to issue such process as may be necessary for such hearing may subpoena witnesses and require the production of books, papers and documents pertinent to such inquiry. No witness under subpoena shall be excused from testifying or from producing books or other documentary evidence on the ground that such testimony or the production of such books or other documentary evidence would tend to incriminate the witness provided such evidence or the books or other documentary evidence so produced shall not be used in any criminal proceeding against the witness. If any person disobeys such process or, having appeared in obedience to such process, refuses to answer any pertinent question put to him or her by the commissioner or the commissioner's authorized representative, or to produce any books and other documentary evidence pursuant to such questioning, the commissioner or such representative may apply to the superior court for the judicial district in which the taxpayer resides or in which the business has been conducted setting forth such disobedience to process or refusal to answer. The court shall order such person to appear before said court to answer such question or to produce such books and documentary evidence and, upon such person's refusal to do so, shall commit such person to a community correctional center until such person 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.

Sec. 4. Subsection (b) of section 12-494 of the general statutes, as amended by section 40 of public act 03-2, is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) The rate of tax imposed under subdivision (1) of subsection (a) of this section shall, in lieu of the rate under said subdivision (1), be imposed on certain conveyances as follows: (1) In the case of any conveyance of real property which at the time of such conveyance is used for any purpose other than residential use, except unimproved land, the tax under said subdivision (1) shall be imposed at the rate of one per cent of the consideration for the interest in real property conveyed; [and] (2) in the case of any conveyance in which the real property conveyed is a residential estate, including a primary dwelling and any auxiliary housing or structures, regardless of the number of deeds, instruments or writings used to convey such residential estate, for which the consideration or aggregate consideration, as the case may be, in such conveyance is eight hundred thousand dollars or more, the tax under said subdivision (1) shall be imposed (A) at the rate of one-half of one per cent on that portion of such consideration up to and including the amount of eight hundred thousand dollars, and (B) at the rate of one per cent on that portion of such consideration in excess of eight hundred thousand dollars; and (3) in the case of any conveyance in which real property on which mortgage payments have been delinquent for not less than six months is conveyed to a financial institution or its subsidiary which holds such a delinquent mortgage on such property, the tax under said subdivision (1) shall be imposed at the rate of one-half of one per cent of the consideration for the interest in real property conveyed.

Sec. 5. Section 12-707 of the general statutes, as amended by section 4 of public act 03-107, is repealed and the following is substituted in lieu thereof (Effective January 1, 2005, and applicable to wages and nonpayroll amounts paid on or after January 1, 2005):

(a) (1) Each employer required to deduct and withhold tax under this chapter from the wages of employees shall be liable for such tax and shall file a withholding return as prescribed by the Commissioner of Revenue Services and pay over to the commissioner, or to a depositary designated by the commissioner, the taxes so required to be deducted and withheld at the [same] times [that such employer is required, under federal law and regulations, to pay over federal taxes that are required to be deducted and withheld from wages of employees, except if the amount of taxes required to be deducted and withheld in a calendar quarter is less than five hundred dollars and if the employer is required, under federal law and regulations, to pay over federal taxes that are required to be deducted and withheld from wages of employees on or before the last day of the month next succeeding such calendar quarter, the employer shall file a withholding return and pay over such taxes on or before the last day of the month next succeeding the calendar quarter for which the taxes were deducted and withheld] specified in subsection (b) of this section.

(2) Each payer of nonpayroll amounts shall deduct and withhold tax under this chapter from the nonpayroll amounts of payees, shall be liable for such tax, and shall file a withholding return as prescribed by the commissioner and pay over to the commissioner, or to a depository designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.

(b) (1) (A) With respect to the tax required to be deducted and withheld under this chapter from wages paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each employer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If an employer is a weekly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If an employer is a monthly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If an employer is a quarterly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection. Notwithstanding any provision of this subsection, if an employer is a household employer, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (6) of this subsection.

(B) With respect to the tax required to be deducted and withheld under this chapter from nonpayroll amounts paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each payer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If a payer is a weekly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If a payer is a monthly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If a payer is a quarterly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection.

(2) (A) The annual determination for an employer required to deduct and withhold tax under this chapter shall be based on the employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period, provided, if any employer fails timely to file one or more required withholding tax returns for the four quarterly periods within the twelve-month look-back period, the commissioner may base the annual determination for the employer on any information available to the commissioner. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than ten thousand dollars, the employer is a weekly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than two thousand dollars but not more than ten thousand dollars, the employer is a monthly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was two thousand dollars or less, the employer is a quarterly remitter for the calendar year next succeeding such twelve-month period. Notwithstanding any provision of this section, if an employer is a seasonal employer, the annual determination shall be based on the seasonal employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period multiplied by a fraction, the numerator of which is four, and the denominator of which is the number of quarterly periods during such twelve-month period that the employer paid wages to employees.

(B) The annual determination for a payer required to deduct and withhold tax under this chapter shall be based on the payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year, provided, if any payer fails timely to file the required withholding tax return for the look-back calendar year, the commissioner may base the annual determination for the payer on any information available to the commissioner. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than ten thousand dollars, the payer is a weekly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than two thousand dollars but not more than ten thousand dollars, the payer is a monthly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was two thousand dollars or less, the payer is a quarterly remitter for the calendar year for which the annual determination is being made.

(3) (A) An employer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the Wednesday next succeeding the weekly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.

(B) A payer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the Wednesday next succeeding the weekly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

(4) (A) An employer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the fifteenth day of the month next succeeding the month during which the wages from which the tax was required to be deducted and withheld were paid to employees.

(B) A payer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the fifteenth day of the month next succeeding the month during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

(5) (A) An employer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the last day of the month next succeeding the quarterly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.

(B) A payer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the last day of the month next succeeding the quarterly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

(6) An employer that is a household employer shall pay over to the department the tax required to be deducted and withheld under this chapter on or before the April fifteenth next succeeding the calendar year during which the wages from which the tax was required to be deducted and withheld were paid to household employees.

(c) In the case of an overpayment of tax under this chapter by an employer, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld by the employer.

[(b)] (d) The amount of tax required to be deducted and withheld and paid over to the commissioner under this chapter, when so deducted and withheld, shall be held to be a special fund in trust for the state. No employee or other person shall have any right of action against the employer in respect to any moneys deducted and withheld from wages and paid over to the commissioner in compliance or in intended compliance with this chapter.

(e) As used in this section:

(1) "Employer" means an employer, as defined in Section 3401 of the Internal Revenue Code;

(2) "Payer" means a person making a payment of nonpayroll amounts to one or more payees;

(3) "Payee" means a person receiving a payment of nonpayroll amounts from a payer;

(4) "Nonpayroll amounts" includes (A) gambling winnings, other than Connecticut lottery winnings, that are paid to a resident, or to a person receiving payment on behalf of a resident, and that are subject to federal income tax withholding; (B) Connecticut lottery winnings that are required to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service, whether or not subject to federal income tax withholding, whether paid to a resident, nonresident or a part-year resident, and whether paid to an individual, trust or estate; (C) pension and annuity distributions, where the recipient is a resident individual and has requested that tax be deducted and withheld under this chapter; (D) military retired pay, where the payee is a resident individual and has requested that tax be deducted and withheld under this chapter; (E) unemployment compensation, where the recipient has requested that tax be deducted and withheld under this chapter; and (F) payments made to an athlete or entertainer, where the payments are not wages for federal income tax withholding purposes and where the commissioner requires the payer to deduct and withhold tax under this chapter;

(5) "Reported liability" means, in the case of an employer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the employer's withholding tax returns for the four quarterly periods within the twelve-month look-back period, and, in the case of a payer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the payer's withholding tax return for the look-back calendar year;

(6) "Twelve-month look-back period" means the twelve-month period that ended on the June thirtieth next preceding the calendar year for which the annual determination for an employer is made by the commissioner;

(7) "Look-back calendar year" means the calendar year preceding by two years the calendar year for which the annual determination for a payer is made by the commissioner;

(8) "Seasonal employer" means an employer that regularly in the same one or more quarterly periods of each calendar year pays no wages to employees;

(9) "Household employee" means an employee whose services of a household nature in or about a private home of an employer constitute domestic service in a private home of the employer, as the phrase is used in Section 3121(a)(7) of the Internal Revenue Code or in regulations adopted thereunder;

(10) "Household employer" means an employer of a household employee;

(11) "Weekly period" means the seven-day period beginning on a Saturday and ending on the following Friday; and

(12) "Quarterly period" means the period of three full months beginning on the first day of January, April, July or October.

Sec. 6. Subdivision (1) of subsection (j) of section 12-722 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years commencing on or after January 1, 2004):

(j) (1) No addition to tax shall be imposed under subsection (a) of this section for any taxable year if the tax shown on the return for such taxable year, or, if no return is filed, the tax, reduced by the tax withheld under this chapter, is [five hundred dollars or] less than one thousand dollars.

Sec. 7. Subsection (b) of section 12-743 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years beginning on or after January 1, 2004):

(b) The Commissioner of Revenue Services shall revise the tax return form to implement the provisions of subsection (a) of this section which form shall include spaces on the return in which taxpayers may indicate their intention to make a contribution, in a whole dollar amount, in accordance with this section. [The spaces shall include three boxes for each account with suggested whole dollar amounts, with the lowest suggested contribution being at least two dollars, and one additional box for other whole dollar amounts. ] The commissioner shall include in the instructions accompanying the tax return a description of the purposes for which the organ transplant account, the AIDS research education account, the endangered species, natural area preserves and watchable wildlife account, the breast cancer research and education account and the safety net account were created.

Sec. 8. Section 12-293a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Each licensed distributor and dealer shall file with the Commissioner of Revenue Services, on or before the twenty-fifth day of each month, a report for the calendar month immediately preceding in such form and containing such information as the commissioner may prescribe. The return shall be accompanied by a payment of the amount of the tax shown to be due thereon. The commissioner by regulation may exempt from the monthly reporting requirements of this section those distributors and dealers who do not acquire unstamped cigarettes and in lieu thereof may require an annual report, prescribed as to form by the Commissioner of Revenue Services and bearing notice to the effect that false statements made in such report are punishable, if, in the commissioner's discretion, the enforcement of this chapter would not be adversely affected.

(b) Each licensed distributor or dealer who owns or operates more than five cigarette vending machines shall file with the Commissioner of Revenue Services, on or before the fifteenth day of each month, a report in such form as the commissioner may prescribe for the calendar month immediately preceding, which report shall disclose the number of cigarette vending machines owned, operated, acquired and disposed of by him, together with such other information as the commissioner shall require. Each licensed distributor or dealer who owns or operates not more than five cigarette vending machines shall file such report with the commissioner semiannually, at such time and in such form as the commissioner may prescribe.

[(c) The commissioner may, by regulations adopted in accordance with chapter 54, require that each distributor and dealer report the names and addresses of their customers annually, with changes in such lists to be reported to the commissioner monthly not later than the twenty-fifth day of each month. ]

[(d)] (c) If any person fails to pay the amount of tax reported due on its report within the time specified under this section, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid, or fifty dollars, whichever is greater. No person shall be subject to a penalty under both this section and subsection (b) of section 12-309. 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.

[(e)] (d) 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 was due to reasonable cause and was not intentional or due to neglect.

Sec. 9. Subsection (a) of section 12-306b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Any person required under this chapter to pay any tax, or required under this chapter or by regulations adopted in accordance with the provisions of section [12-293a or] 12-313 to make a report, keep any records or supply any information, who wilfully fails to pay such tax, make such report, 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 section, person includes any officer or employee of a corporation or a member or employee of a partnership under a duty to pay such tax, to make such report, keep such records or supply such information.

Sec. 10. Section 26-237b of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to calendar quarters commencing on and after July 1, 2004):

(a) There is established and created a fund to be known as the "Shellfish Fund". [Any revenue collected pursuant to section 26-237c and the] The proceeds of any bonds authorized for the purpose of section 26-237a, as amended, shall be deposited in the fund. Any balance remaining in said fund at the end of any fiscal year shall be carried forward in said fund for the fiscal year next succeeding.

(b) The fund shall be used by the Commissioner of Agriculture for the program established under section 26-237a, as amended.

Sec. 11. Subdivision (5) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to sales occurring on or after January 1, 2002):

(5) (A) Sales of tangible personal property or services to and by nonprofit charitable hospitals in this state, nonprofit nursing homes, nonprofit rest homes and nonprofit residential care homes licensed by the state pursuant to chapter 368v for the exclusive purposes of such institutions except any such service transaction as described in subparagraph (EE) of subdivision (37) of subsection (a) of section 12-407, as amended.

(B) Sales of tangible personal property by any organization that is exempt from federal income tax under Section 501(a) 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 that the United States Treasury Department has expressly determined, by letter, to be an organization that is described in Section 501(c)(3) of said internal revenue code, which sales are made on the premises of a hospital.

Sec. 12. Subdivision (5) of section 12-412 of the general statutes, as amended by section 54 of public act 03-6 of the June 30 special session, is repealed and the following is substituted in lieu thereof (Effective July 1, 2005, and applicable to sales occurring on or after January 1, 2002):

(5) (A) Sales of tangible personal property or services to and by nonprofit charitable hospitals in this state, nonprofit nursing homes, nonprofit rest homes and nonprofit residential care homes licensed by the state pursuant to chapter 368v for the exclusive purposes of such institutions except any such service transaction as described in subparagraph (EE) of subdivision (37) of subsection (a) of section 12-407, as amended, and sales of medical equipment and supplies for patient care to and by acute care, for-profit hospitals for the exclusive purposes of such institutions, except any such service transaction as described in subparagraph (EE) of subdivision (37) of subsection (a) of section 12-407, as amended.

(B) Sales of tangible personal property by any organization that is exempt from federal income tax under Section 501(a) 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 that the United States Treasury Department has expressly determined, by letter, to be an organization that is described in Section 501(c)(3) of said internal revenue code, which sales are made on the premises of a hospital.

Sec. 13. (Effective from passage and applicable to calendar quarters commencing on and after July 1, 2004) Section 26-237c of the general statutes is repealed.

Approved June 3, 2004