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.
(3) With respect to income years commencing on or after January 1, 2003, and
prior to January 1, 2004, 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) or
section 91 of public act 03-1 of the June 30 special session*, 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.
(4) With respect to income years commencing on or after January 1, 2004, and
prior to January 1, 2005, 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-five per cent of the tax calculated under said subsection (a)
or section 91 of public act 03-1 of the June 30 special session*, for such income year,
without reduction of the tax so calculated by the amount of any credit against such tax,
except that any company that pays the minimum tax of two hundred fifty dollars under
section 12-219 or 12-223c for such income year shall not be subject to the additional
tax imposed by this subdivision. The additional amount of tax determined under this
subdivision 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; P.A. 03-2, S. 32; June 30 Sp. Sess. P.A.
03-1, S. 87.)
*Note: Section 91 of public act 03-1 of the June 30 special session was repealed by section 248 of public act 03-6 of
the June 30 special session.
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; P.A. 03-2 amended Subsec. (b) to add Subdiv. (3) re surcharge for the 2003 income year, effective
February 28, 2003, and applicable to income years commencing on or after January 1, 2003; June 30 Sp. Sess. P.A. 03-1
amended Subsec. (b) to include in surcharge provided under Subdiv. (3) amounts calculated under Sec. 91 of P.A. 03-1
of the June 30 special session and to add Subdiv. (4) re surcharge for the 2004 income year, effective August 16, 2003,
and applicable to income years commencing on or after January 1, 2003.
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.
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.)
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.
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) For purposes of determining net income under this section, the deduction allowed for depreciation shall be determined as provided under the Internal Revenue Code
of 1986, or any subsequent corresponding internal revenue code of the United States,
as from time to time amended, provided in making such determination, the provisions
of Section 168(k) of said code shall not apply.
(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; May 9 Sp. Sess. P.A. 02-1, S. 56.)
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; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (b) to delete former Subdivs. (1) and (2) and provide for a depreciation
deduction to be determined as provided under the Internal Revenue Code, except that Section 168(k) of said code shall
not apply, effective July 1, 2002, and applicable to property placed in service after September 10, 2001, in income years
ending after said date.
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.
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.)
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.)
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".
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.)
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 31-22n,
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 31-22n, 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 31-22n. 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.
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.)
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, 2008, 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, 2008, 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; May 9 Sp. Sess. P.A. 02-4, S. 11; P.A. 04-231, S. 5.)
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; May 9 Sp. Sess. P.A. 02-4 amended Subsecs.
(a) and (b) to extend the credit until January 1, 2004, effective July 1, 2002, and applicable to income years commencing
on or after January 1, 2002; P.A. 04-231 amended Subsecs. (a) and (b) to extend the sunset dates for the credits from
January 1, 2004 to January 1, 2008, effective July 1, 2004, and applicable to income years commencing on or after January
1, 2004.
Sec. 12-217j. Tax credit for research and experimental expenditures. (a) There
shall be allowed as a credit against the tax imposed on any corporation under this chapter,
with respect to income years of such corporation commencing on or after January 1,
1994, an amount equal to twenty 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 income
year of such corporation for such expenditures.
(b) (1) With respect to any income year commencing on or after January 1, 2000,
a credit or any portion of a credit that is allowed under this section but that 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 by a taxpayer be carried forward for a period of more
than fifteen years.
(2) (A) With respect to any income year commencing on or after January 1, 1997,
and prior to January 1, 2000, a credit or any portion of a credit that is allowed under
this section but that is not used by a biotechnology company 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 by a
biotechnology company be carried forward for a period of more than fifteen years.
(B) For purposes of this subsection, "biotechnology company" means a company
engaged in the business of applying technologies, such as recombinant DNA techniques,
biochemistry, molecular and cellular biology, genetics and genetic engineering, biological cell fusion techniques, and new bioprocesses, using living organisms, or parts of
organisms, to produce or modify products, to improve plants or animals, to develop
microorganisms for specific uses, to identify targets for small molecule pharmaceutical
development, or to transform biological systems into useful processes and products.
(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; P.A. 03-225, S. 2.)
History: P.A. 92-193 effective July 1, 1992, and applicable to taxable years of corporations commencing on or after
January 1, 1993 (Revisor's note: In codifying public act 92-193 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; P.A. 03-225 divided existing
provisions into Subsecs. (a) and (b), amended Subsec. (a) to delete obsolete references and make technical changes, and
amended Subsec. (b) to add provisions re credit for biotechnology companies after January 1, 1997, and make technical
changes, effective July 9, 2003.
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.)
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.
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.)
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 a