CHAPTER 208
CORPORATION BUSINESS TAX

Table of Contents

Sec. 12-214. Imposition of tax. Surcharge.
Sec. 12-216a. Payment of tax by companies having economic nexus with state.
Sec. 12-217. Deductions from gross income. Net income of S corporations. Regulations.
Sec. 12-217dd. Tax credit for donation of open space.
Sec. 12-217jj. Film production tax credit. Regulations.
Sec. 12-217kk. Tax credit for infrastructure projects in the entertainment industry. Regulations.
Sec. 12-217ll. Tax credit for digital animation production companies. Regulations.
Sec. 12-217mm. Tax credit for green buildings. Regulations.
Sec. 12-219. Additional tax in the amount by which alternative computations exceed tax under section 12-214. Minimum tax. Surcharge.
Sec. 12-223f. Preference tax due from corporations filing a combined return.

PART I
IMPOSITION AND PAYMENT OF TAX

      Sec. 12-214. Imposition of tax. Surcharge. (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) 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) 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.

      (5) With respect to income years commencing on or after January 1, 2006, and prior to January 1, 2007, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, except when the tax so calculated is equal to two hundred fifty dollars, 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.

      (6) (A) With respect to income years commencing on or after January 1, 2009, and prior to January 1, 2012, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, 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.

      (B) Any company whose gross income for the income year was less than one hundred million dollars shall not be subject to the additional tax imposed under subparagraph (A) of this subdivision. This exception shall not apply to companies filing a combined return for the income year under section 12-223a or a unitary return under subsection (d) of section 12-218d.

      (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; P.A. 05-251, S. 62; P.A. 06-186, S. 66; June Sp. Sess. P.A. 09-3, S. 94.)

      History: 1959 acts changed technical language of statute, added exclusion in Subsec. (2) for companies which elect not to be subject to such tax, applied 3.75% 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% 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 5% tax rates to years beginning before January 1, 1966, and increased rates for years thereafter to 5.25%; 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 5.25% for years beginning after January 1, 1971, and, in the case of companies other than telephone companies, made 5.25% rate applicable to years before January 1, 1969, and set rate for period between that date and January 1, 1971, at 8%; 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 8% 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 2%, 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 8% rate to 10% 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 10% to 11.5%, 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 15% to 20% 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 20% additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a 10% 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 added new Subsec. (a)(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 11% to 10.75% for the income years commencing on or after January 1, 1996, and prior to January 1, 1997, 9.5% for the income years commencing on or after January 1, 1998, and prior to January 1, 1999, 8.5% for the income years commencing on or after January 1, 1999, and prior to January 1, 2000, and 7.5% 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 added Subsec. (b)(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; P.A. 05-251 amended Subsec. (b) by deleting references to Sec. 91 of June 30 Sp. Sess. P.A. 03-1 in Subdivs. (3) and (4) and by adding Subdivs. (5) and (6) re surcharge for 2006 and 2007 income years, respectively, effective June 30, 2005, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 deleted former Subsec. (b)(6) re surcharge in income years commencing on or after January 1, 2007, and prior to January 1, 2008, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; June Sp. Sess. P.A. 09-3 amended Subsec. (b) to add Subdiv. (6) re surcharge for 2009, 2010 and 2011 income years and exemption for companies with gross income less than $100,000,000, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009.

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      Sec. 12-216a. Payment of tax by companies having economic nexus with state. Any company that derives income from sources within this state, or that has a substantial economic presence within this state, evidenced by a purposeful direction of business toward this state, examined in light of the frequency, quantity and systematic nature of a company's economic contacts with this state, without regard to physical presence, and to the extent permitted by the Constitution of the United States, shall be liable for the tax imposed under this chapter. Such company shall apportion its net income under the provisions of this chapter.

      (June Sp. Sess. P.A. 09-3, S. 90.)

      History: June Sp. Sess. P.A. 09-3 effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010.

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      Sec. 12-217. Deductions from gross income. Net income of S corporations. Regulations. (a)(1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, and (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land.

      (2) No deduction shall be allowed for (A) expenses related to dividends which are allowable as a deduction or credit under the Internal Revenue Code and (B) federal taxes on income or profits, losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, interest received from federal, state and local government securities, if any such deductions are allowed by the federal government.

      (3) Notwithstanding any provision of this section to the contrary, no dividend received from a real estate investment trust shall be deductible under this section by the recipient unless the dividend is: (A) Deductible under Section 243 of the Internal Revenue Code; or (B) received by a qualified dividend recipient from a qualified real estate investment trust and, as of the last day of the period for which such dividend is paid, persons, not including the qualified dividend recipient or any person that is either a related person to, or an employee or director of, the qualified dividend recipient, have outstanding cash capital contributions to the qualified real estate investment trust that, in the aggregate, exceed five per cent of the fair market value of the aggregate real estate assets, valued as of the last day of the period for which such dividend is paid, then held by the qualified real estate investment trust. For purposes of this section, a "related person" is as defined in subdivision (7) of subsection (a) of section 12-217m, "real estate assets" is as defined in Section 856 of the Internal Revenue Code, a "qualified dividend recipient" means a dividend recipient who has invested in a qualified real estate investment trust prior to April 1, 1997, and a "qualified real estate investment trust" means an entity that both was incorporated and had contributed to it a minimum of five hundred million dollars worth of real estate assets prior to April 1, 1997, and that elects to be a real estate investment trust under Section 856 of the Internal Revenue Code prior to April 1, 1998.

      (4) Notwithstanding anything in this section to the contrary, (A) any excess of the deductions provided in this section for any income year commencing on or after January 1, 1973, over the gross income for such year or the amount of such excess apportioned to this state under the provisions of section 12-218, shall be an operating loss of such income year and shall be deductible as an operating loss carry-over for operating losses incurred prior to income years commencing January 1, 2000, in each of the five income years following such loss year, and for operating losses incurred in income years commencing on or after January 1, 2000, in each of the twenty income years following such loss year, provided the portion of such operating loss which may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of (i) any net income greater than zero of such income year following such loss year, or in the case of a company entitled to apportion its net income under the provisions of section 12-218, the amount of such net income which is apportioned to this state pursuant thereto, or (ii) the excess, if any, of such operating loss over the total of such net income for each of any prior income years following such loss year, such net income of each of such prior income years following such loss year for such purposes being computed without regard to any operating loss carry-over from such loss year allowed by this subparagraph and being regarded as not less than zero, and provided, further, the operating loss of any income year shall be deducted in any subsequent year, to the extent available therefor, before the operating loss of any subsequent income year is deducted, and (B) any net capital loss, as defined in the Internal Revenue Code effective and in force on the last day of the income year, for any income year commencing on or after January 1, 1973, shall be allowed as a capital loss carry-over to reduce, but not below zero, any net capital gain, as so defined, in each of the five following income years, in order of sequence, to the extent not exhausted by the net capital gain of any of the preceding of such five following income years, and (C) any net capital losses allowed and carried forward from prior years to income years beginning on or after January 1, 1973, for federal income tax purposes by companies entitled to a deduction for dividends paid under the Internal Revenue Code other than companies subject to the gross earnings taxes imposed under chapters 211 and 212, shall be allowed as a capital loss carry-over.

      (5) This section shall not apply to a life insurance company as defined in the Internal Revenue Code effective and in force on the last day of the income year. For purposes of this section, the unpaid loss reserve adjustment required for nonlife insurance companies under the provisions of Section 832(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall be applied without making the adjustment in Subparagraph (B) of said Section 832(b)(5).

      (b) (1) For purposes of determining net income under this section, the deduction allowed for depreciation 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.

      (2) (A) For purposes of determining net income under this section for taxable years ending after December 31, 2008, and to the extent any income from the discharge of indebtedness, under Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in said Section 108, as amended by said Section 1231, is not properly includable in gross income for federal income tax purposes for the taxable year, any deferral of the recognition of any such income shall not be allowed.

      (B) To the extent that any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, is properly includable in gross income for federal income tax purposes for the taxable year, any such income shall be deductible in computing net income under this section for a taxable year ending after December 31, 2008, to the extent that the deferral of recognition of such income from such discharge was not allowed pursuant to subparagraph (A) of this subdivision in computing net income for a preceding taxable year.

      (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; June Sp. Sess. P.A. 09-3, S. 95; June 19 Sp. Sess. P.A. 09-2, S. 4.)

      History: 1961 act added Subdiv. (2); 1963 act extended exception in Subdiv. (2) to all taxpayers for year 1963 and thereafter; 1971 acts added provisions applicable to taxpayers whose income reported in consolidated return and changed 2.5% rate to 60% 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 60% interest by 10% each year beginning in 1973 until 100% level reached; P.A. 73-350 changed 5% rate for other taxpayers to 90% in 1973 and 100% 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 88% 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 30% of dividends received from a domestic corporation in which the taxpayer owns less than 20% 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 added Subsec. (a)(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 Sec. 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; June Sp. Sess. P.A. 09-3 amended Subsec. (a)(1) by adding Subpara. (A)(iii) re qualified domestic production activities income, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009; June 19 Sp. Sess. P.A. 09-2 amended Subsec. (b) by designating existing provision as Subdiv. (1) and adding Subdiv. (2) re treatment of income from discharge of indebtedness, effective June 22, 2009, and applicable to taxable years ending after December 31, 2008.

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      Sec. 12-217dd. Tax credit for donation of open space. (a) For purposes of this section, "donation of open space land" means the value of any land or interest in land conveyed without financial consideration, or the value of any discount of the sale price in any sale of land or interest in land, to the state, a political subdivision of the state, a water company, as defined in section 25-32a, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or used as a public water supply source.

      (b) There shall be allowed a credit for all taxpayers against the tax imposed under section 12-217, in an amount equal to fifty per cent of any donation of open space land or as a public water supply source. For purposes of calculating the credit under this section, the amount of donation shall be based on the use value of the donated open space land and the amount received for such land. For purposes of this subsection, "use value" means the fair market value of land at its highest and best use, as determined by a certified real estate appraiser.

      (c) A credit that is allowed under this section, with respect to any taxable year commencing on or after January 1, 2000, but is not used by a taxpayer may be carried forward to each of the successive income years until such credit is fully taken. In no case shall a credit that is not used be carried forward for a period of more than twenty-five years.

      (P.A. 99-173, S. 47, 65; P.A. 00-203, S. 6, 8, 11; P.A. 04-200, S. 2; June Sp. Sess. P.A. 09-3, S. 96.)

      History: P.A. 99-173 effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 00-203 amended Subsec. (b) by defining use value, effective June 7, 2000, and applicable to all open space land donations made on or after income year commencing January 1, 1999, and added Subsec. (c) re tax credit carry forward, effective July 1, 2000; P.A. 04-200 amended Subsec. (a) to add interest in land to definition, to add a water company to the type of recipients permitted, and to add use as a public water supply source as a type of use permitted, amended Subsec. (b) to add "or as a public water supply source" and "and the amount received for such land", and amended Subsec. (c) to replace "ten" with "fifteen", effective June 3, 2004; June Sp. Sess. P.A. 09-3 amended Subsec. (c) to extend carry-forward period from 15 years to 25 years, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009.

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      Sec. 12-217jj. Film production tax credit. Regulations. (a) As used in this section:

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

      (2) "Department" means the Department of Economic and Community Development.

      (3) (A) "Qualified production" means entertainment content created in whole or in part within the state, including motion pictures; documentaries; long-form, specials, mini-series, series, sound recordings, videos and music videos and interstitials television programming; interactive television; interactive games; videogames; commercials; any format of digital media, including an interactive web site, created for distribution or exhibition to the general public; and any trailer, pilot, video teaser or demo created primarily to stimulate the sale, marketing, promotion or exploitation of future investment in either a product or a qualified production via any means and media in any digital media format, film or videotape, provided such program meets all the underlying criteria of a qualified production.

      (B) "Qualified production" shall not include any ongoing television program created primarily as news, weather or financial market reports, a production featuring current events, sporting events, an awards show or other gala event, a production whose sole purpose is fundraising, a long-form production that primarily markets a product or service, a production used for corporate training or in-house corporate advertising or other similar productions, or any production for which records are required to be maintained under 18 USC 2257 with respect to sexually explicit content.

      (4) "Eligible production company" means a corporation, partnership, limited liability company, or other business entity engaged in the business of producing qualified productions on a one-time or ongoing basis, and qualified by the Secretary of the State to engage in business in the state.

      (5) "Production expenses or costs" means all expenditures clearly and demonstrably incurred in the state in the development, preproduction, production or postproduction costs of a qualified production, including:

      (A) Expenditures incurred in the state in the form of either compensation or purchases including production work, production equipment not eligible for the infrastructure tax credit provided in section 12-217kk, production software, postproduction work, postproduction equipment, postproduction software, set design, set construction, props, lighting, wardrobe, makeup, makeup accessories, special effects, visual effects, audio effects, film processing, music, sound mixing, editing, location fees, soundstages and any and all other costs or services directly incurred in connection with a state-certified qualified production;

      (B) Expenditures for distribution, including preproduction, production or postproduction costs relating to the creation of trailers, marketing videos, commercials, point-of-purchase videos and any and all content created on film or digital media, including the duplication of films, videos, CDs, DVDs and any and all digital files now in existence and those yet to be created for mass consumer consumption; the purchase, by a company in the state, of any and all equipment relating to the duplication or mass market distribution of any content created or produced in the state by any digital media format which is now in use and those formats yet to be created for mass consumer consumption; and

      (C) "Production expenses or costs" does not include the following: (i) On and after January 1, 2008, compensation in excess of fifteen million dollars paid to any individual or entity representing an individual, for services provided in the production of a qualified production and on or after January 1, 2010, compensation subject to Connecticut personal income tax in excess of twenty million dollars paid in the aggregate to any individuals or entities representing individuals, for star talent provided in the production of a qualified production; (ii) media buys, promotional events or gifts or public relations associated with the promotion or marketing of any qualified production; (iii) deferred, leveraged or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including, but not limited to, producer fees, director fees, talent fees and writer fees; (iv) costs relating to the transfer of the production tax credits; (v) any amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the qualified production; and (vi) any expenses or costs relating to an independent certification, as required by subsection (c) of this section, or as the department may otherwise require, pertaining to the amount of production expenses or costs set forth by an eligible production company in its application for a production tax credit.

      (6) "Sound recording" means a recording of music, poetry or spoken-word performance, but does not include the audio portions of dialogue or words spoken and recorded as part of a motion picture, video, theatrical production, television news coverage or athletic event.

      (7) "State-certified qualified production" means a qualified production produced by an eligible production company that (A) is in compliance with regulations adopted pursuant to subsection (g) of this section, (B) is authorized to conduct business in this state, and (C) has been approved by the department as qualifying for a production tax credit under this section.

      (8) "Interactive web site" means a web site, the production costs of which (A) exceed five hundred thousand dollars per income year, and (B) is primarily (i) interactive games or end user applications, or (ii) animation, simulation, sound, graphics, story lines or video created or repurposed for distribution over the Internet. An interactive web site does not include a web site primarily used for institutional, private, industrial, retail or wholesale marketing or promotional purposes, or which contains obscene content.

      (9) "Post-certification remedy" means the recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.

      (b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for eligible production companies producing a state-certified qualified production in the state.

      (A) For income years commencing on or after January 1, 2006, but prior to January 1, 2010, any eligible production company incurring production expenses or costs in excess of fifty thousand dollars shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to thirty per cent of such production expenses or costs.

      (B) For income years commencing on or after January 1, 2010, (i) any eligible production company incurring production expenses or costs of not less than one hundred thousand dollars, but not more than five hundred thousand dollars, shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to ten per cent of such production expenses or costs, (ii) any such company incurring such expenses or costs of more than five hundred thousand dollars, but not more than one million dollars, shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to fifteen per cent of such production expenses or costs, and (iii) any such company incurring such expenses or costs of more than one million dollars shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to thirty per cent of such production expenses or costs.

      (C) No eligible production company incurring an amount of production expenses or costs that qualifies for such credit shall be eligible for such credit unless on or after January 1, 2010, such company conducts not less than fifty per cent of principal photography days within the state or expends not less than fifty per cent of postproduction costs within the state.

      (D) (i) For income years commencing on or after January 1, 2009, but prior to January 1, 2010, fifty per cent of production expenses or costs shall be counted toward such credit when incurred outside the state and used within the state, and one hundred per cent of such expenses or costs shall be counted toward such credit when incurred within the state and used within the state.

      (ii) For income years commencing on or after January 1, 2010, no expenses or costs incurred outside the state and used within the state shall be eligible for a credit, and one hundred per cent of such expenses or costs shall be counted toward such credit when incurred within the state and used within the state.

      (2) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, any credit allowed pursuant to this subsection may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times.

      (3) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, all or part of any such credit allowed under this subsection shall be claimed against the tax imposed under chapter 207 or this chapter for the income year in which the production expenses or costs were incurred, or in the three immediately succeeding income years. Any production tax credit allowed under this subsection shall be nonrefundable.

      (c) (1) An eligible production company shall apply to the department for a tax credit voucher on an annual basis, but not later than ninety days after the first production expenses or costs are incurred in the production of a qualified production, and shall provide with such application such information as the department may require to determine such company's eligibility to claim a credit under this section. No production expenses or costs may be listed more than once for purposes of the tax credit voucher pursuant to this section, or pursuant to section 12-217kk or 12-217ll, and if a production expense or cost has been included in a claim for a credit, such production expense or cost may not be included in any subsequent claim for a credit.

      (2) Not later than ninety days after the end of the annual period, or after the last production expenses or costs are incurred in the production of a qualified production, an eligible production company shall apply to the department for a production tax credit voucher, and shall provide with such application such information and independent certification as the department may require pertaining to the amount of such company's production expenses or costs. Such independent certification shall be provided by an audit professional chosen from a list compiled by the department. If the department determines that such company is eligible to be issued a production tax credit voucher, the department shall enter on the voucher the amount of production expenses or costs that has been established to the satisfaction of the department and the amount of such company's credit under this section. The department shall provide a copy of such voucher to the commissioner, upon request.

      (3) The department shall charge a reasonable administrative fee sufficient to cover the department's costs to analyze applications submitted under this section.

      (d) If an eligible production company sells, assigns or otherwise transfers a credit under this section to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. The notification after each transfer shall include the credit voucher number, the date of transfer, the amount of such credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee, and any other information required by the department. Failure to comply with this subsection will result in a disallowance of the tax credit until there is full compliance on the part of the transferor and the transferee, and for a second or third transfer, on the part of all subsequent transferors and transferees. The department shall provide a copy of the notification of assignment to the commissioner upon request.

      (e) Any eligible production company that submits information to the department that it knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such company's credit entered on the production tax credit certificate issued under this section.

      (f) No tax credits transferred pursuant to this section shall be subject to a post-certification remedy, and the department and the commissioner shall have no right, except in the case of possible material misrepresentation or fraud, to conduct any further or additional review, examination or audit of the expenditures or costs for which such tax credits were issued. The sole and exclusive remedy of the department and the commissioner shall be to seek collection of the amount of such tax credits from the entity that committed the fraud or misrepresentation.

      (g) The department, in consultation with the commissioner, shall adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.

      (P.A. 06-83, S. 20; 06-186, S. 83; 06-187, S. 79; P.A. 07-236, S. 1; June Sp. Sess. P.A. 07-4, S. 69, 70; June Sp. Sess. P.A. 07-5, S. 13; P.A. 08-142, S. 1; June Sp. Sess. P.A. 09-3, S. 97; Sept. Sp. Sess. P.A. 09-8, S. 1-3.)

      History: P.A. 06-83 effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 amended Subsec. (a) to redefine "qualified production" by deleting exception and changing reference to obscene material and to redefine "production expenses or costs" by eliminating requirement that they be in cash, requiring intellectual property to be produced primarily in state, requiring expenditures to be incurred within state rather than paid to persons authorized to do business in state, eliminating provision allowing commissioner to determine other production expenses or costs, exempting talent fees and making technical changes, amended Subsec. (b) by replacing former provisions with provisions allowing any eligible production company to receive 30% credit and allowing a three-year carryforward, eliminated former Subsec. (c) re wage tax credit, redesignated existing Subsec. (d) as new Subsec. (c) and made conforming changes therein, eliminated former Subsec. (e) re carryforward period, inserted new Subsec. (d) re procedure upon transfer of credit, and redesignated existing Subsec. (f) as new Subsec. (e) and amended same to require the commission, in consultation with the commissioner, to adopt regulations, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 06-187 amended Subsec. (f) to require the commission, in consultation with the commissioner, to adopt regulations, effective July 1, 2006 (Revisor's note: In Subsec. (a)(6)(A), a reference to "subsection (f) of this section" was changed editorially by the Revisors to "subsection (e) of this section", for accuracy); P.A. 07-236 amended Subsec. (a) to redefine "qualified production" and "production expenses or costs" and add definitions of "sound recording", "interactive web site" and "post-certification remedy", amended Subsec. (b) to divide existing provisions into Subdivs. (1) to (3) and, in Subdiv. (1), to apply credit to taxes due under chapter 207 and add Subpara. (A) re expenses or costs on and after January 1, 2009, and Subpara. (B) re expenses or costs on and after January 1, 2012, and, in Subdiv. (2), to limit credit transfers to three times, amended Subsec. (c) to add provisions in Subdiv. (1) to prohibit limit on listing expenses or costs on a tax credit voucher more than one once, to add new Subdiv. (2) re requirements for applying for tax credit vouchers, and to redesignate existing Subdiv. (2) as Subdiv. (3), amended Subsec. (d) to add provisions re second or third transfers, added new Subsec (e) re submission of false or fraudulent information and Subsec. (f) re post-certification remedy, redesignated existing Subsec. (e) as Subsec. (g) and made conforming changes throughout, effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; June Sp. Sess. P.A. 07-4 amended Subsec. (a) by making a technical change in Subdiv. (3)(A) and inserting "in the state" re expenditures incurred in Subdiv. (5), effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007, and amended Subsec. (c) by inserting "and independent certification" in Subdivs. (2) and (3), effective July 1, 2007; June Sp. Sess. P.A. 07-5 amended Subsec. (f) to substitute "commission" for "commissioner" re issuance of tax credit voucher and make technical changes, effective October 6, 2007; P.A. 08-142 amended Subsec. (b) by changing eligibility date in Subdiv. (1) from income years commencing on or after January 1, 2007, to income years commencing on or after January 1, 2006, and amending Subdivs. (2) and (3) to specify that provisions are applicable on and after July 1, 2006, for income years commencing on or after January 1, 2006, effective June 5, 2008; June Sp. Sess. P.A. 09-3 made changes throughout to transfer responsibility for program from Commission on Culture and Tourism to Department of Economic and Community Development, amended Subsec. (a) by deleting infomercials from definition of "qualified production" in Subdiv. (3)(A) and removing compensation in excess of $20,000,000 and costs of independent certification from definition of "production expenses or costs" in Subdiv. (5)(C), amended Subsec. (b)(1) by designating existing provisions re income years on or after January 1, 2006, as new Subpara. (A), amending same to make applicable prior to January 1, 2010, and replacing former Subparas. (A) and (B) with new Subparas. (B) to (D) re spending and in-state work required to qualify for credit, amended Subsec. (c) by deleting former Subdiv. (2) re interim voucher, redesignating existing Subdiv. (3) as Subdiv. (2), amending same to add provision re independent certification provided by audit professional chosen from list, and adding new Subdiv. (3) re administrative fee, amended Subsec. (e) by deleting "wilfully" re submission of information, and amended Subsec. (f) by replacing former provisions with provisions re post-certification remedy, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010; Sept. Sp. Sess. P.A. 09-8 amended Subsec. (b) by replacing "not less than five hundred thousand one dollars" with "more than five hundred thousand dollars" in Subdiv. (1)(B)(ii), adding provision re postproduction costs in Subdiv. (1)(C) and inserting "all or part of" re credit in Subdiv. (3), effective October 5, 2009.

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      Sec. 12-217kk. Tax credit for infrastructure projects in the entertainment industry. Regulations. (a) As used in this section:

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

      (2) "Department" means the Department of Economic and Community Development.

      (3) "Infrastructure project" means a capital project to provide basic buildings, facilities or installations needed for the functioning of the digital media and motion picture industry in this state.

      (4) "State-certified project" means an infrastructure project undertaken in this state by an entity that (A) is in compliance with regulations adopted pursuant to subsection (e) of this section, (B) is authorized to conduct business in this state, (C) is not in default on a loan made by the state or a loan guaranteed by the state, nor has ever declared bankruptcy under which an obligation of the entity to pay or repay public funds was discharged as a part of such bankruptcy, and (D) has been approved by the department as qualifying for an infrastructure tax credit under this section.

      (5) "Post-certification remedy" means the recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.

      (b) (1) (A) For income years commencing prior to January 1, 2010, there shall be allowed a state-certified project credit against the tax imposed under chapter 207 or this chapter to any taxpayer that invests in a state-certified project. Such credit may be in the following amounts: (i) For state-certified projects costing greater than fifteen thousand dollars and less than one hundred fifty thousand dollars, each taxpayer may be allowed a tax credit of ten per cent of the investment made by such taxpayer; (ii) for state-certified projects costing one hundred fifty thousand dollars or more, but less than one million dollars, each taxpayer may be allowed a tax credit of fifteen per cent of the investment made by such taxpayer; and (iii) for state-certified projects costing one million dollars or more, each taxpayer may be allowed a tax credit of twenty per cent of the investment made by such taxpayer.

      (B) For income years commencing on or after January 1, 2010, there shall be allowed a state-certified project credit against the tax imposed under chapter 207 or this chapter to any taxpayer that invests three million dollars or more in a state-certified project in an amount equal to twenty per cent of the investment made by such taxpayer.

      (2) Eligible expenditures pursuant to this section shall include the following: All expenditures for a capital project to provide buildings, facilities or installations, whether leased or purchased, together with necessary equipment for a film, video, television, digital production facility or digital animation production facility; project development, including design, professional consulting fees and transaction costs; development, preproduction, production, post-production and distribution equipment and system access; and fixtures and other equipment.

      (3) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, and such taxpayers may sell, assign or otherwise transfer, in whole or in part, such credit. Any taxpayer holding such credit may claim such credit only for the income year in which expenditures were made by the taxpayer for the infrastructure project.

      (4) Any credit allowed pursuant to this section shall be claimed against the tax imposed under chapter 207 or this chapter. If the amount of the credit allowable under this section exceeds the sum of any taxes due from a taxpayer, any such excess amount of the credit allowable under this section may be taken in any of the three immediately succeeding income years.

      (5) Any tax credit earned under this section shall be nonrefundable.

      (c) (1) An entity undertaking an infrastructure project shall apply to the department for an eligibility certificate not later than ninety days after the first expenses or costs are incurred, and shall provide with such application such information as the department may require to determine such infrastructure project's eligibility as a state-certified project.

      (2) Each application for an eligibility certificate shall include: (A) A detailed description of the infrastructure project; (B) a preliminary budget; (C) estimated completion date; and (D) such other information as the department may require. The department may require an independent audit of all project costs and expenditures prior to certification. If the department determines that such project is eligible to be a state-certified project, the department shall indicate the amount of costs or expenditures that has been established to the satisfaction of the department, and issue to such entity a tax credit certification letter for investors indicating the amount of tax credits available under this section. The department shall provide a copy of such letter to the commissioner, upon request.

      (3) Prior to the issuance of a state-certified project tax credit voucher to a taxpayer based upon the tax credit certification letter issued pursuant to subdivision (2) of this subdivision, the entity undertaking such infrastructure project shall provide the department with a description of the progress on such project and an estimated completion date. The department may require an independent audit of all project costs and expenditures prior to issuance of such tax credit voucher to a taxpayer. No such tax credit voucher may be issued prior to such time as such state-certified project is shown to be one hundred per cent complete.

      (4) The department shall charge a reasonable administrative fee sufficient to cover the department's costs to analyze applications submitted under this section.

      (d) If a taxpayer sells, assigns or otherwise transfers a credit under this section to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. The notification shall include the credit certificate number, the date of transfer, the amount of such credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee and any other information required by the commissioner. After the initial issuance of a tax credit, such credit may be sold, assigned or otherwise transferred not more than three times. Failure to comply with this subsection will result in a disallowance of the tax credit until there is full compliance on both the part of the transferor and the transferee, and all subsequent transferors and transferees. The department shall provide a copy of the notification of assignment to the commissioner upon request.

      (e) No tax credits transferred pursuant to this section shall be subject to a post-certification remedy, and the department and the commissioner shall have no right, except in the case of possible material misrepresentation or fraud, to conduct any further or additional review, examination or audit of the expenditures or costs for which such tax credits were issued. The sole and exclusive remedy of the department and the commissioner shall be to seek collection of the amount of such tax credits from the entity that committed the fraud or misrepresentation.

      (f) The department, in consultation with the commissioner, shall adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.

      (P.A. 07-236, S. 2; June Sp. Sess. P.A. 07-5, S. 14; June Sp. Sess. P.A. 09-3, S. 98.)

      History: P.A. 07-236 effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; June Sp. Sess. P.A. 07-5 amended Subsec. (e) to substitute "commission" for "commissioner" re issuance of tax credit voucher and make technical changes, effective October 6, 2007; June Sp. Sess. P.A. 09-3 made changes throughout to transfer responsibility for program from Commission on Culture and Tourism to Department of Economic and Community Development, amended Subsec. (b)(1) by designating existing provisions as Subpara. (A), making conforming changes therein and adding Subpara. (B) re $3,000,000 threshold to qualify for credit on or after January 1, 2010, amended Subsec. (c) by changing completion amount required in Subdiv. (3) from 60% to 100% and adding Subdiv. (4) re administrative fee, and amended Subsec. (e) by replacing former provisions with provisions re post-certification remedy, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010.

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      Sec. 12-217ll. Tax credit for digital animation production companies. Regulations. (a) As used in this section:

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

      (2) "Department" means the Department of Economic and Community Development.

      (3) "Digital animation production company" means a corporation, partnership, limited liability company or other business entity engaged exclusively in digital animation production activity on an ongoing basis, and that is qualified by the Secretary of the State to engage in business in the state.

      (4) "State-certified digital animation production company" means a digital animation production company that (A) maintains studio facilities located within the state at which digital animation production activities are conducted, (B) employs at least two hundred full-time employees within the state, (C) is in compliance with regulations adopted pursuant to subsection (h) of this section, and (D) has been certified by the department.

      (5) "Digital animation production activity" means the creation, development and production of computer-generated animation content for distribution or exhibition to the general public, but not for the production of any material for which records are required to be maintained under 18 USC 2257 with respect to sexually explicit content.

      (6) "Full-time employee" means an employee required to work at least thirty-five hours or more per week, and who is not a temporary or seasonal employee.

      (7) "Post-certification remedy" means the recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.

      (8) "Production expenses or costs" means all expenditures clearly and demonstrably incurred in the state in the development, preproduction, production or postproduction costs of a digital animation production activity, including:

      (A) Expenditures for optioning or purchase of any intellectual property including, but not limited to, books, scripts, music or trademarks relating to the development or purchase of a script, screenplay or format, to the extent that such expenditures are less than thirty-five per cent of the production expenses or costs incurred by a digital animation production company in any income year. Such expenses or costs shall include all expenditures generally associated with the optioning or purchase of intellectual property, including option money, agent fees and attorney fees relating to the transaction, but shall not include any and all deferrals, deferments, profit participation or recourse or nonrecourse loans which the digital animation production company may negotiate in order to obtain the rights to the intellectual property;

      (B) Expenditures incurred in the form of either compensation or purchases including production work, production equipment not eligible for the infrastructure tax credit provided in section 12-217kk, production software, postproduction work, postproduction equipment, postproduction software, set design, set construction, props, lighting, wardrobe, makeup, makeup accessories, special effects, visual effects, audio effects, actors, voice talent, film processing, music, sound mixing, editing, location fees, soundstages, rent, utilities, insurance, administrative support, systems support, all reasonably-related expenses in connection with digital animation production activity, and any and all other costs or services directly incurred in the state in connection with a state-certified digital animation production company;

      (C) Expenditures for distribution, including preproduction, production or postproduction costs relating to the creation of trailers, marketing videos, short films, commercials, point-of-purchase videos and any and all content created on film or digital media, including the duplication of films, videos, CDs, DVDs and any and all digital files now in existence and those yet to be created for mass consumer consumption; the purchase, by a company in the state, of any and all equipment relating to the duplication or mass market distribution of any content created or produced in the state by any digital media format which is now in use and those formats yet to be created for mass consumer consumption; and

      (D) "Production expenses or costs" does not include the following: (i) Compensation in excess of fifteen million dollars paid to any individual or entity representing an individual, for services provided in a digital animation production activity and, on or after January 1, 2010, compensation subject to Connecticut personal income tax in excess of twenty million dollars paid in the aggregate to any individuals or entities representing individuals, for star talent provided in a digital animation production activity; (ii) media buys, promotional events or gifts or public relations associated with the promotion or marketing of any digital animation production activity; (iii) deferred, leveraged or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including, but not limited to, producer fees, director fees, talent fees and writer fees; (iv) costs relating to the transfer of the digital animation tax credits; (v) any amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the digital animation production activity; and (vi) any expenses or costs relating to an independent certification, as required by subsection (c) of this section, or as the department may otherwise require, pertaining to the amount of production expenses or costs set forth by a state-certified digital animation company in its application for a digital animation tax credit.

      (b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for digital animation production companies undertaking digital animation production activity in the state.

      (A) For income years commencing on or after January 1, 2007, but prior to January 1, 2010, any state-certified digital animation production company incurring production expenses or costs in excess of fifty thousand dollars shall be eligible for a credit against the tax imposed under chapter 207 or this chapter, equal to thirty per cent of such production expenses or costs.

      (B) For income years commencing on or after January 1, 2010, (i) any state-certified digital animation production company incurring production expenses or costs of not less than one hundred thousand dollars, but not more than five hundred thousand dollars, shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to ten per cent of such production expenses or costs, (ii) any such company incurring such expenses or costs of more than five hundred thousand dollars, but not more than one million dollars, shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to fifteen per cent of such production expenses or costs, and (iii) any such company incurring such expenses or costs of more than one million dollars shall be eligible for a credit against the tax imposed under chapter 207 or this chapter equal to thirty per cent of such production expenses or costs.

      (2) Any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times.

      (3) All or part of any credit allowed pursuant to this section shall be claimed against the tax imposed under chapter 207 or this chapter, for the income year in which the production expenses or costs were incurred, or in the three immediately succeeding income years. Any digital animation tax credit allowed under this section shall be nonrefundable.

      (4) Any digital animation production company receiving a digital animation tax credit pursuant to this section shall not be eligible to apply for or receive a tax credit pursuant to section 12-217jj.

      (c) (1) Not more frequently than twice during the income year of a state-certified digital animation production company, such company may apply to the department for a digital animation tax credit voucher, and shall provide with such application such information and independent certification as the department may require pertaining to the amount of such company's production expenses or costs incurred during the period for which such application is made. Such independent certification shall be provided by an audit professional chosen from a list compiled by the department. If the department determines that the company is eligible to be issued a tax credit voucher, the department shall enter on the voucher the amount of production expenses and costs incurred during the period for which the voucher is issued and the amount of tax credits issued pursuant to such voucher. The department shall provide a copy of such voucher to the commissioner upon request.

      (2) The department shall charge a reasonable administrative fee sufficient to cover the department's costs to analyze applications submitted under this section.

      (d) If a state-certified digital animation production company sells, assigns or otherwise transfers a credit under this section to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer. The notification after each transfer shall include the credit voucher number, the date of transfer, the amount of such credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee, and any other information required by the department. Failure to comply with this subsection will result in a disallowance of the tax credit until there is full compliance on the part of the transferor and the transferee, and for a second or third transfer, on the part of all subsequent transferors and transferees. The department shall provide a copy of the notification of assignment to the commissioner upon request.

      (e) Any state-certified digital animation production company that submits information to the department that it knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such company's credit entered on the digital animation tax credit certificate issued under this section.

      (f) No tax credits transferred pursuant to this section shall be subject to a post-certification remedy, and the department and the commissioner shall have no right, except in the case of possible material misrepresentation or fraud, to conduct any further or additional review, examination or audit of the expenditures or costs for which such tax credits were issued. The sole and exclusive remedy of the department and the commissioner shall be to seek collection of the amount of such tax credits from the entity that committed the fraud or misrepresentation.

      (g) The aggregate amount of all tax credits which may be reserved by the department pursuant to this section shall not exceed fifteen million dollars in any one fiscal year.

      (h) The department, in consultation with the commissioner, shall adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.

      (P.A. 07-236, S. 3; June Sp. Sess. P.A. 07-4, S. 71; June Sp. Sess. P.A. 07-5, S. 15; June Sp. Sess. P.A. 09-3, S. 99; Sept. Sp. Sess. P.A. 09-8, S. 4, 5.)

      History: P.A. 07-236 effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; June Sp. Sess. P.A. 07-4 amended Subsec. (c) by inserting "and independent certification", effective July 1, 2007; June Sp. Sess. P.A. 07-5 amended Subsec. (f) to substitute "commission" for "commissioner" re issuance of tax credit voucher and make technical changes, effective October 6, 2007; June Sp. Sess. P.A. 09-3 made changes throughout to transfer responsibility for program from Commission on Culture and Tourism to Department of Economic and Community Development, amended Subsec. (a) by removing compensation in excess of $200,000,000 and costs of independent certification from definition of "production expenses or costs" in Subdiv. (8)(D), amended Subsec. (b)(1) by designating existing provisions re income years on or after January 1, 2007, as Subpara. (A), amending same to make applicable prior to January 1, 2010, and adding Subpara. (B) re allowable credit depending on amount spent, amended Subsec. (c) by designating existing provisions as Subdiv. (1), amending same to add provision re independent certification provided by audit professional chosen from list and adding Subdiv. (2) re administrative fee, amended Subsec. (e) by deleting "wilfully" re submission of information, and amended Subsec. (f) by replacing former provisions with provisions re post-certification remedy, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010; Sept. Sp. Sess. P.A. 09-8 amended Subsec. (b) by replacing "not less than five hundred thousand one dollars" with "more than five hundred thousand dollars" in Subdiv. (1)(B), and by inserting "All or part of any" re credit and replacing "and may be carried forward for" with "or in" in Subdiv. (3), effective October 5, 2009.

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      Sec. 12-217mm. Tax credit for green buildings. Regulations. (a) As used in this section:

      (1) "Allowable costs" means the amounts chargeable to a capital account, including, but not limited to: (A) Construction or rehabilitation costs; (B) commissioning costs; (C) architectural and engineering fees allocable to construction or rehabilitation, including energy modeling; (D) site costs, such as temporary electric wiring, scaffolding, demolition costs and fencing and security facilities; and (E) costs of carpeting, partitions, walls and wall coverings, ceilings, lighting, plumbing, electrical wiring, mechanical, heating, cooling and ventilation but "allowable costs" does not include the purchase of land, any remediation costs or the cost of telephone systems or computers;

      (2) "Brownfield" has the same meaning as in subsection (g) of section 32-9cc;

      (3) "Eligible project" means a real estate development project that is designed to meet or exceed the applicable LEED Green Building Rating System gold certification or other certification determined by the Commissioner of Environmental Protection to be equivalent, but if a single project has more than one building, "eligible project" means only the building or buildings within such project that is designed to meet or exceed the applicable LEED Green Building Rating System gold certification or other certification determined by the Commissioner of Environmental Protection to be equivalent;

      (4) "Energy Star" means the voluntary labeling program administered by the United States Environmental Protection Agency designed to identify and promote energy-efficient products, equipment and buildings;

      (5) "Enterprise zone" means an area in a municipality designated by the Commissioner of Economic and Community Development as an enterprise zone in accordance with the provisions of section 32-70;

      (6) "LEED Accredited Professional Program" means the professional accreditation program for architects, engineers and other building professionals as administered by the United States Green Building Council;

      (7) "LEED Green Building Rating System" means the Leadership in Energy and Environmental Design green building rating system developed by the United States Green Building Council as of the date that the project is registered with the United States Green Building Council;

      (8) "Mixed-use development" means a development consisting of one or more buildings that includes residential use and in which no more than seventy-five per cent of the interior square footage has at least one of the following uses: (A) Commercial use; (B) office use; (C) retail use; or (D) any other nonresidential use that the Secretary of the Office of Policy and Management determines does not pose a public health threat or nuisance to nearby residential areas;

      (9) "Secretary" means the Secretary of the Office of Policy and Management; and

      (10) "Site improvements" means any construction work on, or improvement to, streets, roads, parking facilities, sidewalks, drainage structures and utilities.

      (b) For income years commencing on and after January 1, 2012, there may be allowed a credit for all taxpayers against any tax due under the provisions of this chapter for the construction or renovation of an eligible project that meets the requirements of subsection (c) of this section, and, in the case of a newly constructed building, for which a certificate of occupancy has been issued not earlier than January 1, 2010.

      (c) (1) To be eligible for a tax credit under this section a project shall: (A) Not have energy use that exceeds (i) seventy per cent of the energy use permitted by the state building code for new construction, or (ii) eighty per cent of the energy use permitted by the state energy code for renovation or rehabilitation of a building; and (B) use equipment and appliances that meet Energy Star standards, if applicable, including, but not limited to, refrigerators, dishwashers and washing machines.

      (2) The credit shall be equivalent to a base credit as follows: (A) For new construction or major renovation of a building but not other site improvements certified by the LEED Green Building Rating System or other system determined by the Commissioner of Environmental Protection to be equivalent, (i) eight per cent of allowable costs for a gold rating or other rating determined by the Commissioner of Environmental Protection to be equivalent, and (ii) ten and one-half per cent of allowable costs for a platinum rating or other rating determined by the Commissioner of Environmental Protection to be equivalent; and (B) for core and shell or commercial interior projects, (i) five per cent of allowable costs for a gold rating or other rating determined by the Commissioner of Environmental Protection to be equivalent, and (ii) seven per cent of allowable costs for a platinum rating or other rating determined by the Commissioner of Environmental Protection to be equivalent. There shall be added to the base credit one-half of one per cent of allowable costs for a development project that is (I) a mixed-use development, (II) located in a brownfield or enterprise zone, (III) does not require a sewer extension of more than one-eighth of a mile, or (IV) located within one-quarter of a mile walking distance of publicly available bus transit service or within one-half of a mile walking distance of adequate rail, light rail, streetcar or ferry transit service, provided, if a single project has more than one building, at least one building shall be located within either such distance. Allowable costs shall not exceed two hundred fifty dollars per square foot for new construction or one hundred fifty dollars per square foot for renovation or rehabilitation of a building.

      (d) (1) The Secretary of the Office of Policy and Management may issue an initial credit voucher upon determination that the applicant is likely, within a reasonable time, to place in service property qualifying for a credit under this section. Such voucher shall state: (A) The first income year for which the credit may be claimed, (B) the maximum amount of credit allowable, and (C) the expiration date by which such property shall be placed in service. The expiration date may be extended at the discretion of the secretary. Such voucher shall reserve the credit allowable for the applicant named in the application until the expiration date. If the expiration date is extended, the reservation of the tax credit may also be extended at the discretion of the secretary.

      (2) The aggregate amount of all tax credits in initial credit vouchers issued by the secretary shall not exceed twenty-five million dollars.

      (3) For each income year for which a taxpayer claims a credit under this section, the taxpayer shall obtain an eligibility certificate from an architect or professional engineer licensed to practice in this state and accredited through the LEED Accredited Professional Program or other program determined by the Commissioner of Environmental Protection to be equivalent. Such certificate shall consist of a certification, under the seal of such architect or engineer, that the building, base building or tenant space with respect to which the credit is claimed, meets or exceeds the applicable LEED Green Building Rating System gold certification, or other certification determined by the Commissioner of Environmental Protection to be equivalent in effect at the time such certification is made. Such certification shall set forth the specific findings upon which the certification is based and shall state that the architect or engineer is accredited through the LEED Accredited Professional Program or other program determined by the Commissioner of Environmental Protection to be equivalent.

      (4) To obtain the credit, the taxpayer shall file the initial credit voucher described in subdivision (1) of this subsection, the eligibility certificate described in subdivision (3) of this subsection and an application to claim the credit with the Commissioner of Revenue Services. The commissioner shall approve the claim upon determination that the taxpayer has submitted the voucher and certification required under this subdivision. The applicant shall send a copy of all such documents to the secretary.

      (e) (1) A taxpayer may claim not more than a total of twenty-five per cent of allowable costs in any income year, and any percentage of tax credit that the taxpayer would otherwise be entitled to in accordance with subsection (c) of this section may be carried forward for a period of not more than five years.

      (2) Tax credits are fully assignable and transferable. A project owner, including, but not limited to, a nonprofit or institutional project organization, may transfer a tax credit to a pass-through partner in return for a lump sum cash payment.

      (f) Notwithstanding any provision of the general statutes, any subsequent successor in interest to the property that is eligible for a credit in accordance with subsection (c) of this section may claim such credit if the deed transferring the property assigns the subsequent successor such right, unless the deed specifies that the seller shall retain the right to claim such credit. Any subsequent tenant of a building for which a credit was granted to a taxpayer pursuant to this section may claim the credit for the period after the termination of the previous tenancy that such credit would have been allowable to the previous tenant.

      (g) The Secretary of the Office of Policy and Management shall establish a uniform application fee, in an amount not to exceed ten thousand dollars, which shall cover all direct costs of administering the tax credit program established pursuant to this section. Said secretary may hire a private consultant or outside firm to administer and review applications for said program.

      (h) On or before July 1, 2013, the secretary, in consultation with the Commissioner of Revenue Services, shall prepare and submit to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and finance, revenue and bonding, a written report containing (1) the number of taxpayers applying for the credits provided in this section; (2) the amount of such credits granted; (3) the geographical distribution of such credits granted; and (4) any other information the secretary deems appropriate. A preliminary draft of the report shall be submitted on or before July 1, 2012, to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and finance, revenue and bonding. Such reports shall be submitted in accordance with the provisions of section 11-4a.

      (i) Not later than January 1, 2011, the secretary, in consultation with the Commissioner of Revenue Services, shall adopt regulations, in accordance with the provisions of chapter 54, as necessary to implement the provisions of this section.

      (Sept. Sp. Sess. P.A. 09-8, S. 7.)

      History: Sept. Sp. Sess. P.A. 09-8 effective October 5, 2009.

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      Sec. 12-219. Additional tax in the amount by which alternative computations exceed tax under section 12-214. Minimum tax. Surcharge. (a)(1) Each company subject to the provisions of this part shall pay for the privilege of carrying on or doing business within the state, the larger of the tax, if any, imposed by section 12-214 and the tax calculated under this subsection. The tax calculated under this section shall be a tax of three and one-tenth mills per dollar for each income year of the amount derived (A) by adding (i) the average value of the issued and outstanding capital stock, including treasury stock at par or face value, fractional shares, scrip certificates convertible into shares of stock and amounts received on subscriptions to capital stock, computed on the balances at the beginning and end of the taxable year or period, the average value of surplus and undivided profit computed on the balances at the beginning and end of the taxable year or period, and (ii) the average value of all surplus reserves computed on the balances at the beginning and end of the taxable year or period, (B) by subtracting from the sum so calculated (i) the average value of any deficit carried on the balance sheet computed on the balances at the beginning and end of the taxable year or period, and (ii) the average value of any holdings of stock of private corporations including treasury stock shown on the balance sheet computed on the balances at the beginning and end of the taxable year or period, and (C) by apportioning the remainder so derived between this and other states under the provisions of section 12-219a, provided in no event shall the tax so calculated exceed one million dollars or be less than two hundred fifty dollars.

      (2) For purposes of this subsection, in the case of a new domestic company, the balances at the beginning of its first fiscal year or period shall be the balances immediately after its organization or immediately after it commences business operations, whichever is earlier; and in the case of a foreign company, the balances at the beginning of its first fiscal year or period in which it becomes liable for the filing of a return in this state shall be the balances as established at the beginning of the fiscal year or period for tax purposes. In the case of a domestic company dissolving or limiting its existence, the balances at the end of the fiscal year or period shall be the balances immediately prior to the final distribution of all its assets; and in the case of a foreign company filing a certificate of withdrawal, the balances at the end of the fiscal year or period shall be the balances immediately prior to the withdrawal of all of its assets. When a taxpayer has carried on or had the right to carry on business within the state for eleven months or less of the income year, the tax calculated under this subsection shall be reduced in proportion to the fractional part of the year during which business was carried on by such taxpayer. The tax calculated under this subsection shall, in no case, be less than two hundred fifty dollars for each income year. The taxpayer shall report the items set forth in this subsection at the amounts at which such items appear upon its books; provided, when, in the opinion of the Commissioner of Revenue Services, the books of the taxpayer do not disclose a reasonable valuation of such items, the commissioner may require any additional information which may be necessary for a reasonable determination of the tax calculated under this subsection and shall, on the basis of the best information available, calculate such tax and notify the taxpayer thereof.

      (3) No tax credit allowed against the tax imposed by this chapter shall reduce a company's tax calculated under this subsection to an amount less than two hundred fifty dollars.

      (b) (1) With respect to income years commencing on or after January 1, 1989, and prior to January 1, 1992, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to twenty per cent of the additional tax so calculated for such income year, without reduction of the additional tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (2) With respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to ten per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (3) With respect to income years commencing on or after January 1, 2003, and prior to January 1, 2004, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, be increased by adding thereto an amount equal to twenty per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (4) With respect to income years commencing on or after January 1, 2004, and prior to January 1, 2005, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, be increased by adding thereto an amount equal to twenty-five per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax, except that any company that pays the minimum tax of two hundred fifty dollars under this section or section 12-223c for such income year shall not be subject to such additional tax. The increased amount of tax payable by any company under this subdivision, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (5) With respect to income years commencing on or after January 1, 2006, and prior to January 1, 2007, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to twenty per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (6) (A) With respect to income years commencing on or after January 1, 2009, and prior to January 1, 2012, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to ten per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

      (B) Any company whose gross income for the income year was less than one hundred million dollars shall not be subject to the additional tax imposed under subparagraph (A) of this subdivision. This exception shall not apply to companies filing a combined return for the income year under section 12-223a or a unitary return under subsection (d) of section 12-218d.

      (c) The tax imposed by this section shall be assessed and collected and be first applicable at the time or times herein provided for the tax measured by net income. This section shall not apply to insurance companies, real estate investment trusts, regulated investment companies, interlocal risk management agencies formed pursuant to chapter 113a or, except as otherwise provided by subsection (d) of this section, financial service companies, as defined in section 12-218b.

      (d) Each financial service company, as defined in section 12-218b, shall pay for the privilege of carrying on or doing business within the state, the larger of the tax, if any, imposed by section 12-214 and the tax calculated under this subsection. For each such financial service company, the tax calculated under this subsection shall be two hundred fifty dollars for each income year. No tax credit allowed against the tax imposed by this chapter shall reduce a financial service company's tax calculated under this subsection to an amount less than two hundred fifty dollars.

      (1949 Rev., S. 1900; 1951, 1953, June, 1955, S. 1096d; 1957, P.A. 560, S. 2; 649, S. 2; 1959, P.A. 394, S. 2; 1961, P.A. 428, S. 3; 604, S. 3; 1963, P.A. 141; February, 1965, P.A. 461, S. 8; June, 1969, P.A. 1, S. 15; 1971, P.A. 683, S. 2; June, 1971, P.A. 5, S. 112; 1972, P.A. 126, S. 1; 285, S. 7; P.A. 73-350, S. 11, 27; P.A. 75-213, S. 2, 53; P.A. 77-614, S. 139, 610; P.A. 78-121, S. 106, 113; P.A. 80-483, S. 56, 186; P.A. 81-66, S. 2, 5; 81-255, S. 22, 37; 81-411, S. 8, 42; Nov. Sp. Sess. P.A. 81-4, S. 30, 32; P.A. 82-325, S. 3, 7; P.A. 84-546, S. 32, 33, 173; P.A. 85-159, S. 2, 19; 85-469, S. 4, 6; P.A. 86-124, S. 1, 2; 86-132; 86-403, S. 131, 132; P.A. 89-16, S. 2, 31; 89-251, S. 21, 203; P.A. 90-174, S. 1, 3; June Sp. Sess. P.A. 91-3, S. 101, 168; P.A. 93-74, S. 8, 59, 67; May Sp. Sess. P.A. 94-4, S. 7, 85; P.A. 95-160, S. 64, 69; P.A. 96-197, S. 6, 11; P.A. 98-110, S. 19, 27; May 9 Sp. Sess. P.A. 02-1, S. 57; P.A. 03-2, S. 34; June 30 Sp. Sess. P.A. 03-1, S. 88; P.A. 05-251, S. 63; P.A. 06-186, S. 67; June Sp. Sess. P.A. 09-3, S. 102.)

      History: 1959 act applied tax to each income year, added reference to deferred and unrealized profits in Subdiv. (B)(a)(3) and to treasury stock in Subdiv. (B)(b)(2); 1961 acts raised alternative tax rate from 1.9 mills to 2.5 mills, added exception to minimum tax for banking and financial corporations, and changed technical language; 1963 act added exception for small business investment companies; 1965 act set deadline for 2.5 mill rate to years beginning before January 1, 1966, and raised mill rate to two and five-eighths thereafter, set same deadline for $25 minimum tax, raised to $30 thereafter and set same deadline for 2% tax re banking institutions, raised to 2.1% thereafter; 1969 act for two years, January 1, 1969, to January 1, 1971, changed rates above to four mills, $45 and 3.2% respectively; 1971 acts divided section into subsecs. and made basis for payments, the difference between tax imposed in Sec. 12-214 and tax calculated under Subdivs. (A) and (B) and changed ending dates for temporary increases in rates from 1971 to 1973; 1972 acts included maximum tax for income years beginning on or after January 1, 1972, for "any company, except companies subject to the gross earnings taxes under chapters 211 and 212, which, in arriving at net income ... is entitled to a deduction under section 12-217 for dividends as defined in the federal corporation income tax law" and made temporary increased tax rates the permanent rates; P.A. 73-350 made provisions applicable to years beginning on or after January 1, 1973, increased mill rate from 4 to 4.25 mills and specifically excluded regulated investment companies and real estate investment trusts, deleted par or face value of indebtedness and deferred and unrealized profits from calculation of taxable amount and set maximum and minimum charges of $100,000 and $50, respectively, and changed provisions formerly applicable to companies, "except companies subject to the gross earnings taxes under chapters 211 and 212" applicable to regulated investment companies or real estate investment trusts, set forth process for deriving amount subject to tax and established $50 minimum tax for such companies, increased figures in Subsec. (2)(B) from $45 to $50, changed rate for computation of interest and dividends from 2% to one-eighth of 1% and excluded insurance companies from provisions of section; P.A. 75-213 changed mill rate for companies other than regulated investment companies and real estate investment trusts from 0.25 mill to 0.31 mill and for regulated investment companies and real estate investment trusts from 0.4 to 0.5 mill, effective July 1, 1975, and applicable to income years commencing on or after January 1, 1975; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-121 deleted reference to private banks in Subsec. (1)(A); P.A. 80-483 deleted reference to building and loan associations in Subsec. (1)(A) and (2)(B); P.A. 81-66 raised mill rate in (1)(A) from 0.31 mill to 3.1 mills per dollar and increased minimum tax from $50 to $100, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-255 added the alternative computation of tax under Subdiv. (B) and increased the minimum tax to $250, effective July 1, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-411 added consideration of a loss for the income year in the alternative tax base under Subdiv. (B), and deleted provisions allowing deductions for contributions to retirement plan in determining salaries and other compensation, effective June 18, 1981, and applicable to income years commencing on or after January 1, 1981; Nov. Sp. Sess. P.A. 81-4 deleted Subsec. (1)(B) re alternative tax (if higher than that in Subdiv. (a)) consisting of 50% of corporation's net income or loss plus salaries and other compensation paid to elected or appointed corporation officers or to shareholders owning more than 1% of stock at rate of 5%, amending section accordingly, effective January 27, 1982, and applicable to income years commencing on or after January 1, 1983; P.A. 82-325 changed effective date of Nov. Sp. Sess. P.A. 81-4, but without affecting this section; P.A. 84-546 made technical change, substituting "scrip" for "script" in Subsec. (1); P.A. 85-159 reduced minimum tax to $100 for income years of corporations commencing on or after January 1, 1985; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 86-124 revised section to conform to the style of the general statutes and amended Subsec. (a)(1)(C) to increase the maximum tax from $100,000 to $500,000, effective May 8, 1986, and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 86-132 deleted provision limiting the types of regulated investment companies or real estate investment trusts to which the provisions concerning those types of companies and trusts applied; P.A. 86-403 changed effective date of P.A. 86-132 from October 1, 1986, to May 23, 1986 and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 89-16 increased the minimum tax from $100 to $250 in Subsecs. (a) and (b), and amended Subsec. (c) to impose an additional tax as a percentage of the tax calculated under Subsec. (a) or Subsec. (b), effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A. 89-251 increased the tax imposed under Subsec. (c), as amended by P.A. 89-16, as a percentage of the additional tax calculated under Subsec. (a) or Subsec. (b) from 15% to 20% of the additional tax, effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-174 amended Subsec. (a)(2) to provide for a maximum tax under said subdivision of $50,000, effective July 1, 1990, and applicable to income years of corporations commencing on or after January 1, 1991; June Sp. Sess. P.A. 91-3 amended Subsec. (a)(1)(C) to increase the maximum tax from $500,000 to $1,000,000 and Subsec. (c) to provide that the 20% additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a 10% additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 deleted Subsec. (a)(2) with respect to regulated investment company or real estate investment trusts, renumbering Subdiv. (3) accordingly and amended Subsec. (d) to exclude real estate investment trusts and regulated investment trusts from provisions of section, effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; May Sp. Sess. P.A. 94-4 in Subsec. (d) exempted interlocal risk management agencies formed pursuant to chapter 113a, effective June 9, 1994, and applicable to income years commencing on or after January 1, 1980; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-197 amended Subsecs. (a) and (b) to clarify that out-of-state businesses carrying on or doing business in the state are subject to the tax on the capital base and made technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 deleted Subsec. (b) re certain banks, trusts, investment and financing entities, relettered existing Subsecs., excluded financial service companies and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; May 9 Sp. Sess. P.A. 02-1 added Subsec. (a)(3) re the effect of tax credits on the minimum tax, amended Subsec. (c) by adding "except as otherwise provided by subsection (d) of this section" and added Subsec. (d) re a minimum tax for financial services companies, effective July 1, 2002, and applicable to income years commencing on or after January 1, 2002; P.A. 03-2 added Subsec. (b)(3) re a 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; P.A. 05-251 amended Subsec. (b) by deleting references to Sec. 91 of June 30 Sp. Sess. 03-1 in Subdivs. (3) and (4) and by adding Subdivs. (5) and (7) re surcharge in income years 2006 and 2007, respectively, effective June 30, 2005, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 amended Subsec. (b) to eliminate former Subdiv. (6) re surcharge in income year commencing on or after January 1, 2007, and prior to January 1, 2008, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; June Sp. Sess. P.A. 09-3 amended Subsec. (b) by adding Subdiv. (6) re surcharge of 10% for income years on or after January 1, 2009, and exemption for companies with gross income less than $100,000,000, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009.

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      Sec. 12-223f. Preference tax due from corporations filing a combined return. Notwithstanding the provisions of sections 12-223a to 12-223e, inclusive, the tax due in relation to any corporations which have filed a combined return for any income year with other corporations for the tax imposed under this chapter in accordance with section 12-223a shall be determined as follows: (1) The tax which would be due from each such corporation if it were filing separately under this chapter shall be determined, and the total for all corporations included in the combined return shall be added together; (2) the tax which would be jointly due from all corporations included in the combined return in accordance with the provisions of said sections 12-223a to 12-223e, inclusive, shall be determined; and (3) the total determined pursuant to subdivision (2) of this section shall be subtracted from the amount determined pursuant to subdivision (1) of this section. The resulting amount, in an amount not to exceed five hundred thousand dollars, shall be added to the amount determined to be due pursuant to said sections 12-223a to 12-223e, inclusive, and shall be due and payable as a part of the tax imposed pursuant to this chapter.

      (P.A. 89-251, S. 23, 203; June 30 Sp. Sess. P.A. 03-6, S. 80; June Sp. Sess. P.A. 09-3, S. 103; Sept. Sp. Sess. P.A. 09-8, S. 39.)

      History: P.A. 89-251, Sec. 23 effective July 1, 1989, and applicable to income years commencing on or after January 1, 1990; June 30 Sp. Sess. P.A. 03-6 increased the potential supplementary tax determined under this section from $25,000 to $250,000, effective August 20, 2003, and applicable to income years commencing on or after January 1, 2003; June Sp. Sess. P.A. 09-3 increased maximum tax from $250,000 to $500,000, effective September 9, 2009; Sept. Sp. Sess. P.A. 09-8 changed effective date provisions of June Sp. Sess. P.A. 09-3, S. 103, from September 9, 2009, to September 9, 2009, and applicable to income years commencing on or after January 1, 2009, effective October 5, 2009.

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