CHAPTER 224
DIVIDENDS, INTEREST INCOME AND CAPITAL GAINS TAX

      *Cited. 170 C. 567. Cited. 185 C. 186. Cited. 199 C. 133.

      Cited. 31 CS 134.


Table of Contents

Sec. 12-505. Definitions.
Sec. 12-506. Imposition of tax on dividends, interest income and capital gains.
Sec. 12-506a. Exchange of property.
Sec. 12-506b. Estates of deceased persons.
Sec. 12-506c. Exemptions.
Sec. 12-506d. Credit for tax paid in another state on gain from sale of certain property.
Sec. 12-506e. Effective dates of sections 12-505 to 12-508, inclusive.
Sec. 12-506f. Exemption of capital gain from sale of residence by persons sixty-five years of age or over.
Sec. 12-506g. Exemption for gains subject to tax as income of a Subchapter S corporation.
Sec. 12-506h. Deduction allowed in determining tax on interest income when taxpayer is shareholder in an electing small business corporation subject to tax on such interest.
Sec. 12-507. Duties of fiduciary.
Sec. 12-508. Tax return.
Sec. 12-508a. Extension of time for tax return and payment to April 16, 1974.
Sec. 12-509. Penalty for failure to pay tax when due. Rate of interest applied. Waiver of penalty.
Sec. 12-510. Powers and duties of commissioner.
Sec. 12-511. Deficiency assessments.
Sec. 12-511a. Disclosure by taxpayer of relevant changes in federal taxable income.
Sec. 12-512. Collection of tax, penalties and interest.
Sec. 12-513. Abatement of tax.
Sec. 12-514. Excess payments.
Sec. 12-515. Refund claims.
Sec. 12-516. Forms.
Sec. 12-517. Extension of time for filing return and paying tax.
Sec. 12-517a. Declarations of estimated tax and payment related to dividends, interest income and capital gains.
Sec. 12-517b. Installment payment on account of estimated tax. Amount and when payable.
Sec. 12-517c. Interest added when estimated payment on dividends, interest income or capital gains is less than minimum required.
Sec. 12-518. Enforcement. Regulations.
Sec. 12-519. Penalties for wilful failure to comply with requirements of this chapter.
Sec. 12-520. Report by Commissioner of Revenue Services. Confidential information.
Sec. 12-521. Appeal to commissioner.
Sec. 12-522. Appeal from commissioner.
Sec. 12-522a. Applicability of chapter provisions limited.

      Sec. 12-505. Definitions. (a) When used in this chapter, unless the context otherwise requires: (1) "Taxpayer" means (A) a husband and wife both of whom are residents in this state, whether or not they file for the taxable year a single federal income tax return jointly, and (B) each and every other individual who is a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of capital assets, or from dividends or interest income subject to tax under this chapter and any husband and wife when either of such husband or wife, or both, are not residents in this state and who file for the taxable year a single federal income tax return jointly, and each and every other individual who is not a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset; (2) "taxable year" means the same accounting period as the taxpayer's taxable year for federal income tax purposes or that portion of such year as either commences when the taxpayer becomes a resident or ends when the taxpayer ceases to be a resident of this state; (3) "dividends" means those dividends taxable for federal income tax purposes without regard to the dividend exclusion, but exclusive of exempt dividends; (4) "interest income" means (A) any interest income taxable for federal income tax purposes, exclusive of any such income with respect to which taxation by any state is prohibited by federal law, less any amounts forfeited to a bank, savings bank, savings and loan association, credit union or other depository institution, wherever located, as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit, or similar class of deposit, and (B) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state of Connecticut; (5) "Commissioner of Revenue Services" or "commissioner" means the Commissioner of Revenue Services; (6) "gains from the sale or exchange of capital assets" means (A) net gain as determined for federal income tax purposes, after due allowance for losses and holding periods, and with respect to any such gain which is earned, received in fact or constructively, accrued or credited to the taxpayer on or after January 1, 1987, but not later than February 8, 1989, deduction of sixty per cent of the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such taxable year, from (i) sales or exchanges of capital assets or assets treated as capital assets, other than notes, bonds or other obligations of the state of Connecticut or any of the political subdivisions thereof, or its or their respective agencies or instrumentalities, or (ii) from transactions or events taxable to the taxpayer as such sales or exchanges, and being the net amount includable in the taxpayer's adjusted gross income, with respect to all such sales, exchanges, transactions, or events, under the provisions of the internal revenue code in effect for the taxable year, exclusive of any gain or loss from the holding or trading of any dealer equity options, as defined in Section 1256 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and exclusive of any gain or loss of a nonresident taxpayer other than from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset and (B) net gains from sales or exchanges of certain property, as determined in accordance with Internal Revenue Service Form 4797, exclusive of any such net gain includable under subparagraph (A) in this definition of gains from the sale or exchange of capital assets; (7) "resident" means an individual: (A) Who is domiciled in this state; provided, if the individual maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this state, he shall be deemed not a resident; or (B) who is not domiciled in this state but maintains a permanent place of abode in this state and is in this state for an aggregate of more than one hundred eighty-three days of the taxable year, unless he, not being domiciled in this state, is in the armed forces of the United States; (8) "person" means the taxpayer or any pledgee, assignee, receiver, referee, trustee, conservator, guardian, custodian or other fiduciary of the taxpayer acting for the taxpayer; (9) "adjusted gross income" means adjusted gross income for the taxable year of any taxpayer as determined for purposes of the federal income tax, but exclusive of any social security or tier 1 railroad retirement benefits included in the taxpayer's total adjusted gross income for such taxable year; (10) "exempt dividends" means any dividend or part thereof, other than a capital gain dividend, paid by a regulated investment company and designated by it as an exempt dividend, in accordance with subsection (d) of this section, in a written notice mailed to its shareholders not later than sixty days after the close of its taxable year.

      (b) Any husband and wife subject to tax under this chapter for any taxable year who are entitled to file a single return jointly for such taxable year for purposes of the federal income tax shall be required to file a single tax return jointly for the purposes of the tax imposed under this chapter, whether or not such husband and wife file a single federal or state income tax return jointly for such taxable year, if such husband and wife reside in the same permanent place of abode on the closing date of such taxable year.

      (c) Every real estate reporting person, as defined in subsection (e) of Section 6045 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and the regulations thereunder, who is involved in any real estate transaction relating to real property located in this state, shall, on or before the last day of February of the year following the calendar year for which the return under subsection (a) of said Section 6045 was required to be made, file with the Commissioner of Revenue Services a copy of such return and a copy of each statement furnished under subsection (b) of said Section 6045 with respect to real estate transactions relating to real property located in this state.

      (d) If, at the close of each quarter of its taxable year, at least fifty per cent of the value of the total assets of a regulated investment company consists of obligations with respect to which taxation by this state is prohibited by federal law, the company shall be qualified to pay exempt dividends to its shareholders. The value of the total assets of a regulated investment company shall be the value as defined in Section 851(c)(4) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. If the aggregate amount of dividends designated as exempt dividends with respect to a taxable year of any company is greater than an amount equal to the sum of the amount of interest income derived from obligations with respect to which taxation by this state is prohibited by federal law less the amount allowed as a deduction under Section 212 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, for the production or collection of such interest income, the portion of such distribution which shall constitute an exempt dividend shall be only that portion of the amount so designated as the amount of such excess for such taxable year bears to the amount so designated.

      (June, 1969, P.A. 1, S. 26; June, 1971, P.A. 8, S. 9; 1972, P.A. 271, S. 3; P.A. 73-356, S. 1, 10; P.A. 75-213, S. 42, 53; P.A. 76-435, S. 48, 82; P.A. 77-614, S. 139, 610; Nov. Sp. Sess. P.A. 81-4, S. 23, 32; P.A. 82-325, S. 3, 7; June Sp. Sess. P.A. 83-1, S. 10, 15; June Sp. Sess. P.A. 83-37, S. 2, 3; P.A. 85-159, S. 11, 19; 85-469, S. 3, 4, 6; P.A. 87-559, S. 1, 3; P.A. 89-251, S. 16, 203; 89-304, S. 1, 2; P.A. 90-148, S. 5, 34; June Sp. Sess. P.A. 91-3, S. 123, 168; May Sp. Sess. P.A. 92-5, S. 31, 37; P.A. 94-175, S. 4, 32; May Sp. Sess. P.A. 94-4, S. 80, 85; P.A. 95-160, S. 64, 69.)

      History: 1971 act defined "dividends", "resident" and "person", redefined "taxpayer" to include persons receiving gains from dividends and "taxable year" to be year or portion of year commencing after December 31, 1970, and greatly expanded definition of "gains from the sale or exchange of capital assets"; 1972 act excluded from consideration as dividends those distributed by a DISC; P.A. 73-356 included under "taxpayer" resident husband and wife filing joint federal income tax return and deleted reference to dividends under "taxpayer" definition, redefined "taxable year" in terms of residency, included "custodian" in definition of person, redefined "gains from the sale or exchange of capital assets" and deleted definition of "dividends", effective May 4, 1973, and applicable to taxable years beginning on or after January 1, 1973; P.A. 75-213 restored definition of "dividends" and included reference to dividends under "taxpayer", defined "adjusted gross income", excluded notes, bonds or other obligations of the state or political subdivisions or agents or instrumentalities from consideration as capital assets and made technical changes, effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975; P.A. 76-435 made technical changes; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; Nov. Sp. Sess. P.A. 81-4 added Subdiv. (B) in definition of "gains from the sale or exchange of capital assets", effective January 27, 1982, and applicable to taxable years of taxpayers commencing on or after January 1, 1981; P.A. 82-325 revised effective date of Nov. Sp. Sess. act but without affecting this section; June Sp. Sess. P.A. 83-1 added definition of interest income subject to tax under chapter 224, effective July 1, 1983 and applicable to taxable years of taxpayers commencing on or after January 1, 1983; June Sp. Sess. P.A. 83-37 amended definition of "interest income" relating to "any interest income from obligations of any state or political subdivision thereof, exclusive of such income from obligations of the state of Connecticut or any political subdivision thereof" to include any interest income from obligations "issued by or on behalf" of any state, political subdivision thereof, "or public instrumentality, state or local authority, district, or similar public entity" and to exclude such income from obligations "issued by or on behalf" of the state of Connecticut, any political subdivision thereof, "or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state of Connecticut"; P.A. 85-159 amended definition of "adjusted gross income" to exclude social security and tier I railroad retirement benefits, effective May 16, 1985, and applicable to taxable years commencing on or after July 1, 1985; P.A. 85-469 provided for deduction from interest income for penalties of premature withdrawal of funds and revised effective date of P.A. 85-159 making this section applicable to taxable years commencing on or after January 1, 1985; P.A. 87-559 amended the definition of "gains from the sale or exchange of capital assets" to provide that determination of such gains, for purposes of the Connecticut tax, shall allow a deduction of 60% of the excess of net long-term capital gain for the taxable year over net short-term capital loss for such year and to specify that net gains from sales or exchanges of certain property is determined in accordance with Internal Revenue Service Form 4797, effective July 6, 1987, and applicable to taxable years of taxpayers commencing on or after January 1, 1987; P.A. 89-251 amended the definition of gains from the sale or exchange of capital assets so that the deduction of 60% of the excess of net long-term capital gain over the net short-term capital loss for the taxable year is not applicable in the determination of such gains after February 8, 1989, and added Subsec. (b) providing that husband and wife filing a single return jointly under federal income tax shall be required to file a single return jointly under the Connecticut tax on dividends, interest income and capital gains, effective July 1, 1989, and applicable to taxable years commencing on or after January 1, 1989; P.A. 89-304 amended the definition of gains from the sale or exchange of capital assets so that gains subject to tax in Connecticut shall not include any gains from holding or trading dealer equity options, as such options are defined in the Internal Revenue Code, effective June 27, 1989, and applicable to taxable years commencing on or after January 1, 1989; P.A. 90-148 amended definition of gains from the sale of capital assets subject to tax in Connecticut to include any gain from the sale of real property in Connecticut even though the seller is not a resident and added Subsec. (c) providing that anyone required to file a return under the Internal Revenue Code with respect to a real estate transaction in this state shall file a copy of the return with the commissioner of revenue services even though not a resident of Connecticut, effective May 18, 1990, and applicable to taxable years commencing on or after January 1, 1990; June Sp. Sess. P.A. 91-3 amended Subsec. (a) to exclude exempt dividends, as defined therein, from the definition of dividend, amended Subsec. (b) to require most husbands and wives to file joint returns, and added Subsec. (d), re payment of exempt dividends by a regulated investment company, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 amended Subsec. (d) to make a technical change; P.A. 94-175 divided Subsec. (a) into Subdivs. and Subparas., replacing designators as necessary, effective June 2, 1994; May Sp. Sess. P.A. 94-4 revised effective date of P.A. 94-175 but without affecting this section; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.

      Net capital losses not usable against dividends. 163 C. 478. Gain realized, when. Id., 520. Persons maintaining permanent place of abode in Connecticut are taxpayers within meaning of this section. 170 C. 567. Cited. 173 C. 506. Because this statute specifically incorporates the federal scheme of dividend taxation, proceeds of a money market fund, except for capital gains distribution, are treated as dividend, not as interest, income. 185 C. 186. "Dividends taxable for federal income tax purposes" construed and discussed. 188 C. 206. Cited. 199 C. 133. Allows application of federal tax principles regardless of length of taxable year in Connecticut. 213 C. 19. Cited. 234 C. 614.

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      Sec. 12-506. Imposition of tax on dividends, interest income and capital gains. (a) A tax is hereby imposed on (1) all dividends and interest income earned, received in fact or constructively, accrued or credited to the taxpayer during his taxable year except that no such tax shall be imposed unless the taxpayer's adjusted gross income in such year equals or exceeds fifty-four thousand dollars, in accordance with the following schedule:

Adjusted Gross Income
In Taxable Year
Rate of Tax
On All Dividends
And Interest Income
At least $54,000
    but less than $56,000
    .75%
At least $56,000
    but less than $58,000
  1.5%
At least $58,000
    but less than $60,000
     2%
At least $60,000
    but less than $62,000
2.75%
At least $62,000
    but less than $66,000
  3.5%
At least $66,000
    but less than $70,000
     4%
At least $70,000
    but less than $74,000
4.75%
At least $74,000
    but less than $78,000
  5.5%
At least $78,000
    but less than $82,000
     6%
At least $82,000
    but less than $86,000
6.75%
At least $86,000
    but less than $90,000
  7.5%
At least $90,000
    but less than $100,000
8.75%
$100,000 and over
9.75%

and (2) at the rate of four and three-fourths per cent on all gains from the sale or exchange of capital assets which have been earned, received in fact or constructively, accrued or credited to the taxpayer during his taxable year subject to the exemptions allowed in section 12-506c, and section 12-506f, when applicable, provided the amount of tax payable by any taxpayer under this subdivision (2) with respect to such gains for any taxable year may not exceed an amount equal to three and four-tenths per cent of the adjusted gross income of such taxpayer for such taxable year, as determined for purposes of the federal income tax.

      (b) Any taxpayer whose adjusted gross income in any taxable year is less than fifty-four thousand dollars and whose net gains from the sale or exchange of capital assets in such year do not exceed (1) two hundred dollars in the case of a husband and wife and (2) one hundred dollars in all other cases or any taxpayer whose total tax liability as determined under subsection (a) of this section in respect to any taxable year would be less than ten dollars and any taxpayer who is sixty-five years of age or older and whose adjusted gross income in any taxable year, less any gains from the sale or exchange of capital assets, is less than ten thousand dollars and any taxpayer whose adjusted gross income in any taxable year is below the level at which such taxpayer would be required to file an income tax return under the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall not be subject to the tax imposed by subsection (a) of this section, and shall not be required to file any return under the provisions of section 12-508, for such year. For purposes of this subsection, in the case of a husband and wife both of whom are residents of this state and who file for the taxable year a single federal income tax return jointly, they shall be considered a taxpayer who is sixty-five years of age or older if either of them is sixty-five years of age or older.

      (June, 1969, P.A. 1, S. 25, 27; June, 1971, P.A. 8, S. 10; 1972, P.A. 2, S. 1; P.A. 73-356, S. 2, 3, 5, 10; P.A. 74-63, S. 1, 5; P.A. 75-213, S. 43, 53; P.A. 77-370, S. 10, 13; P.A. 80-76, S. 1, 2; June Sp. Sess. P.A. 83-1, S. 11, 15; P.A. 85-159, S. 12, 19; 85-455, S. 1, 2; 85-469, S. 4, 6; P.A. 86-397, S. 4, 10; P.A. 87-559, S. 2, 3; P.A. 89-211, S. 26; 89-251, S. 17, 203; June Sp. Sess. P.A. 91-3, S. 124, 168.)

      History: 1971 act amended Subsec. (a) to include dividends in tax, to delete obsolete reference to inapplicability to gains on sale or exchange of capital assets after June 30, 1971, to add reference to exemptions and to specify applicability of tax after December 31, 1969, amended Subsec. (b) to delete provision for $100 or $200 exemption for single or joint taxpayers and added Subsecs. (c) to (e) re calculation of exemptions; 1972 act replaced Subsec. (b) re minimum tax of $5 with new provisions re exemption from tax when gains $100 or less, effective February 17, 1972, and applicable to taxable years or portions thereof commencing after December 31, 1970; P.A. 73-356 repealed Subsecs. (c) to (e), substituted "net gains" for "dividends and gains", substituted Sec. 12-506c for reference to repealed Subsec. (c) and deleted obsolete reference to December 31, 1970, in Subsec. (a) and amended Subsec. (b) to allow exemption for jointly filing husband and wife when gains do not exceed $200 and to substitute "net gains" for "gross income from gains ... and dividends"; P.A. 74-63 added reference to Sec. 12-506f in Subsec. (a), effective April 26, 1974, and applicable to taxable years beginning on and after January 1, 1974; P.A. 75-213 increased tax rate from 6% to 7% and included dividends in Subsec. (a) and amended Subsec. (b) to simplify language and to limit applicability to taxpayers whose adjusted gross income is less than $20,000, effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975; P.A. 77-370 added table for graduated tax rate for tax on dividends, removing them from straight 7% rate, effective July 1, 1977, and applicable to taxable years commencing on and after January 1, 1977; P.A. 80-76 exempted from tax those whose liability would be less than $10, effective July 1, 1980, and applicable to taxable years commencing on or after January 1, 1980; June Sp. Sess. P.A. 83-1 added interest income as a form of investment income subject to tax under Subsec. (a)(1), to be in addition to dividends already subject to tax under said subdivision, provided that tax shall not be imposed under said subdivision unless taxpayer's adjusted gross income for the taxable year is $50,000 or more in lieu of $20,000 as previously provided and imposed tax on interest income and dividends in accordance with a schedule of rates increasing from 6% to 13% in relation to the schedule of increasing levels of adjusted gross income in said subdivision, effective July 1, 1983, and applicable to taxable years of taxpayers commencing on or after January 1, 1983; P.A. 85-159 amended Subsec. (a) to revise tax rate schedule and Subsec. (b) to exempt taxpayers who are 65 or older and have less than $10,000 in income, exclusive of capital gains, effective May 16, 1985, and applicable to taxable years of taxpayers commencing on or after January 1, 1985; P.A. 85-455 amended Subsec. (b) by providing that any taxpayer whose adjusted gross income for any year is below the level at which such taxpayer would be required to file a return for purposes of the federal income tax shall not be subject to the tax imposed under this section, effective June 24, 1985, and applicable to tax years of taxpayers 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. 86-397 reduced the rate of tax imposed on dividends and interest income for each bracket of adjusted gross income in the schedule of tax by the amount of 1% of such dividends and interest income and accordingly, eliminated the tax with respect to adjusted gross income under $54,000 in a taxable year, effective June 11, 1986, and applicable to dividends and interest income for taxable years commencing on or after January 1, 1986; P.A. 87-559 amended Subsec. (a) by deleting the word "net" immediately preceding "gains from the sale or exchange of capital assets" in the imposition of tax statement in Subsec. (a)(2), for purposes of consistency with the definition of "gains from the sale or exchange of capital assets" in Sec. 12-505 which defines such gains as "net" gains, effective July 6, 1987, and applicable to taxable years of taxpayers commencing on or after January 1, 1987; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89-251 amended Subsec. (a) by adding new brackets in the schedule of adjusted gross income applicable in determining tax with increased rates of tax at most levels of such income and by adding the provision with respect to tax on capital gains limiting such tax to a maximum of 5% of adjusted gross income, effective July 1, 1989, and applicable to taxable years commencing on or after January 1, 1989; June Sp. Sess. P.A. 91-3 amended Subsec. (a) by adding new brackets with regard to the dividends and interest income tax to reduce the rate by approximately one-third and to reduce the capital gains tax from 7% to 4.75%, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991.

      Cost, basis for determining gain. 163 C. 520. "Fraction" means proper fractions only. 170 C. 567. Cited. 173 C. 506. Cited. 199 C. 133. Allows application of federal tax principles regardless of length of taxable year in Connecticut. 213 C. 19. Cited. 234 C. 614.

      Subsec. (a):

      Cited. 188 C. 206.


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      Sec. 12-506a. Exchange of property. (a) Repealed by P.A. 73-356, S. 5, 10.

      (b) A partnership as such shall not be subject to the tax imposed by this chapter. Persons who are partners shall be liable for said tax only in their individual capacities in the same manner that individuals are liable for partnership income under the federal Internal Revenue Code in effect for the taxable year.

      (c) Repealed by P.A. 73-356, S. 5, 10.

      (d) The tax imposed in this chapter shall not be applicable with respect to any sale or exchange of agricultural animals.

      (June, 1971, P.A. 8, S. 11; P.A. 73-356, S. 5, 10; 73-413; P.A. 80-374.)

      History: P.A. 73-356 repealed Subsecs. (a) and (c) re nonrecognizance of gains or losses with regard to exchanges in accordance with Secs. 1031, 1033, 1035 and 1036 of Title 26 of U.S. Internal Revenue Code and re reporting of funds by pledgee, guardian or other fiduciary to be taxed to beneficiary or equitable owners; P.A. 73-413 added Subsec. (d) exempting sale or exchange of agricultural animals from tax; P.A. 80-374 substituted "in effect for the taxable year" for obsolete reference to January 1, 1971, in Subsec. (b).

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      Sec. 12-506b. Estates of deceased persons. The estate of each deceased person who last dwelt in the state shall be subject to and liable for the tax imposed by this chapter upon all dividends and net gains from the sale or exchange of capital assets actually or constructively received by such person in the year of his death, upon which a tax is due and has not already been paid under this chapter.

      (June, 1971, P.A. 8, S. 21; P.A. 73-356, S. 6, 10; P.A. 75-213, S. 44, 53.)

      History: P.A. 73-356 substituted "net gains from the sale or exchange of capital assets" for "interest, dividends and capital gains, less capital losses" and made technical changes; P.A. 75-213 added references to liability and included dividends, effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975.

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      Sec. 12-506c. Exemptions. For each individual resident required to pay the tax imposed under the provisions of subsection (a) of section 12-506, there shall be allowed with respect to net gains from the sale or exchange of capital assets an exemption of one hundred dollars provided, if such individual resident has attained the age of sixty-five years on or before the last day of the taxable year there shall be allowed an additional exemption of one hundred dollars and, provided, further, if such individual resident is blind, there shall be allowed an additional exemption of one hundred dollars. On a single return filed for husband and wife jointly, the amount of the exemption taken on such return shall be the sum of the exemptions to which each is entitled under this section.

      (P.A. 73-356, S. 4, 10; P.A. 75-213, S. 45, 53.)

      History: P.A. 75-213 substituted "individual resident" for "person" and specified that exemptions under section apply "with respect to net gains from the sale or exchange of capital assets", effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975.

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      Sec. 12-506d. Credit for tax paid in another state on gain from sale of certain property. A credit against the tax imposed under subsection (a) of section 12-506 shall be allowed for a tax paid to another state with respect to any gain from the sale or exchange of real property located in that state which had not been held for investment, income-producing or any business purpose by a taxpayer subject to tax under this chapter, provided such real property was used as the principal place of residence by such taxpayer for not less than six months during the period of twelve months immediately preceding the date of such sale or exchange. The credit allowed herein shall not exceed the lesser of (1) the tax paid to the other state with respect to such a gain or (2) that proportion of the total tax due under this chapter which the amount of gain taxed in both this and another state and qualifying for this credit bears to the entire net gain of the taxpayer for the same taxable year for which a return is filed under this chapter. If the taxpayer is allowed credit under this section based on more or less of another state's tax than he is finally required to pay, the taxpayer shall send notice of the difference to the Commissioner of Revenue Services who shall redetermine the tax for any years affected regardless of any otherwise applicable statute of limitations.

      (P.A. 73-356, S. 9, 10; P.A. 77-614, S. 139, 610; P.A. 81-49, S. 1, 2.)

      History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 81-49 provided that credit be allowed only in respect to sale of the taxpayer's principal place of residence, effective April 22, 1981, and applicable to taxable years of any taxpayer commencing on or after January 1, 1981.

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      Sec. 12-506e. Effective dates of sections 12-505 to 12-508, inclusive. Section 12-506e is repealed.

      (P.A. 73-356, S. 10; P.A. 74-240, S. 1, 2; P.A 80-307, S. 30, 31.)

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      Sec. 12-506f. Exemption of capital gain from sale of residence by persons sixty-five years of age or over. Every husband and wife, and each other person, described as a taxpayer in section 12-505 shall, in addition to the exemptions allowed under the provisions of section 12-506c, be allowed an exemption and deduction from the amount of gains from the sale or exchange of capital assets for any taxable year which are subject to the tax imposed under the provisions of section 12-506 in the amount of any gain for such taxable year included in net gains from the sale or exchange of capital assets for federal income tax purposes, as described in section 12-505, arising from the sale of a residence in such taxable year, but only if (a) either of such spouses or both, or said other person, had attained the age of sixty-five years on the date of such sale and had owned and used such residence as principal residence for at least five years of the eight years immediately preceding the date of such sale and, (b) said gain is the first such gain for such taxpayer with respect to the sale of such a residence on or after January 1, 1974. If the exemption provided for in this section is availed of by a taxpayer in or for any taxable year, no such exemption shall be allowed with respect to such taxpayer or a spouse thereof in any subsequent taxable year. For the purposes of this section, the word "sale" means a "sale", "exchange", "transaction" or "event" through which the taxpayer is divested of all interest in his residence.

      (P.A. 74-63, S. 2, 5; P.A. 75-213, S. 46, 53; P.A. 76-435, S. 49, 82.)

      History: P.A. 75-213 rephrased provisions for greater clarity, effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975; P.A. 76-435 made technical changes.

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      Sec. 12-506g. Exemption for gains subject to tax as income of a Subchapter S corporation. Any shareholder in a small business corporation, as defined in Section 1371 of the Internal Revenue Code, which corporation has made an election not to be subject to tax as a corporation under the federal income tax in accordance with Section 1372 of the Internal Revenue Code, shall not be subject to tax under section 12-506 with respect to any gains from the sale or exchange of capital assets, as defined in section 12-505, included in the income of such corporation for purposes of determining the tax imposed on such corporation under chapter 208.

      (P.A. 79-486, S. 1, 2.)

      History: P.A. 79-486 effective July 1, 1979, and applicable to taxable years commencing on or after January 1, 1979.

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      Sec. 12-506h. Deduction allowed in determining tax on interest income when taxpayer is shareholder in an electing small business corporation subject to tax on such interest. Any shareholder in an electing small business corporation, as that term is defined in Section 1371 of the Internal Revenue Code, when filing for any taxable year as a taxpayer in this state for purposes of the tax imposed on dividends and interest income under section 12-506, shall be allowed a deduction from interest income subject to tax under said section 12-506, with such deduction determined as the amount of any such interest income, which with respect to such corporation is included for the taxable year in net income apportioned to Connecticut in accordance with section 12-218 for purposes of determining the tax applicable to such corporation under chapter 208.

      (P.A. 84-521, S. 1, 2.)

      History: P.A. 84-521 effective June 13, 1984, and applicable to taxable years of taxpayers commencing on or after January 1, 1985.

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      Sec. 12-507. Duties of fiduciary. Any guardian, receiver, referee, trustee, assignee, custodian or other fiduciary, or any officer or agent appointed by any court to conduct the business or conserve the assets of any taxpayer, shall be subject to the tax imposed by this chapter in the same manner and to the same extent as a taxpayer hereunder.

      (June, 1969, P.A. 1, S. 28; P.A. 73-356, S. 7, 10.)

      History: P.A. 73-356 included custodians under provisions of section.

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      Sec. 12-508. Tax return. On or before April fifteenth following the close of each calendar year, in the case of persons reporting on the basis of a calendar year, and on or before the fifteenth day of the fourth month following the close of a fiscal year, in the case of persons reporting on the basis of a fiscal year, each person who earns, receives, accrues or has credited to his account any dividends, interest income or gains from the sale or exchange of capital assets as defined in section 12-505, shall duly execute and file a tax return with the commissioner, in such form and containing such information as he may prescribe, which return shall truly and accurately set forth the amount received and the taxpayer's liability under this chapter; and the full amount of the tax shall be due and payable to the commissioner on or before the date prescribed herein for the filing of the return.

      (June, 1969, P.A. 1, S. 29; June, 1971, P.A. 8, S. 12; 1972, P.A. 250, S. 1; P.A. 73-356, S. 8, 10; P.A. 75-213, S. 47, 53; 75-567, S. 61, 80; June Sp. Sess. P.A. 83-1, S. 12, 15; P.A. 90-28, S. 4.)

      History: 1971 act substituted "persons" for "taxpayers", included dividends in tax liability, referred to requirement that pledgees, assignees, receivers, etc. file return (those required to report under Sec. 12-506a(c)) and required that return state "amounts received" in addition to taxpayer's liability; 1972 act provided for due date when final filing date falls on Saturday, Sunday or holiday; P.A. 73-356 deleted reference to dividends and to repealed Sec. 12-506a(c); P.A. 75-213 restored reference to dividends; P.A. 75-567 added phrase re contents of return containing such information as commissioner prescribes; June Sp. Sess. P.A. 83-1 added reference to "interest income" as a form of investment income subject to tax under Sec. 12-506 and to be included in the tax return required under this section, effective July 1, 1983, and applicable to taxable years of taxpayers commencing on or after January 1, 1983; P.A. 90-28 deleted provision concerning filing requirements when final date for filing falls on a Saturday, Sunday or legal holiday, provision appears in chapter on collection of state taxes.

      Cited. 44 CS 126.

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      Sec. 12-508a. Extension of time for tax return and payment to April 16, 1974. Section 12-508a is repealed.

      (P.A. 74-63, S. 4, 5; P.A. 80-307, S. 30, 31.)

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      Sec. 12-509. Penalty for failure to pay tax when due. Rate of interest applied. Waiver of penalty. (a) If any person fails to pay the amount of tax reported to be due on his return within the time specified under the provisions of this chapter, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid. Such amount shall bear interest at the rate of one and one-fourth per cent per month or fraction thereof, from the due date of such tax until the date of payment.

      (b) If any person has not made his return within three months after the time specified under the provisions of this chapter, the commissioner may make such return at any time thereafter, according to the best information obtainable and according to the form prescribed. To the tax imposed upon the basis of such return, there shall be added an amount equal to ten per cent of such tax. The tax shall bear interest at the rate of one per cent per month or fraction thereof, from the due date of such tax until the date of payment. No taxpayer shall be subject to a penalty under both subsections (a) and (b) of this section in relation to the same tax period.

      (c) Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this chapter when it is proven to his satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect.

      (June, 1969, P.A. 1, S. 30; June, 1971, P.A. 8, S. 13; P.A. 79-586, S. 1, 2; P.A. 80-307, S. 26, 31; P.A. 81-64, S. 17, 23; 81-411, S. 36, 42; P.A. 87-84, S. 1, 4; P.A. 88-314, S. 42, 54; May Sp. Sess. P.A. 94-4, S. 62, 85; P.A. 95-160, S. 64, 69.)

      History: 1971 act substituted "person" for "taxpayer", increased penalty from $2.50 to $25, increased interest from 0.75% to 1% and qualified provision re abatement of penalty by requiring that commissioner be satisfied "beyond a reasonable doubt" and by adding requirement that failure to comply "was not intentional or due to neglect"; P.A. 79-586 deleted additional qualifications for abatement of penalty added in 1971 and made such abatement subject to review by tax review committee, effective June 21, 1979, and applicable to any return filed for a taxable year commencing on or after January 1, 1978; P.A. 80-307 increased interest temporarily to 1.25% for taxes due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-64 amended penalty provisions, including a minimum penalty of $50 and deleting provision re $25 penalty for failure to file return when due and revised waiver provision to conform with other sections; P.A. 81-411 continued interest on taxes not paid when due at 1.25% per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; P.A. 87-84 amended penalty provision related to failure to pay tax when due by eliminating the minimum penalty requirement in the amount of $50; P.A. 88-314 amended Subsec. (a) by restating the imposition of penalty for failure to pay the tax within the time specified and added Subsec. (b) concerning determination of tax by the commissioner when the taxpayer has not made a return within three months after the time specified, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; May Sp. Sess. P.A. 94-4 in Subsec. (b) reduced interest rate from 1.25% to 1% and provided that such interest may only be applied on the tax rather than on the tax and any penalty, effective July 1, 1995, and applicable to taxes due and owing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section.

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      Sec. 12-510. Powers and duties of commissioner. (a) The commissioner or his authorized representative may require any taxpayer or other person required to file under this chapter to submit copies or pertinent extracts of his federal income tax returns, or of any other tax return made to any agency of the federal government, or of this or any other state, or of any statement or registration made pursuant to any state or federal law pertaining to securities or securities exchange regulations.

      (b) The commissioner may require all taxpayers to keep such records as he may prescribe, and he may require the production of books, papers, documents and other data, to provide or secure information pertinent to the determination of the tax imposed by this chapter and the enforcement and collection thereof.

      (c) The commissioner or any person authorized by him may examine the books, papers, records and equipment of any person liable under the provisions of this chapter, and may investigate the activities of the person in order to verify the accuracy of any return made, or, if no return is made by the person, to ascertain and determine the amount required to be paid.

      (d) The commissioner and any representative of the commissioner authorized to conduct any inquiry, investigation or hearing hereunder may administer oaths and take testimony under oath relative to the matter of inquiry or investigation. At any hearing ordered by the commissioner, the commissioner or his representative authorized to conduct such hearing and to issue such process may subpoena witnesses and require the production of books, papers and documents pertinent to such inquiry. No witness under subpoena authorized to be issued by the provisions of this chapter shall be excused from testifying or from producing books or other documentary evidence on the grounds that the production of such books or other documentary evidence would tend to incriminate him, but such evidence or the books or documentary evidence so produced shall not be used in any criminal proceeding against him. If any person disobeys such process or, having appeared in obedience thereto, refuses to answer any pertinent question put to him by the commissioner or his authorized representative, or to produce any books and other documentary evidence pursuant thereto, the commissioner or such representative may apply to the superior court for the judicial district wherein the taxpayer resides or to any judge of said court if the same is not in session, setting forth such disobedience to process or refusal to answer, and said court or such judge shall cite such person to appear before said court or such judge to answer such question or to produce such books and other documentary evidence and, upon his refusal so to do, shall commit such person to a community correctional center until he testifies, but not for a longer period than sixty days. Notwithstanding the serving of the term of such commitment by any person, the commissioner may proceed in all respects with such inquiry and examination as if the witness had not previously been called upon to testify. Officers who serve subpoenas issued by the commissioner or under his authority and witnesses attending hearings conducted by him hereunder shall receive fees and compensation at the same rates as officers and witnesses in the courts of this state, to be paid on vouchers of the commissioner on order of the Comptroller from the appropriation for the administration of this chapter.

      (1969, P.A. 297; June, 1969, P.A. 1, S. 31; June, 1971, P.A. 8, S. 14; P.A. 78-280, S. 2, 127.)

      History: Earlier 1969 act authorized substitution of "community correctional center" for "jail"; 1971 act added reference to other persons required to file under provisions of chapter in Subsec. (a); P.A. 78-280 substituted "judicial district" for "county".

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      Sec. 12-511. Deficiency assessments. (a) After a final return in due form is filed, the commissioner shall cause the same to be examined and may make such further audit or investigation or reaudit as he may deem necessary, and if therefrom he shall determine that there is a deficiency with respect to the payment of any tax due under this chapter, he shall assess or reassess the additional taxes, penalties and interest due to this state, give notice of such assessment or reassessment to the taxpayer, and make demand upon him for payment. Within sixty days of the mailing of such notice, the taxpayer shall pay to the commissioner, in cash or by check, draft or money order drawn to the order of the Commissioner of Revenue Services, the amount of the deficiency. Such amount shall bear interest at the rate of one and one-fourth per cent per month or fraction thereof from the date when the original tax became due and payable. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No taxpayer shall be subject to more than one penalty under this section in relation to the same tax period. Any decision rendered by any federal court holding that a taxpayer has filed a fraudulent return with the Director of Internal Revenue shall subject the taxpayer to a penalty imposed by the preceding sentence without the necessity of further proof thereof, except when it can be shown that the return to the state so differed from the return to the federal government as to afford a reasonable presumption that the attempt to defraud did not extend to the state.

      (b) Except in the case of a wilfully false or fraudulent return with intent to evade the tax, no assessment of additional tax shall be made after the expiration of more than three years from the date of the filing of a return or from the original due date of a return, whichever is later; provided, where no return has been filed as provided by law, the tax may be assessed at any time. Where, before the expiration of the period prescribed herein for the assessment of an additional tax, a taxpayer has consented in writing that such period may be extended, the amount of such additional tax due may be determined at any time within such extended period. The period so extended may be further extended by subsequent consents in writing before the expiration of the extended period.

      (June, 1969, P.A. 1, S. 32; June, 1971, P.A. 8, S. 15; P.A. 80-307, S. 27, 31; P.A. 81-64, S. 18, 23; 81-411, S. 37, 42; P.A. 87-84, S. 2, 4; P.A. 88-314, S. 43, 54; P.A. 91-236, S. 12, 25.)

      History: 1971 act increased interest from 0.75% to 1% and required that deficiency be not "deliberate" for waiver of penalty to be allowed; P.A. 80-307 temporarily increased interest to 1.25% for assessments due on or after July 1, 1980, but not later than June 30, 1981; P.A. 81-64 amended Subsec. (a) to include a minimum penalty of $50 and the waiver of penalty provisions applicable to other state taxes; P.A. 81-411 continued interest on the deficiency assessment at 1.25% per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date; P.A. 87-84 amended the penalty provision in Subsec. (a) related to failure to pay tax when due by eliminating the minimum penalty requirement in the amount of $50; P.A. 88-314 amended Subsec. (a) by deleting the penalty provisions applicable to deficiency assessments and substituting in lieu thereof a restatement of the penalties to be imposed when the deficiency is due to negligence and the deficiency is due to fraud or intent to evade the tax, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date; P.A. 91-236 amended Subsec. (a) to provide for 60, rather than 30, days for payment of deficiency amount, effective July 1, 1991, and applicable to taxes due on or after that date.

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      Sec. 12-511a. Disclosure by taxpayer of relevant changes in federal taxable income. Any individual whose taxable income for federal income tax purposes is adjusted or corrected for any taxable year or portion thereof by any official of the United States government, or any agency thereof, in any respect affecting the tax imposed under this chapter shall, within ninety days after having received written notification of such adjustment or correction, submit to the commissioner an affidavit disclosing such changes or adjustments and thereafter shall promptly furnish to the commissioner any information, schedules, records, documents or papers related to such change, adjustment or correction as he may require. Any individual whose return to the Director of Internal Revenue has been amended in any respect affecting the tax imposed under this chapter shall, within ninety days after having filed such amended return, make an amended return to the commissioner. The time for filing such affidavit or amended return may be extended by the commissioner upon due cause shown. Notwithstanding the limitation of time in subsection (b) of section 12-511, if, upon examination, the commissioner finds that such taxpayer is liable for the payment of an additional tax, he shall, within a reasonable time from the receipt of an amended return or affidavit, notify such taxpayer of the amount of such additional tax, together with interest thereon computed at the rate of one and one-fourth per cent per month or fraction thereof from the date when the original tax became due and payable. Within thirty days of the mailing of such notice, the taxpayer shall pay to the commissioner the amount of such additional tax and interest. If, upon examination of such amended return or affidavit and related information, the commissioner finds that the taxpayer has overpaid the tax due the state, the commissioner shall certify the amount of such overpayment to the Comptroller, and such amount shall be paid to the taxpayer by the State Treasurer upon order of the Comptroller.

      (P.A. 74-63, S. 3, 5; P.A. 77-614, S. 139, 610; P.A. 84-423, S. 3.)

      History: P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 84-423 increased rate of interest applicable to the amount of tax due as a result of an adjustment or correction in a taxpayer's taxable income for federal income tax purposes from 1% to 1.25% per month.

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      Sec. 12-512. Collection of tax, penalties and interest. The amount of any tax, penalty or interest due and unpaid under the provisions of this chapter may be collected under the provisions of section 12-35. The warrant therein provided for shall be signed by the commissioner or his authorized representative. The amount of any such tax, penalty and interest shall be a lien, from the last day of the taxable year until discharged by payment, against all real estate of the taxpayer within the state, and a certificate of such lien signed by the commissioner may be filed for record in the office of the clerk of any town in which such real estate is situated, provided no such lien shall be effective as against any bona fide purchaser or qualified encumbrancer of any interest in any such property. When any tax with respect to which a lien has been recorded under the provisions of this section has been satisfied, the commissioner, upon request of any interested party, shall issue a certificate discharging such lien, which certificate shall be recorded in the same office in which the lien was recorded. Any action for the foreclosure of such lien shall be brought by the Attorney General in the name of the state in the superior court for the judicial district in which the property subject to such lien is situated, or, if such property is located in two or more judicial districts, in the superior court for any one such judicial district, and the court may limit the time for redemption or order the sale of such property or pass such other further decree as it judges equitable.

      (June, 1969, P.A. 1, S. 33; P.A. 78-280, S. 2, 4, 127; P.A. 85-501, S. 6.)

      History: P.A. 78-280 substituted "judicial district(s)" for "county(ies)"; P.A. 85-501 provided that lien shall be effective from the last day of the taxable year rather than last filing day of period for which taxpayer is delinquent and that such lien shall not be effective against a qualified encumbrancer as defined in Sec. 12-35b, deleting reference to purchasers and encumbrancers to whom property is transferred between last day of delinquency period and date of recording lien.

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      Sec. 12-513. Abatement of tax. Section 12-513 is repealed.

      (June, 1969, P.A. 1, S. 34; P.A. 77-614, S. 147, 610; P.A. 90-28, S. 9.)

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      Sec. 12-514. Excess payments. If, within three years after the due date of any return, the commissioner determines that any amount, penalty or interest has been paid more than once or has been erroneously or illegally collected or computed, the commissioner shall credit the excess amount collected or paid against any amounts then due and payable from the person under this chapter or any other chapter administered by the commissioner and the balance shall be refunded, upon order of the Comptroller, to the person or his successors, administrators or executors or any other person legally responsible for the conduct of the affairs of the taxpayer.

      (June, 1969, P.A. 1, S. 35.)

      Cited. 44 CS 90.

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      Sec. 12-515. Refund claims. Any taxpayer who feels that he has overpaid any taxes due under this chapter may file a claim for refund in writing with the commissioner within three years from the due date for which such overpayment was made stating the specific grounds upon which the claim is founded. Not later than ninety days following receipt of such claim for refund the commissioner shall determine whether such claim is valid and if so, said commissioner shall notify the Comptroller of the amount of such refund and the Comptroller shall draw an order on the Treasurer in the amount thereof for payment to the taxpayer. To the amount of such refund there shall be added interest at the rate of three-fourths of one per cent for each month or fraction thereof which elapses between the ninetieth day following receipt of such claim for refund by the commissioner and the date of notice by the commissioner that such refund is due. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. Within thirty days after disallowing any claim in whole or in part the commissioner shall serve notice of his action on the claimant.

      (June, 1969, P.A. 1, S. 36; P.A. 85-356, S. 7, 9.)

      History: P.A. 85-356 added provisions detailing procedures for determining validity of claims for refunds and payment of refunds and interest, if any, effective July 1, 1985, and applicable to taxable years commencing on or after January 1, 1985.

      Cited. 234 C. 614.

      Cited. 44 CS 126.


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      Sec. 12-516. Forms. The commissioner shall design a form of return and forms for such additional statements or schedules as he may require to be filed therewith. Such forms shall provide for the setting forth of such facts as the commissioner may deem necessary for the proper enforcement of this chapter. He shall cause a supply thereof to be printed and shall furnish appropriate blank forms to each taxpayer upon application or otherwise as he may deem necessary. Failure to receive a form shall not relieve any taxpayer from the obligation to file a return under the provisions of this chapter. Each such return shall be signed by the taxpayer, or by a guardian, receiver, referee, trustee, assignee or other fiduciary or any officer or agent appointed by any court to conduct the business or conserve the assets of any taxpayer.

      (June, 1969, P.A. 1, S. 37; June, 1971, P.A. 8, S. 16; P.A. 75-213, S. 48, 53; P.A. 90-160, S. 2.)

      History: 1971 act replaced reference to taxpayers "in the hands of" guardians, receivers, referees, trustees, etc. with "return filed under subsection (c) of section 12-506a" and substituted person responsible for "filing such return" for person responsible "for the conduct of the affairs" of such taxpayers; P.A. 75-213 restored references to guardians, receivers, referees, trustees, etc. and to conduct of affairs of taxpayers, deleting reference to repealed Subsec. (c) of Sec. 12-506a, effective July 1, 1975, and applicable to taxable years commencing on and after January 1, 1975; P.A. 90-160 deleted the requirement that each return shall be made under oath or affirmation and inserted in lieu thereof the requirement that the return be signed by the taxpayer or the person responsible for the conduct of the taxpayer's affairs.

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      Sec. 12-517. Extension of time for filing return and paying tax. The commissioner may for reasonable cause extend the time for the filing of any return due under this chapter and the payment of tax due thereon under such rules and regulations as he shall prescribe. Said commissioner may require the filing of a tentative return and the payment of an estimated tax. Any additional tax which may be found to be due on the filing of a final return as allowed by such extension shall bear interest at the rate of one and one-fourth per cent per month or fraction thereof from the original due date of such tax to the date of actual payment.

      (June, 1969, P.A. 1, S. 38; June, 1971, P.A. 8, S. 17; P.A. 81-411, S. 38, 42.)

      History: 1971 act increased interest rate from 0.75% to 1%; P.A. 81-411 increased interest on tax due on final return after an extension of time for filing to 1.25% per month, effective July 1, 1981, and applicable to taxes becoming due on or after that date.

      Authority delegation not unconstitutional. 163 C. 478.

      Cited. 44 CS 126.


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      Sec. 12-517a. Declarations of estimated tax and payment related to dividends, interest income and capital gains. (a)(1) Any taxpayer subject to the tax imposed on dividends and interest income under this chapter with respect to any taxable year shall submit a declaration of estimated tax on or before the fifteenth day of the sixth month of such taxable year, provided the tax required to be paid on such dividends and interest income for such taxable year can reasonably be expected to exceed two hundred dollars or the tax, if any, required to be paid on such income for the next preceding taxable year exceeded two hundred dollars. Any taxpayer filing such declaration shall make payment to the Commissioner of Revenue Services, to be included with such declaration, in an amount equal to fifty per cent of such estimated tax.

      (2) Any taxpayer subject to the tax imposed on gains from the sale or exchange of capital assets under this chapter with respect to any taxable year shall submit, on or before the fifteenth day of the sixth month of such taxable year, a declaration of the amount of estimated tax applicable to all such gains which have been earned, received in fact or constructively, accrued or credited to such taxpayer in the first five full months of such income year, provided the amount of such estimated tax is equal to two thousand dollars or more. Any taxpayer filing such declaration shall make payment to the Commissioner of Revenue Services, to be included with such declaration, in an amount equal to one hundred per cent of the estimated tax applicable to all such gains in the period of five full months.

      (3) Any taxpayer subject to tax under this chapter with respect to any taxable year shall submit, on or before the fifteenth day of the second month following the end of such taxable year, a declaration of estimated tax applicable to dividends, interest income and gains from the sale or exchange of capital assets for such taxable year, provided the total of such tax may reasonably be expected to exceed two thousand dollars. Any taxpayer filing such declaration shall make payment to the Commissioner of Revenue Services, to be included with such declaration, in an amount which, together with any prior payments on account of such estimated tax, is equal to one hundred per cent of such estimated tax.

      (b) The commissioner shall prescribe or furnish the form for such declaration and shall require that such declaration include any and all information necessary or desirable in order to determine the amount of estimated tax or any installment thereof payable hereunder.

      (c) Any declaration filed prior to the fifteenth day of the second month following the end of such taxable year may be amended on or before said day in accordance with regulations adopted by the commissioner.

      (Nov. Sp. Sess. P.A. 81-4, S. 20, 32; P.A. 82-325, S. 3, 7; June Sp. Sess. P.A. 83-1, S. 13, 15; P.A. 89-16, S. 17, 31.)

      History: Nov. Sp. Sess. P.A. 81-4 effective January 27, 1982, and applicable to taxable years of taxpayers commencing on or after January 1, 1983; P.A. 82-325 revised effective date of 1981 act but without affecting this section; June Sp. Sess. P.A. 83-1 amended Subsecs. (a) and (b) by adding "interest income" as income to be included in the declaration of estimated tax required under this section, effective January 1, 1984, and applicable to taxable years of taxpayers commencing on or after said date; P.A. 89-16 added provisions with respect to dividends, interest income and capital gains requiring a declaration of estimated tax and payment to be made in the sixth month of the taxable year and in the second month following the end of the taxable year, effective March 23, 1989, and applicable to taxable years commencing on or after January 1, 1989.

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      Sec. 12-517b. Installment payment on account of estimated tax. Amount and when payable. Section 12-517b is repealed effective March 23, 1989, and applicable to income years commencing on or after January 1, 1989.

      (Nov. Sp. Sess. P.A. 81-4, S. 21, 32; P.A. 82-325, S. 3, 7; P.A. 89-16, S. 30, 31.)

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      Sec. 12-517c. Interest added when estimated payment on dividends, interest income or capital gains is less than minimum required. (a) In addition to the tax imposed on dividends, interest income and gains from the sale or exchange of capital assets under this chapter with respect to any taxable year, any taxpayer subject to said tax who has not, as provided in section 12-517a, made payment (1) on account of the tax applicable to dividends and interest income for such taxable year, on or before the fifteenth day of the sixth month of such taxable year, of an installment at least equal to the lesser of (A) fifty per cent of the estimated tax for such taxable year, which estimated tax for purposes of this section may not be less than ninety per cent of the tax determined to be due for such taxable year or (B) sixty per cent of the assumed tax with respect to dividends and interest income for such taxable year, (2) on account of the tax applicable to gains from the sale or exchange of capital assets for such taxable year, on or before the fifteenth day of the sixth month of such taxable year, in an amount at least equal to the lesser of (A) one hundred per cent of the tax with respect to all such gains earned, received in fact or constructively, accrued or credited to the taxpayer during the first five full months of such taxpayer's taxable year, as provided in subdivision (2) of subsection (a) of section 12-517a or (B) sixty per cent of the assumed tax with respect to gains from the sale or exchange of capital assets for such taxable year, or (3) on account of the tax applicable to dividends, interest income and gains from the sale or exchange of capital assets for such taxable year, on or before the fifteenth day of the second month following the end of such taxable year, in an amount which, together with any prior payments on account of such tax, is at least equal to the lesser of (A) one hundred per cent of such estimated tax, which for purposes of this section may not be less than ninety per cent of the tax determined to be due for such taxable year or (B) one hundred per cent of the assumed tax with respect to such taxable year, shall on or before the due date for filing the final return for such taxable year prescribed in section 12-508 pay to the commissioner interest on the part of any such installment not so paid, at the rate of one and one-fourth per cent per month, or fraction thereof, from the aforementioned date relating to the installment to the date of payment. For purposes of this subsection the term "assumed tax" means the amount obtained by computing with respect to the taxpayer a tax at the rates applicable to such taxable year but on the basis of all other facts relating to the taxpayer for, and all other provisions of law applicable to, the next preceding taxable year.

      (b) If any part of the interest referred to in subsection (a) of this section with respect to tax for any taxable year is not paid to the commissioner on or before the due date for filing the final return for such taxable year prescribed in said section 12-508, such unpaid interest shall be added to the tax imposed under section 12-506 for such taxable year.

      (c) If any installment payment, as required in section 12-517a, is less than the minimum amount required under this section for such income year, a penalty shall be imposed with respect to such payment in the amount of ten per cent of the part of such installment which is less than such minimum amount, or fifty dollars, whichever amount is greater.

      (d) The commissioner shall waive any penalty applicable with respect to gains from the sale or exchange of capital assets earned, received in fact or constructively, accrued or credited to a taxpayer, in the calendar year commencing January 1, 1989, whose adjusted gross income, reduced by the amount of any such gains, is less than fifty-four thousand dollars.

      (Nov. Sp. Sess. P.A. 81-4, S. 22, 32; P.A. 82-325, S. 3, 7; June Sp. Sess. P.A. 83-1, S. 14, 15; P.A. 89-16, S. 18, 31.)

      History: Nov. Sp. Sess. P.A. 81-4 effective January 27, 1982, and applicable to taxable years of taxpayers commencing on or after January 1, 1983; P.A. 82-325 revised effective date of 1981 act but without affecting this section; June Sp. Sess. P.A. 83-1 amended Subsec. (a) by adding "interest income" as income subject to requirements in this section concerning minimum installment payments on account of the estimated tax, effective January 1, 1984, and applicable to taxable years of taxpayers commencing on or after said date; P.A. 89-16 added provisions imposing interest charges and penalty when any payment of estimated tax with respect to dividends, interest income or capital gains, as required under Sec. 12-517a, is less than the minimum amount required, effective March 23, 1989, and applicable to income years commencing on or after January 1, 1989.

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      Sec. 12-518. Enforcement. Regulations. The commissioner shall enforce the provisions of this chapter and may adopt and enforce rules and regulations relating to the administration and enforcement of this chapter. The commissioner may prescribe the extent to which any ruling or regulation shall be applied with retroactive effect.

      (June, 1969, P.A. 1, S. 39.)

      Cited. 163 C. 520.

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      Sec. 12-519. Penalties for wilful failure to comply with requirements of this chapter. (a) Any person required under this chapter to pay any tax, or required under this chapter or by regulations adopted in accordance with the provisions of section 12-518 to make a return, keep any records or supply any information, who wilfully fails to pay such tax, make such return, keep such records, or supply such information, at the time required by law or regulations, shall, in addition to any other penalty provided by law, be fined not more than one thousand dollars or imprisoned not more than one year or both.

      (b) Any person who wilfully delivers or discloses to the commissioner or his authorized agent any list, return, account, statement, or other document, known by him to be fraudulent or false in any material matter, shall in addition to any other penalty provided by law, be fined not more than five thousand dollars or imprisoned not more than five years nor less than one year or both. No person shall be charged with an offense under both subsection (a) or (b) of this section in relation to the same tax period but such person may be charged and prosecuted for both such offenses upon the same information.

      (June, 1969, P.A. 1, S. 40; June, 1971, P.A. 8, S. 18; P.A. 88-314, S. 44, 54.)

      History: 1971 act substituted "person" for "taxpayer"; P.A. 88-314 deleted the entire section concerning applicable penalties for wilful failure to comply with requirements of this chapter and substituted in lieu thereof new penalty provisions related to wilful failure to pay the tax or make a return at the time required and wilful delivery of a return or any other document known to be fraudulent or false, effective July 1, 1988, and applicable to any tax which first becomes due and payable on or after said date, to any return or report due on or after said date, or in the case of any ongoing obligation imposed in accordance with said act, to the tax period next beginning on or after said date.

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      Sec. 12-520. Report by Commissioner of Revenue Services. Confidential information. The Commissioner of Revenue Services shall publish in his annual report data showing the amount of taxes collected under this chapter, the amount of penalties assessed under the provisions of this chapter, and such classifications of taxpayers with such other facts as he deems pertinent and valuable. Such published figures shall not disclose the operations of any taxpayer in such manner as to permit the identification of such taxpayer by those unassociated with his business.

      (June, 1969, P.A. 1, S. 41; P.A. 76-436, S. 325, 681; P.A. 77-614, S. 139, 610; P.A. 82-67, S. 3.)

      History: P.A. 76-436 deleted reference to court of common pleas, substituted "a violation" for "infraction" and deleted "such fine and imprisonment" after "both", effective July 1, 1978; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 82-67 eliminated references to limitations on disclosure of information obtained in examining records or returns of taxpayers, which limitations are included in section 12-15 as amended by P.A. 82-67.

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      Sec. 12-521. Appeal to commissioner. Any person, aggrieved by the action of the commissioner or his authorized agent in fixing the amount of any tax, penalty or interest provided for by this chapter may apply to the commissioner, in writing, within sixty days after notice of such action is delivered or mailed to him, for a hearing and a correction of the amount of the tax, penalty or interest so fixed, setting forth the reasons why such hearing should be granted and the amount in which such tax, penalty or interest should be reduced. The commissioner shall promptly consider each such application and may grant or deny the hearing requested. If the hearing is denied, the applicant shall be notified thereof forthwith. If it is granted, the commissioner shall notify the applicant of the time and place fixed for such hearing. After such hearing the commissioner may make such order in the premises as appears to him just and lawful and shall furnish a copy of such order to the applicant. The commissioner may, by notice in writing, at any time within three years after the date when any return of any person has been due, order a hearing on his own initiative and require the person filing such return or any other individual whom he believes to be in possession of relevant information concerning the taxpayer or the person filing such return to appear before him or his authorized agent with any specified books of account, papers or other documents, for examination under oath.

      (June, 1969, P.A. 1, S. 42; June, 1971, P.A. 8, S. 19; P.A. 91-236, S. 13, 25.)

      History: 1971 act substituted "person" or "person filing such return" for "taxpayer" in most references and added "person filing such return" in provision re appearance of persons with relevant information before commissioner; P.A. 91-236 provided for 60, rather than 30, days to request a hearing, effective July 1, 1991, and applicable to taxes due on or after that date.

      Cited. 163 C. 478. Cited. 185 C. 186.

      No interest is to be paid on a refund made administratively by the tax commissioner of an overpayment of the capital gains and dividends tax. 31 CS 134.


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      Sec. 12-522. Appeal from commissioner. Notwithstanding the provisions of chapter 54 to the contrary, any person aggrieved because of any order, decision, determination or disallowance of the Commissioner of Revenue Services under the provisions of this chapter may, within one month after service upon such person of notice of such order, decision, determination or disallowance, take an appeal therefrom to the superior court for the judicial district of New Britain, which shall be accompanied by a citation to the Commissioner of Revenue Services to appear before said court. Such citation shall be signed by the same authority, and such appeal shall be returnable at the same time and served and returned in the same manner, as is required in case of a summons in a civil action. The authority issuing the citation shall take from the appellant a bond or recognizance to the state of Connecticut, with surety to prosecute the appeal to effect and to comply with the orders and decrees of the court in the premises. Such appeals shall be preferred cases, to be heard unless cause appears to the contrary, at the first session by the court or by a committee appointed by it. Said court may grant such relief as may be equitable and, if such tax has been paid prior to the granting of such relief, may order the Treasurer to pay the amount of such relief, with interest at the rate of nine per cent per annum, to the aggrieved taxpayer. If the appeal has been taken without probable cause, the court may charge double or triple costs, as the case demands, and upon all such appeals which may be denied, costs may be taxed against the appellant at the discretion of the court but no costs shall be taxed against the state.

      (June, 1969, P.A. 1, S. 43; June, 1971, P.A. 8, S. 20; P.A. 74-47, S. 1-3; P.A. 77-614, S. 139, 610; P.A. 80-353; 80-483, S. 159, 186; P.A. 88-230, S. 1, 12; P.A. 89-343, S. 15, 17; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 99-215, S. 24, 29.)

      History: 1971 act substituted "person" for "taxpayer"; P.A. 74-47 added phrase "Notwithstanding the provisions of chapter 54 to the contrary" and added Subsec. (b) re dismissal of suits pending in court of common pleas and assumption of cases by superior court; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 80-353 substituted judicial district of Hartford-New Britain for Hartford county and deleted Subsec. (b); P.A. 80-483 made technical changes; P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991; P.A. 89-343 increased the rate of interest on the amount of relief ordered by the court from 7% to 9% per annum; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993: P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-215 replaced "judicial district of Hartford" with "judicial district of New Britain", effective June 29, 1999.

      Cited. 170 C. 567. Cited. 188 C. 206. Cited. 199 C. 133.

      Cited. 31 CS 134.


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      Sec. 12-522a. Applicability of chapter provisions limited. The provisions of this chapter shall not be applicable with respect to any dividends, interest income or gains from the sale or exchange of capital assets which are earned, received in fact or constructively, accrued or credited to a taxpayer during any taxable year of such taxpayer commencing on or after January 1, 1992.

      (June Sp. Sess. P.A. 91-3, S. 156, 168; May Sp. Sess. P.A. 92-5, S. 36, 37.)

      History: June Sp. Sess. P.A. 91-3, S. 156 effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; May Sp. Sess. P.A. 92-5 made a technical change.

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