You asked (1) whether any states offer sales tax exemptions for purchases of taxable goods or services by company headquarters located in the state, (2) how many company headquarters are located in Connecticut, and (3) whether Connecticut has any economic development programs or tools specifically tailored to attract or retain company headquarters to or in Connecticut.

We were unable to locate any states that offer a sales tax exemption for goods and services purchased by companies headquartered in the state. However, we found seven states that offer tax incentive programs specifically targeted to companies relocating their corporate headquarters to the state. Two of these states, Florida and Tennessee, offer a credit or refund that relocating companies can use to reduce their sales tax liability. Six of the states (Indiana, Mississippi, South Carolina, Tennessee, West Virginia, and Wisconsin) offer tax credits (1) to offset relocation costs or (2) based on the number of jobs the company creates or capital investment it makes in the state.

Many businesses, including large multistate and multinational corporations, are headquartered in Connecticut. Of the 54,595 companies listed in Bloomberg L.P.'s October 2011 company index, 570 have their headquarters here. In addition, 11 companies listed on the 2011 Fortune 500, and 23 listed on the Fortune 1000, are headquartered in Connecticut.

Although Connecticut offers business tax credits and property tax exemptions to local and out-of-state businesses developing new facilities here, including headquarters, it does not specifically target company headquarters. But between October 2009 and September 2011, the state gave assistance to eight economic development projects for multi-state companies that either relocated their company headquarters to the state or maintained them here.

A computer search found seven states with tax incentive programs that are specifically targeted to companies relocating their corporate headquarters to the state. Table 1 lists the states and briefly describes the type and amount of the incentive, its eligibility requirements, and the taxes or fees to which it applies.

While none of the states offers a sales tax exemption for the goods and services relocating companies purchase, two offer other types of incentives that these companies can use to reduce their sales tax liability. Tennessee awards qualifying companies a sales tax credit on qualified goods they purchase for new headquarters facilities. Florida issues a tax refund to qualifying companies that may be used against the sales tax or a number of other state taxes.

All of the programs we examined either require the companies to create a certain number of jobs to qualify for the tax incentive or base the tax credit amount on the number of jobs created. Florida, Mississippi, Tennessee, and Wisconsin also consider whether the jobs meet specific salary thresholds when determining a company's qualifications for the credit or the credit amount.

The taxes to which the credits and refunds apply vary by state. The incentives may be used primarily against business and income taxes, such as corporation, personal income, insurance premium, and telecommunications taxes. South Carolina also allows companies to apply the corporate headquarters credit against their corporation license fees.

TABLE 1: STATE TAX INCENTIVES FOR COMPANIES RELOCATING THEIR CORPORATE HEADQUARTERS

Of the 54,595 companies and organizations included in Bloomberg L.P.'s October 2011 company index, 570 are headquartered in Connecticut. The Bloomberg index lists companies by industry, number of employees, headquarters location, and revenue for the last 12 months. Table 2 shows the 35 companies in the Bloomberg index that have at least $1 billion in revenue for the last 12 months and are headquartered in Connecticut. (We can send you a complete list of all the Connecticut-headquartered companies at your request.)

TABLE 2: COMPANIES WITH $1 BILLION OR MORE IN ANNUAL REVENUE AND HEADQUARTERED IN CONNECTICUT

Source: Bloomburg L.P., October 2011 company index

The state offers business tax credits and property tax exemptions to Connecticut and out-of-state businesses developing new facilities here. The range of eligible projects includes corporate headquarters, but the determining criteria for many incentives include the type of business (e.g., manufacturing, banking) and the project's location (e.g., state designated enterprise zones, targeted investment communities).

Table 4 summarizes the property tax exemptions for businesses developing new facilities. These include the mandatory five year, 80% exemption for manufacturers and specified service businesses in enterprise zones and TICs as well as two exemptions municipalities may offer at their discretion. The property tax exemptions for large-scale development projects target specific business uses, including headquarters offices. The exemptions authorized under the Connecticut City and Town Development Act are for businesses that occupy property a municipality acquired and developed under a development plan.