Substitute House Bill No. 6950
Substitute House Bill No. 6950
PUBLIC ACT NO. 97-193
AN ACT FACILITATING COLLECTION OF DELINQUENT
CORPORATE TAXES.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Subdivision (72) of section 12-81
of the general statutes is repealed and the
following is substituted in lieu thereof:
(72) [(a)] (A) New machinery and equipment,
as defined herein, acquired after October 1, 1990,
and newly-acquired machinery and equipment, as
defined herein, acquired on or after July 1, 1992,
by the person claiming exemption under this
subdivision, provided this exemption shall only be
applicable in the five full assessment years
following the assessment year in which such
machinery or equipment is acquired, subject to the
provisions of subparagraph [(b)] (B) of this
subdivision. Machinery and equipment acquired on
or after July 1, 1996, and used in the
biotechnology industry, whose predominant use is
for manufacturing, processing or fabricating; for
research and development, including experimental
or laboratory research and development, design or
engineering; for the significant servicing,
overhauling or rebuilding of machinery and
equipment; or for measuring or testing, shall
qualify for the exemption under this subsection.
For the purposes of this subdivision: [(A)] (i)
"Machinery" and "equipment" mean tangible personal
property which is [(i)] installed in a
manufacturing facility operated by a manufacturer,
either five-year property or seven-year property,
as those terms are defined in Section 168(e) 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 predominant use of which is for
manufacturing, processing or fabricating; for
research and development, including experimental
or laboratory research and development, design or
engineering directly related to manufacturing; for
the significant servicing, overhauling or
rebuilding of machinery and equipment for
industrial use or the significant overhauling or
rebuilding of other products on a factory basis;
for measuring or testing or for metal finishing;
or [(ii)] used in the production of motion
pictures, video and sound recordings. "Machinery"
means the basic machine itself, including all of
its component parts and contrivances such as
belts, pulleys, shafts, moving parts, operating
structures and all equipment or devices used or
required to control, regulate or operate the
machinery, including, without limitation,
computers and data processing equipment, together
with all replacement and repair parts therefor,
whether purchased separately or in conjunction
with a complete machine, and regardless of whether
the machine or component parts thereof are
assembled by the taxpayer or another party.
"Equipment" means any device separate from
machinery but essential to a manufacturing,
processing or fabricating process. [(B)] (ii)
"Manufacturing facility" means that portion of a
plant, building or other real property improvement
used for manufacturing, processing or fabricating,
for research and development, including
experimental or laboratory research and
development, design or engineering directly
related to manufacturing, for the significant
servicing, overhauling or rebuilding of machinery
and equipment for industrial use or the
significant overhauling or rebuilding of other
products on a factory basis, for measuring or
testing or for metal finishing. [(C)] (iii)
"Manufacturing" means the activity of converting
or conditioning tangible personal property by
changing the form, composition, quality or
character of the property for ultimate sale at
retail or use in the manufacturing of a product to
be ultimately sold at retail. Changing the quality
of property shall include any substantial overhaul
of the property that results in a significantly
greater service life than such property would have
had in the absence of such overhaul or with
significantly greater functionality within the
original service life of the property, beyond
merely restoring the original functionality for
the balance of the original service life. [(D)]
(iv) "Fabricating" means to make, build, create,
produce or assemble components or tangible
personal property work in a new or different
manner. [(E)] (v) "Processing" means the physical
application of the materials and labor necessary
to modify or change the characteristics of
tangible personal property. [(F)] (vi) "Measuring
or testing" includes both nondestructive and
destructive measuring or testing, and the
alignment and calibration of machinery, equipment
and tools, in the furtherance of the
manufacturing, processing or fabricating of
tangible personal property. [(G)] (vii)
"Biotechnology" means the application of
technologies, such as recombinant DNA techniques,
biochemistry, molecular and cellular biology,
genetics and genetic engineering, biological cell
fusion techniques, and new bioprocesses, using
living organisms, or parts of organisms, to
produce or modify products, to improve plants or
animals, to development microorganisms for
specific uses, to identify targets for small
molecule pharmaceutical development, to transform
biological systems into useful processes and
products or to develop microorganisms for specific
uses;
[(b)] (B) Any person who on October first in
any year holds title to machinery and equipment
for which he desires to claim the exemption
provided in this subdivision shall file with the
assessor or board of assessors in the municipality
in which the machinery or equipment is located, on
or before the first day of November in such year,
a list of such machinery or equipment together
with written application claiming such exemption
on a form prescribed by the Secretary of the
Office of Policy and Management. Such application
shall include the taxpayer identification number
assigned to the claimant by the Commissioner of
Revenue Services and the federal employer
identification number assigned to the claimant by
the Secretary of the Treasury. If title to such
equipment is held by a person other than the
person claiming the exemption, the claimant shall
include on his application information as to the
portion of the total acquisition cost incurred by
him, and on or before the first day of November in
such year, the person holding title to such
machinery and equipment shall file a list of such
machinery with the assessor of the municipality in
which the manufacturing facility of the claimant
is located. Such person shall include on the list
information as to the portion of the total
acquisition cost incurred by him. Commercial or
financial information in any application or list
filed under this section shall not be open for
public inspection, provided such information is
given in confidence and is not available to the
public from any other source. The provisions of
this subdivision regarding the filing of lists and
information shall not supersede the requirements
to file tax lists under sections 12-42, 12-43,
12-57a and 12-59. In substantiation of such claim,
the claimant and the person holding title to
machinery and equipment for which exemption is
claimed shall present to the assessor or board of
assessors such supporting documentation as said
secretary may require, including, but not limited
to, invoices, bills of sale, contracts for lease
and bills of lading. Failure to file such
application in this manner and form within the
time limit prescribed shall constitute a waiver of
the right to such exemption for such assessment
year, unless an extension of time is allowed by
the Secretary of the Office of Policy and
Management as set forth in section 12-81k and upon
payment of the required fee for late filing. If
title to exempt machinery is conveyed subsequent
to October first in any assessment year,
entitlement to such exemption shall terminate for
the next assessment year and there shall be no pro
rata application of the exemption unless such
machinery or equipment continues to be leased by
the manufacturer who claimed and was approved for
the exemption in the previous assessment year.
Machinery or equipment that was exempt under this
subdivision for a five-year term or a portion
thereof shall not be eligible for exemption upon
transfer to a business organization related to or
affiliated with the seller;
[(c)] (C) Any person claiming the exemption
provided under this subdivision for machinery or
equipment shall not be eligible to claim the
exemption provided under subdivision (60) of this
section or subdivision (70) of this section for
the same machinery or equipment. The state and the
municipality and district shall hold a security
interest, as defined in subdivision (37) of
section 42a-1-201, in any machinery or equipment
which is exempt from taxation pursuant to this
subdivision, in an amount equal to the tax revenue
reimbursed or lost, as the case may be, which
shall be subordinate to any purchase money
security interest, as defined in section
42a-9-107. Such security interest shall be
enforceable against the claimant for a period of
five years after the last assessment year in which
such exemption was received in any case in which
said manufacturer ceases all manufacturing
operations or moves its manufacturing operations
entirely out of this state. A public service
company, as defined in section 16-1, shall not be
eligible for the exemption provided under this
subdivision;
[(d)] (D) A claim for property tax exemption
under this subdivision may be denied by the
assessor or board of assessors of a town,
consolidated town and city or consolidated town
and borough, with the consent of the chief
executive officer thereof, if the claimant is
delinquent in a property tax payment to such town,
consolidated town and city or consolidated town
and borough, pursuant to section 12-146, for
property owned by such claimant. Before any such
claim is denied, the assessor or board of
assessors shall send written notice to the
claimant, stating that he may pay the amount of
such delinquent tax or enter into an agreement
with such town, consolidated town and city or
consolidated town and borough for the payment
thereof, by the date set forth in said notice,
provided, such date shall not be less than thirty
days after the date of such notice. Failure on the
part of the claimant to pay the amount of the
delinquent tax or enter into an agreement to pay
the amount thereof by said date shall result in a
disallowance of the exemption being claimed;
(E) THE SECRETARY, IN HIS DISCRETION, MAY DENY
ANY CLAIM FOR EXEMPTION UNDER THE PROVISIONS OF
THIS SUBDIVISION FOR NEW MACHINERY AND EQUIPMENT
BY A CLAIMANT WHO IS DELINQUENT IN THE PAYMENT OF
CORPORATION BUSINESS TAX IMPOSED UNDER CHAPTER
208, AS REPORTED ON THE LIST PROVIDED BY THE
COMMISSIONER OF REVENUE SERVICES PURSUANT TO
SUBSECTION (b) OF SECTION 12-7a, AS AMENDED BY
SECTION 3 OF THIS ACT, AND WHO QUALIFIED FOR
EXEMPTION UNDER THIS SUBDIVISION IN THE PRECEDING
YEAR. ON OR BEFORE SEPTEMBER FIRST ANNUALLY,
COMMENCING SEPTEMBER 1, 1998, THE SECRETARY SHALL
SEND A WRITTEN NOTICE TO ANY CLAIMANT IDENTIFIED
ON SAID LIST AND TO THE ASSESSOR OF THE TOWN IN
WHICH THE PROPERTY IS SUBJECT TO TAXATION, STATING
THAT THE PROPERTY TAX EXEMPTION ALLOWED BY THIS
SUBDIVISION FOR THE ASSESSMENT DATE FOLLOWING THE
DATE ON WHICH SUCH NOTICE IS SENT, SHALL BE DENIED
BY THE ASSESSOR OF THE TOWN IN WHICH THE PROPERTY
OF THE TAXPAYER IS SUBJECT TO TAXATION UNLESS THE
TAXPAYER PROVIDES WRITTEN DOCUMENTATION FROM THE
DEPARTMENT OF REVENUE SERVICES THAT THE
DELINQUENCY HAS BEEN CLEARED. SUCH WRITTEN
DOCUMENTATION SHALL SUBSTANTIATE THAT THE
DELINQUENCY WAS CLEARED ON OR BEFORE THE STATUTORY
DATE FOR THE FILING OF AN APPLICATION FOR
EXEMPTION UNDER THIS SUBDIVISION, PROVIDED, IF A
TAXPAYER RECEIVES AN EXTENSION OF THE FILING DATE
PURSUANT TO SECTION 12-81k, THE DATE BY WHICH HE
SHALL BE REQUIRED TO CLEAR SUCH TAX DELINQUENCY
SHALL BE EXTENDED FOR A LIKE PERIOD OF TIME. NO
ASSESSOR SHALL APPROVE AN APPLICATION FOR THE
EXEMPTION UNDER THIS SUBDIVISION THAT IS NOT
ACCOMPANIED BY THE WRITTEN DOCUMENTATION REQUIRED
FROM A CLAIMANT WHO WAS SENT A NOTIFICATION BY THE
SECRETARY OF THE OFFICE OF POLICY AND MANAGEMENT.
Sec. 2. (NEW) The Commissioner of Revenue
Services may disallow any credit otherwise
allowable for a taxable year against the tax
imposed under chapter 208 of the general statutes
if the company claiming the credit has any amount
of taxes due and unpaid to the state including
interest, penalties, fees and other charges
related thereto for which a period in excess of
thirty days has elapsed following the date on
which such taxes were due and which are not the
subject of a timely filed administrative appeal to
the commissioner or of a timely filed appeal
pending before any court of competent
jurisdiction. Before any such disallowance, the
commissioner shall send written notice to the
company, stating that it may pay the amount of
such delinquent tax or enter into an agreement
with the commissioner for the payment thereof, by
the date set forth in said notice, provided, such
date shall not be less than thirty days after the
date of such notice. Failure on the part of the
company to pay the amount of the delinquent tax or
enter into an agreement to pay the amount thereof
by said date shall result in a disallowance of the
credit being claimed.
Sec. 3. Section 12-7a of the general statutes
is repealed and the following is substituted in
lieu thereof:
(a) The annual report prepared by the
Commissioner of Revenue Services for submission to
the Governor and publication as provided in
section 4-60 shall not be required to include the
name of any person liable for payment of any tax
which is unpaid. The commissioner shall prepare
and maintain a list related to each type of tax
levied by the state, containing the name and
address of any person or corporation liable for
payment of any such tax and the amount thereof,
including any applicable interest or penalties,
which tax, as of the end of the fiscal year with
respect to which such report is prepared, is
unpaid and a period in excess of ninety days has
elapsed following the date on which such tax was
due, exclusive of any tax determined to be
uncollectible in accordance with section 12-37,
any tax on which an appeal is pending and any tax
which has been abated by said commissioner as
provided in section 12-39. Such lists shall be
available to the public for inspection by any
person.
(b) THE COMMISSIONER SHALL ANNUALLY PREPARE,
FROM THE LIST PREPARED PURSUANT TO SUBSECTION (a)
OF THIS SECTION, A LIST OF TAXPAYERS WHO ARE
DELINQUENT IN THE PAYMENT OF THE CORPORATION
BUSINESS TAX UNDER CHAPTER 208. THE LIST SHALL BE
ARRANGED IN SEQUENTIAL ORDER BY THE TAXPAYER
IDENTIFICATION NUMBER ASSIGNED BY THE COMMISSIONER
AND SHALL BE PROVIDED TO THE SECRETARY OF THE
OFFICE OF POLICY AND MANAGEMENT NOT LATER THAN
JULY FIFTEENTH ANNUALLY, COMMENCING JULY 15, 1998.
Sec. 4. Subsection (a) of section 12-15 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(a) No officer or employee, including any
former officer or former employee, of the state or
of any other person who has or had access to
returns or return information in accordance with
subdivision (2) of subsection (c) of this section
shall disclose any return or return information,
except as hereinafter provided. The commissioner
may disclose (1) returns or return information to
another state agency or office, upon written
request by the head of such agency or office, when
required in the course of duty or when there is
reasonable cause to believe that any state law is
being violated, provided no such agency or office
shall disclose such returns or return information,
other than in a judicial or administrative
proceeding to which such agency or office is a
party pertaining to the enforcement of state law,
in a form which can be associated with, or
otherwise identify, directly or indirectly, a
particular taxpayer; (2) returns or return
information to the Auditors of Public Accounts,
when required in the course of duty under chapter
23; (3) returns or return information to tax
officers of another state or of a Canadian
province or of a political subdivision of such
other state or province or of the District of
Columbia or to any officer of the United States
Treasury Department or the United States
Department of Health and Human Services,
authorized for such purpose in accordance with an
agreement between this state and such other state,
province, political subdivision, the District of
Columbia or department, respectively, when
required in the administration of taxes imposed
under the laws of such other state, province,
political subdivision, the District of Columbia or
the United States, respectively, and when a
reciprocal arrangement exists; (4) returns or
return information in any action, case or
proceeding in any court of competent jurisdiction,
when the commissioner or any other state
department or agency is a party, and when such
information is directly involved in such action,
case or proceeding; (5) returns or return
information to a taxpayer or its authorized
representative, upon written request for a return
filed by or return information on such taxpayer;
(6) returns to a successor, receiver, trustee,
executor, administrator, assignee, guardian or
guarantor of a taxpayer, when such person
establishes, to the satisfaction of the
commissioner, that he has a material interest
which will be affected by information contained in
such return; (7) information to the assessor of a
Connecticut municipality, when the information
disclosed is limited to (A) a list of real or
personal property that is or may be subject to
property taxes in such municipality or (B) a list
containing the name of each person who is issued
any license, permit or certificate which is
required, under the provisions of this title, to
be conspicuously displayed and whose address is in
such municipality; (8) real estate conveyance tax
return information or controlling interest
transfer tax return information to the town clerk
of a Connecticut municipality. Any person who
violates any provision of this section shall be
fined not more than one thousand dollars or
imprisoned not more than one year or both; (9)
RETURNS OR RETURN INFORMATION TO THE SECRETARY OF
THE OFFICE OF POLICY AND MANAGEMENT FOR PURPOSES
OF SUBSECTION (b) OF SECTION 12-7a, AS AMENDED BY
SECTION 3 OF THIS ACT.
Sec. 5. This act shall take effect from its
passage and be applicable to income years
commencing on or after January 1, 1998.
Approved June 24, 1997