Substitute House Bill No. 5679
          Substitute House Bill No. 5679

              PUBLIC ACT NO. 98-244


AN  ACT CONCERNING SIMPLIFICATION, ENFORCEMENT AND
MINOR CHANGES TO VARIOUS TAX STATUTES.


    Be it enacted  by  the  Senate  and  House  of
Representatives in General Assembly convened:
    Section  1.  Section   12-15  of  the  general
statutes, as amended  by  section  6 of public act
97-165, section 4  of public act 97-193, section 1
of public act  97-200  and section 4 of public act
97-243,  is  repealed   and   the   following   is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 OR  INSPECT  any  return  or return
information, except as  [hereinafter]  provided IN
THIS SECTION.
    (b) The commissioner  may disclose (1) returns
or  return  information   to   (A)  an  authorized
representative of 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, OR (B) AN AUTHORIZED
REPRESENTATIVE  OF AN  AGENCY  OR  OFFICE  OF  THE
UNITED STATES, 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  FEDERAL  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  OR  FEDERAL law, AS THE CASE
MAY BE, in a form which can be associated with, or
otherwise  identify,  directly  or  indirectly,  a
particular  taxpayer except  that  the  names  and
addresses of jurors  or  potential  jurors and the
fact that the  names were derived from the list of
taxpayers pursuant to chapter 884 may be disclosed
by the judicial  branch;  (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 OR AN
AUTHORIZED REPRESENTATIVE OF  the  chief executive
officer 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
OR  AN  AUTHORIZED  REPRESENTATIVE  OF  the  chief
executive officer of a Connecticut municipality to
which  the information  relates;  (9)  estate  tax
returns and estate  tax  return information to the
Probate Court Administrator  or  to  the  court of
probate for the  district  within which a decedent
resided at the  date of his death, or within which
the commissioner contends  that a decedent resided
at the date  of his death or, if a decedent died a
nonresident of this state, in the court of probate
for  the district  within  which  real  estate  or
tangible  personal property  of  the  decedent  is
situated,  or  within   which   the   commissioner
contends that real  estate  or  tangible  personal
property of the decedent is situated; (10) 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; [and]
(11) return information to the Jury Administrator,
when the information  disclosed  is limited to the
names, addresses, federal  Social Security numbers
and dates of  birth, if available, of residents of
this  state, as  defined  in  subdivision  (1)  of
subsection (a) of section 12-701, AS AMENDED; (12)
PURSUANT   TO   REGULATIONS    ADOPTED    BY   THE
COMMISSIONER, RETURNS OR RETURN INFORMATION TO ANY
PERSON TO THE  EXTENT NECESSARY IN CONNECTION WITH
THE   PROCESSING,   STORAGE,    TRANSMISSION    OR
REPRODUCTION   OF   SUCH    RETURNS    OR   RETURN
INFORMATION,  AND  THE  PROGRAMMING,  MAINTENANCE,
REPAIR, TESTING OR  PROCUREMENT  OF  EQUIPMENT, OR
THE PROVIDING OF  OTHER  SERVICES, FOR PURPOSES OF
TAX  ADMINISTRATION;  AND   (13)  WITHOUT  WRITTEN
REQUEST AND UNLESS  HE  DETERMINES THAT DISCLOSURE
WOULD  IDENTIFY  A   CONFIDENTIAL   INFORMANT   OR
SERIOUSLY  IMPAIR  A   CIVIL   OR   CRIMINAL   TAX
INVESTIGATION,  RETURNS  AND   RETURN  INFORMATION
WHICH MAY CONSTITUTE  EVIDENCE  OF  A VIOLATION OF
ANY CIVIL OR  CRIMINAL  LAW  OF  THIS STATE OR THE
UNITED STATES TO  THE  EXTENT NECESSARY TO APPRISE
THE HEAD OF SUCH AGENCY OR OFFICE CHARGED WITH THE
RESPONSIBILITY OF ENFORCING  SUCH  LAW,  IN  WHICH
EVENT  THE HEAD  OF  SUCH  AGENCY  OR  OFFICE  MAY
DISCLOSE SUCH RETURN  INFORMATION  TO OFFICERS AND
EMPLOYEES OF SUCH  AGENCY  OR OFFICE TO THE EXTENT
NECESSARY TO ENFORCE  SUCH  LAW.  [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.]
    [(b)   Notwithstanding   the   provisions   of
subsection  (a)  of  this  section  or  any  other
provision of the general statutes, any]
    (c) ANY federal  returns or return information
made available to  the  commissioner in accordance
with a written  agreement between the commissioner
and  the  Internal   Revenue   Service  concerning
exchange  of information  for  tax  administration
purposes, shall not  be  open  to inspection by or
disclosed to any  individual  or  disclosed in any
manner  other  than   as   permitted   under   the
provisions of Section 6103 of the Internal Revenue
Code  of 1986,  or  any  subsequent  corresponding
internal revenue code  of  the  United  States, as
from time to time amended.
    [(c)   Notwithstanding   the   provisions   of
subsection (a) of this section, the]
    (d) THE commissioner  may  [(1)] upon request,
verify  whether or  not  any  license,  permit  or
certificate required under  the provisions of this
title  to  be  conspicuously  displayed  has  been
issued by him  to  any  particular  person. [; (2)
pursuant  to  regulations   promulgated   by  him,
disclose  returns or  return  information  to  any
person to the  extent necessary in connection with
the   processing,   storage,    transmission,   or
reproduction   of   such    returns    or   return
information,  and  the  programming,  maintenance,
repair, testing, or  procurement  of equipment, or
the providing of  other  services, for purposes of
tax  administration;  (3)   refuse   to   open  to
inspection or disclose  to  any person any returns
or  return  information   made  available  to  the
commissioner by any  tax officer of another state,
a Canadian province  or  political  subdivision of
such other state or province or of the District of
Columbia or by  any  officer  of the United States
Treasury   Department   or   the   United   States
Department  of  Health   and   Human  Services  in
accordance with a  written  agreement between this
state and such  other  state,  province, political
subdivision,   the   District   of   Columbia   or
department, respectively, which agreement provides
that the disclosure  of  such  returns  or  return
information by the commissioner is prohibited; (4)
without written request  and  unless he determines
that  disclosure  would  identify  a  confidential
information  or  seriously   impair   a  civil  or
criminal tax investigation,  disclose  returns and
return information which  may  constitute evidence
of a violation  of  any  civil  or criminal law of
this state or  the  United  States  to  the extent
necessary to apprise  the  head  of such agency or
office   charged  with   the   responsibility   of
enforcing such law,  in  which  event  the head of
such agency or  office  may  disclose  such return
information  to officers  and  employees  of  such
agency  or  office  to  the  extent  necessary  to
enforce such law.]
    [(d)   Notwithstanding   the   provisions   of
subsection (a) of this section, the commissioner]
    (e) THE COMMISSIONER  MAY  REFUSE  TO  OPEN TO
INSPECTION OR DISCLOSE  TO  ANY PERSON ANY RETURNS
OR  RETURN  INFORMATION   MADE  AVAILABLE  TO  THE
COMMISSIONER BY ANY  TAX OFFICER OF ANOTHER STATE,
A CANADIAN PROVINCE  OR  POLITICAL  SUBDIVISION OF
SUCH OTHER STATE OR PROVINCE OR OF THE DISTRICT OF
COLUMBIA OR BY  ANY  OFFICER  OF THE UNITED STATES
TREASURY   DEPARTMENT   OR   THE   UNITED   STATES
DEPARTMENT  OF  HEALTH   AND   HUMAN  SERVICES  IN
ACCORDANCE WITH A  WRITTEN  AGREEMENT BETWEEN THIS
STATE AND SUCH  OTHER  STATE,  PROVINCE, POLITICAL
SUBDIVISION,   THE   DISTRICT   OF   COLUMBIA   OR
DEPARTMENT, RESPECTIVELY, WHICH AGREEMENT PROVIDES
THAT THE DISCLOSURE  OF  SUCH  RETURNS  OR  RETURN
INFORMATION BY THE  COMMISSIONER IS PROHIBITED. IN
ADDITION, HE may  refuse  to open to inspection or
disclosure to any state OR UNITED STATES agency or
office described in  subdivision (1) of subsection
[(a)]  (b) of  this  section,  returns  or  return
information unless such  agency  or  office  shall
have:  (1)  Established  and  maintained,  to  the
satisfaction  of  the  commissioner,  a  permanent
system of standardized records with respect to any
request, the reason for such request, and the date
of  such  request   made  by  or  of  it  and  any
disclosure  OR INSPECTION  of  returns  or  return
information made by  or to it; (2) established and
maintained,   to   the    satisfaction    of   the
commissioner, a secure area or place in which such
returns or return information shall be stored; (3)
restricted,   to   the    satisfaction    of   the
commissioner,  access to  the  returns  or  return
information  only  to   persons  whose  duties  or
responsibilities  require  access   and   to  whom
disclosure may be  made  under  this section OR BY
WHOM INSPECTION MAY  BE  MADE  UNDER THIS SECTION;
(4)  provided  such  other  safeguards  which  the
commissioner    prescribes   as    necessary    or
appropriate to protect  the confidentiality of the
returns or return  information;  (5)  furnished  a
report  to the  commissioner,  at  such  time  and
containing such information  as  the  commissioner
may  prescribe,  which  describes  the  procedures
established and utilized  by such agency or office
for ensuring the  confidentiality  of  returns and
return information required  by  this  subsection;
and (6) upon  completion of use of such returns or
return information, returned  to  the commissioner
such returns or return information, along with any
copies made therefrom,  or  makes  such returns or
return information undisclosable in such manner as
the commissioner may  prescribe  and  furnishes  a
written report to the commissioner identifying the
returns  or  return  information  that  were  made
undisclosable.
    (f)  RETURNS  AND  RETURN  INFORMATION  SHALL,
WITHOUT WRITTEN REQUEST,  BE OPEN TO INSPECTION BY
OR DISCLOSURE TO:  (1)  OFFICERS  AND EMPLOYEES OF
THE DEPARTMENT OF  REVENUE SERVICES WHOSE OFFICIAL
DUTIES REQUIRE SUCH  INSPECTION  OR DISCLOSURE FOR
TAX  ADMINISTRATION  PURPOSES;   (2)  OFFICERS  OR
EMPLOYEES OF AN  AGENCY  OR  OFFICE  IN ACCORDANCE
WITH SUBDIVISION (1)  OR (13) OF SUBSECTION (b) OF
THIS SECTION WHOSE  OFFICIAL  DUTIES  REQUIRE SUCH
INSPECTION; AND (3)  OFFICERS  OR EMPLOYEES OF ANY
PERSON  IN ACCORDANCE  WITH  SUBDIVISION  (12)  OF
SUBSECTION  (b)  OF  THIS  SECTION,  WHOSE  DUTIES
REQUIRE SUCH INSPECTION OR DISCLOSURE.
    (g) 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.
    [(e)] (h) For purposes of this section:
    (1)  "Return" means  any  tax  or  information
return, declaration of  estimated  tax,  claim for
refund, license application,  permit  application,
registration  application  or   other  application
required by, or  provided  for or permitted under,
the provisions of this or any other title which is
filed with the  commissioner  by, on behalf of, or
with respect to  any  person, and any amendment or
supplement    thereto,    including     supporting
schedules,  attachments,  or   lists   which   are
supplemental to, or part of, the return so filed.
    (2) "Return information"  means  a  taxpayer's
identity, the nature,  source,  or  amount  of the
taxpayer's income, payments, receipts, deductions,
exemptions,  credits,  assets,   liabilities,  net
worth, tax liability,  tax  collected or withheld,
tax underreportings, tax  overreportings,  or  tax
payments, whether the  taxpayer's  return  was, is
being, or will  be  examined or subjected to other
investigation or processing,  or  any  other  data
received by, recorded  by,  prepared by, furnished
to, or collected  by the commissioner with respect
to a return  or  with respect to the determination
of  the  existence,   or  possible  existence,  of
liability of any  person  for  any  tax,  penalty,
interest, fine, forfeiture,  or  other imposition,
or offense. "Return  information" does not include
data in a form which cannot be associated with, or
otherwise  identify,  directly  or  indirectly,  a
particular  taxpayer.  Nothing  in  the  preceding
sentence, or in  any other provision of law, shall
be  construed  to   require   the   disclosure  of
standards used or  to be used for the selection of
returns for examination,  or  data  used  or to be
used  for  determining   such   standards  or  the
disclosure  of  the  identity  of  a  confidential
informant, whether or  not a civil or criminal tax
investigation has been undertaken or completed.
    (3) "Disclosure" means the making known to any
person, in any manner whatever, a return or return
information.
    (4) "INSPECTION" MEANS  ANY  EXAMINATION  OF A
RETURN OR RETURN INFORMATION.
    (5)    "TAX    ADMINISTRATION"    MEANS    THE
ADMINISTRATION, MANAGEMENT, CONDUCT, DIRECTION AND
SUPERVISION OF THE  EXECUTION  AND  APPLICATION OF
THE TAX LAWS  OF  THIS  STATE, AND THE DEVELOPMENT
AND FORMULATION OF TAX POLICY RELATING TO EXISTING
OR PROPOSED TAX  LAWS  OF THIS STATE, AND INCLUDES
ASSESSMENT,  COLLECTION, ENFORCEMENT,  LITIGATION,
PUBLICATION  AND STATISTICAL  GATHERING  FUNCTIONS
UNDER SUCH LAWS.
    Sec.  2.  (NEW)   (a)  For  purposes  of  this
section:
    (1) "Taxpayer" means  any person identified by
a claimant state  to  the  Commissioner of Revenue
Services under this section as owing taxes to such
claimant state, including, in the case of a refund
of any tax imposed upon the income of individuals,
the spouse of  the  taxpayer,  where such taxpayer
filed a joint return with such spouse;
    (2) "Claimant state"  means any other state or
the District of  Columbia  which  extends  a  like
comity for the  collection  of taxes owned to this
state;
    (3) "Taxes" means  any  amount  of tax imposed
under the laws  of  the  claimant state, including
additions to tax for penalties and interest, which
is finally due  and payable to the claimant state,
and with respect  to  which  any administrative or
judicial remedies, or both, have been exhausted or
have  lapsed, and  which  is  legally  enforceable
under the laws  of  the claimant state, whether or
not there is an outstanding judgment for such sum;
    (4) "Refund" means  any  taxpayer's  claim  to
repayment of an overpayment of a tax determined by
this state to  be  owed  to  the  taxpayer by this
state; and
    (5) "Tax officer"  means a unit or official of
a claimant state,  or the duly authorized agent of
such   unit  or   official,   charged   with   the
imposition, assessment or  collection  of taxes of
that state.
    (b) (1) Upon  the request and certification of
the  tax  officer  of  a  claimant  state  to  the
Commissioner of Revenue  Services  that a taxpayer
owes   taxes   to   such   claimant   state,   the
commissioner may withhold  all or a portion of any
refund to which  such  taxpayer would otherwise be
entitled and pay  over such withheld amount to the
claimant state in  accordance  with the provisions
of  this  section.   The  commissioner  shall  not
withhold a refund  unless the laws of the claimant
state allow the  Commissioner  of Revenue Services
to certify that  a  taxpayer  owes  taxes  to this
state  and to  request  the  tax  officer  of  the
claimant state to withhold all or a portion of any
refund to which  such  taxpayer would otherwise be
entitled, and provide for the payment over of such
withheld amount to this state.
    (2) Such certification  shall include the full
name and address  of  the taxpayer; the taxpayer's
Social  Security  number   or   federal   employer
identification number; the amount of taxes owed to
such state, including  a  detailed  statement  for
each  taxable period  showing  tax,  interest  and
penalty; and a  statement  that any administrative
or judicial remedies, or both, have been exhausted
or have lapsed  and  that  the  amount of taxes is
legally enforceable under the laws of such state.
    (3) Upon receipt  by  the  commissioner of the
required  certification,  he   shall   notify  the
taxpayer that he  has  received a request from the
claimant state to withhold all or a portion of any
refund, that the taxpayer has the right to protest
the withholding of  the  refund,  that  failure to
file a protest  in accordance with subdivision (4)
of this subsection  shall  constitute  a waiver of
any demand against  this  state on account of such
withheld amount and  the  withheld  amount will be
paid over to  the claimant state. The notice shall
include a copy  of  the  certification  by the tax
officer of such  claimant state. Thirty days after
the date on  which  it  is  mailed, a notice under
this subdivision shall  be  final  except only for
such amounts as  to  which the taxpayer has filed,
as provided in subdivision (4) of this subsection,
a written protest with the Commissioner of Revenue
Services.
    (4) Any taxpayer  notified  in accordance with
subdivision (3) of  this  subsection  may,  on  or
before the thirtieth day after the mailing of such
notice by the  Commissioner  of  Revenue Services,
protest the withholding  of  all or a portion of a
refund by filing  with  the commissioner a written
protest in which  the taxpayer shall set forth the
grounds on which the protest is based. If a timely
protest is filed,  the  commissioner shall impound
the claimed amount  of  the  refund,  pay  to  the
taxpayer the unclaimed  amount,  if  any,  of  the
refund, send a copy of the protest to the claimant
state for determination  of  the  protest  on  its
merits in accordance  with the laws of that state,
and pay over  to the taxpayer the impounded amount
if the claimant  state shall fail on or before the
forty-fifth day after  the  sending of the copy of
the protest by  the  commissioner to such claimant
state to recertify  to  the  commissioner that the
claimant state has  reviewed the stated grounds on
which the protest  is  based, and to recertify the
amount of taxes  which  is finally due and payable
to   the  claimant   state,   which   is   legally
enforceable under the  laws  of the claimant state
against the taxpayer,  and  with  respect to which
any administrative or  judicial remedies, or both,
have been exhausted or have lapsed.
    (5) Where the  amount  withheld  in accordance
with  this subsection  is  a  refund  of  any  tax
imposed upon the  income  of  individuals  and  in
connection with which  the  taxpayer filed a joint
return with his  or  her spouse, and the spouse is
not a taxpayer, the spouse shall have the right to
be paid his  or  her  portion  of  the  refund  by
establishing his or  her share of such refund. The
amount of such spouse's share of such refund shall
be established by  recomputing  the spouse's share
of the joint liability and subtracting that amount
from the taxpayer's  contribution toward the joint
liability, provided the  amount of the overpayment
refunded to the spouse shall not exceed the amount
of the joint overpayment.
    (6) Subject to  the provisions of subdivisions
(3),  (4)  and   (5)   of   this  subsection,  the
commissioner shall pay  over to the claimant state
the  entire  amount   withheld   or   the   amount
certified, whichever is  less;  pay  any refund in
excess of the  certified  amount  to the taxpayer;
and, if the  amount  certified  exceeds the amount
withheld, withhold amounts from subsequent refunds
due to the  taxpayer,  provided the claimant state
agrees  to  withhold  subsequent  refunds  due  to
taxpayers certified to  the  claimant state by the
commissioner.
    (c) The commissioner may enter into agreements
with the tax  officers of claimant states relating
to procedures and  methods  to  be  employed  by a
claimant state with  respect  to  the operation of
this section; safeguards against the disclosure or
inappropriate   use  of   any   information   that
identifies, directly or  indirectly,  a particular
taxpayer obtained or  maintained  pursuant to this
subsection; and a  minimum amount of taxes owed by
a taxpayer to  a  claimant  state,  so  that, if a
taxpayer  owes  less  than  such  amount  to  such
claimant state, the  claimant state will not avail
itself of the  provisions  of  this  section  with
respect to that taxpayer.
    (d) The collection  procedures  prescribed  by
this  section  shall   not   be   construed  as  a
substitute for any  other  remedy available by law
to the Commissioner of Revenue Services.
    Sec. 3. Subsections  (a)  and  (b)  of section
12-39m of the  general  statutes  are repealed and
the following is substituted in lieu thereof:
    (a) A taxpayer, objecting to the assessment of
any tax due  the state or interest thereon, may at
any  time  ON   OR   BEFORE  THE  MAKING  OF  SUCH
ASSESSMENT BUT prior  to  the  expiration  of  the
later of (1)  the  time period for contesting such
tax, or (2)  the entry of an order by the Superior
Court upholding such assessment, make a remittance
that is designated  in writing as a deposit in the
nature of a  cash  bond. Such remittance shall not
be deemed to  be  a  concession by the taxpayer of
the liability therefor  and  shall not diminish or
abrogate  the  taxpayer's  right  to  contest  the
applicability of the  tax,  interest  or  penalty,
prior  to  the   time   otherwise   available  for
contesting the tax or penalty.
    (b) Notwithstanding the  provisions of section
12-39h, at the time of the application of the cash
bond upon the final resolution of the controversy,
there shall be applied first to the payment of the
tax finally determined  to  be  due so much of the
cash  bond  as   is   represented  by  the  ratio,
determined as of  the  date of receipt of the cash
bond OR THE  DATE  OF THE ASSESSMENT, WHICHEVER IS
LATER, of the  tax  assessed over the total of the
tax assessed and  the  interest accrued as of such
date, and the balance shall be treated as interest
paid on the tax assessed as of such date. Interest
on the outstanding  balance of the tax due and not
deemed  satisfied  by   the  cash  bond  shall  be
determined as if  the  cash bond so applied to the
payment of tax  had  been  a tax payment as of the
date of receipt  of  the  cash bond OR THE DATE OF
THE ASSESSMENT, WHICHEVER  IS LATER, such that the
deposit stops the  further  accrual or compounding
of interest with  respect  to  the  portion of the
assessment deemed paid  as of such [earlier] date.
The balance of  the  cash  bond,  if any, shall be
applied to the  payment of interest as of the date
of receipt of  the  cash  bond,  with  any  excess
applied in accordance with said section 12-39h.
    Sec.  4.  Section   12-205   of   the  general
statutes, as amended  by  section  8 of public act
97-243,  is  repealed   and   the   following   is
substituted in lieu thereof:
    Each domestic insurance company doing business
in this state shall, on or before the first day of
March, annually, render  to  the  Commissioner  of
Revenue Services [,  under  oath or affirmation of
at least one of its principal officers,] an annual
return, on forms  prescribed  or  furnished by the
commissioner AND SIGNED  BY  ONE  OF THE PRINCIPAL
OFFICERS OF SUCH COMPANY, stating specifically the
name  of the  company  and  the  location  of  its
principal office, the  names  and locations of any
subsidiary   domestic   insurance   companies   or
insurance   holding   companies,   the   interest,
dividends,  premiums  and  other  items  of  gross
income received by such company and by each of the
departments  of  such   company  during  the  next
preceding calendar year,  the deductions from such
items of gross income as specified in this chapter
and such other information as the commissioner may
require for the purpose of making any computations
required by this  chapter  and for the enforcement
of this chapter.  The amount of tax reported to be
due on such  return shall be due and payable on or
before said first  day of March. Payments shall be
made in cash  or  by  check,  draft or money order
drawn to the  order of the Commissioner of Revenue
Services. The commissioner  may,  for  good  cause
shown, extend the  time  for making the return and
paying the tax, if a written request is filed with
the commissioner together  with a tentative return
which must be  accompanied by a payment of the tax
reported to be due thereon on or before said first
day of March. Any company to which an extension is
granted  shall  pay,   in  addition  to  the  tax,
interest at the  rate of one per cent per month or
fraction thereof from  the  date  on which the tax
would have been  due  without  the extension until
the date of payment.
    Sec. 5. Subdivision  (22) of subsection (a) of
section 12-213 of the general statutes, as amended
by section 3 of public act 97-295, is repealed and
the following is substituted in lieu thereof:
    (22)  "S corporation"  means  any  corporation
which is an  S  corporation for federal income tax
purposes AND INCLUDES  ANY  SUBSIDIARY  OF  SUCH S
CORPORATION  THAT  IS  A  QUALIFIED  SUBCHAPTER  S
SUBSIDIARY, AS DEFINED IN SECTION 1361(b)(3)(B) OF
THE INTERNAL REVENUE  CODE,  ALL  OF WHOSE ASSETS,
LIABILITIES AND ITEMS  OF  INCOME,  DEDUCTION  AND
CREDIT  ARE TREATED  UNDER  THE  INTERNAL  REVENUE
CODE, AND SHALL  BE TREATED UNDER THIS CHAPTER, AS
ASSETS, LIABILITIES AND  SUCH  ITEMS,  AS THE CASE
MAY BE, OF SUCH S CORPORATION.
    Sec. 6. Subdivision  (2)  of subsection (a) of
section 12-214 of the general statutes is repealed
and the following is substituted in lieu thereof:
    (2) The following  companies  shall  be exempt
from  the tax  imposed  under  this  chapter:  (A)
Insurance  companies  incorporated   or  organized
under the laws  of  any  other  state  or  foreign
government, (B) companies  exempt  by  the federal
corporation net income  tax  law,  and any company
which qualifies as  a domestic international sales
corporation (DISC), as  defined  in Section 992 of
the  Internal  Revenue   Code   of  1986,  or  any
subsequent corresponding internal  revenue code of
the United States,  as  from time to time amended,
and as to  which a valid election under subsection
(b) of said Section 992 to be treated as a DISC is
effective, but excluding companies, other than any
company which so qualifies as, and so elects to be
treated as, a  DISC, which elect not to be subject
to such tax  under  any provision of said Internal
Revenue Code other  than  said  subsection  (b) of
Section  992;  (C)   companies  subject  to  gross
earnings taxes under  chapter  210;  (D) companies
all of whose properties in this state are operated
by companies subject to gross earnings taxes under
chapter 210; (E) cooperative housing corporations,
as defined for  federal  income  tax purposes; (F)
any organization or  association  of  two  or more
persons established and operated for the exclusive
purpose of promoting  the success or defeat of any
candidate for public  office  or  of any political
party or question  or  constitutional amendment to
be voted upon at any state or national election or
for any other  political  purpose; (G) any company
which is not  owned  or  controlled,  directly  or
indirectly, by any other company, the gross annual
revenues of which  in  the most recently completed
year did not  exceed  one  hundred million dollars
and  which  engaged   in   the  research,  design,
manufacture, sale or  installation  of alternative
energy systems or  motor vehicles powered in whole
or in part  by  electricity,  natural gas or solar
energy  including  their   parts  and  components,
provided at least  seventy-five  per  cent  of the
gross annual revenues  of such company are derived
from such research,  design,  manufacture, sale or
installation; [and] (H)  any company which engages
in the research,  design,  manufacture  or sale in
Connecticut of aero-derived gas turbine systems in
advanced     industrial    applications,     which
applications are developed  after October 1, 1992,
which are limited  to  simply-cycle systems, humid
air, steam or  water  injection,  recuperation  or
intercooling technologies, including  their  parts
and components, to  the extent that such company's
net  income  is   directly  attributable  to  such
purposes; (I) ANY  NONUNITED  STATES  CORPORATION,
WHICH SHALL BE ANY FOREIGN CORPORATION, AS DEFINED
IN  SECTION 7701(a)(5)  OF  THE  INTERNAL  REVENUE
CODE, WHOSE SOLE ACTIVITY IN THIS STATE DURING THE
INCOME YEAR CONSISTS  OF  THE TRADING IN STOCKS OR
SECURITIES FOR SUCH  CORPORATION'S OWN ACCOUNT, AS
DEFINED  IN  SECTION   864(b)(2)(A)(ii)   OF  SAID
INTERNAL REVENUE CODE;  AND  (J)  FOR INCOME YEARS
COMMENCING  ON  OR   AFTER   JANUARY  1,  2001,  S
CORPORATIONS.
    Sec. 7. Section 12-222 of the general statutes
is repealed and  the  following  is substituted in
lieu thereof:
    (a) Each company  subject  to  the tax imposed
under this part  shall  render to the commissioner
an annual return,  signed  by one of its principal
officers, on forms  prescribed or furnished by the
commissioner, stating specifically the name of the
company and the  location of its principal office,
the  state  where   organized   and  the  date  of
organization,  the  names  and  locations  of  all
subsidiaries, the amount  of  its  paid-up capital
and surplus at  the  end  of  the income year, the
amount of its  undivided  profits  and reserves at
the  end of  such  year,  the  par  value  of  all
indebtedness at the end of such year, the items of
gross  income  received   during  such  year,  the
deductions  permitted by  law,  the  interest  and
rental payments during  such  year,  the  dividend
payments  and  changes  in  capital,  surplus  and
undivided  profits  during   such  year,  complete
balance sheets at  the  beginning  and end of such
year  or  period  and  such  other  facts  as  the
commissioner may require for the purpose of making
any computation required by this part.
    (b) Such return  shall be due on or before the
first day of  the fourth month next succeeding the
end of the  income  year,  OR, IN THE CASE OF AN S
CORPORATION, ON OR BEFORE THE FIFTEENTH DAY OF THE
FOURTH MONTH NEXT SUCCEEDING THE END OF THE INCOME
YEAR.
    (c) The commissioner  may  grant  a reasonable
extension of time  for  filing a completed return,
if  the  company  files  a  tentative  return  and
application for extension of time in which to file
a  completed  return,   on   forms   furnished  or
prescribed by the  commissioner,  on or before the
first day of  the fourth month next succeeding the
end of the  income  year,  OR, IN THE CASE OF AN S
CORPORATION, ON OR BEFORE THE FIFTEENTH DAY OF THE
FOURTH MONTH NEXT SUCCEEDING THE END OF THE INCOME
YEAR.
    (d) In any  case  in  which  the  commissioner
believes that it  would  be advantageous to him in
the computation of  the  tax  as  imposed  by this
part, such state  return shall be accompanied by a
true copy of  the  last income tax return, if any,
made to the Internal Revenue Service.
    (e) The amount  of  tax  reported to be due on
such return or  tentative  return shall be due and
payable on or  before  the first day of the fourth
month next succeeding  the end of the income year,
OR, IN THE  CASE OF AN S CORPORATION, ON OR BEFORE
THE  FIFTEENTH  DAY   OF  THE  FOURTH  MONTH  NEXT
SUCCEEDING THE END OF THE INCOME YEAR.
    (f) Payment shall be made in cash or by check,
draft or money  order  drawn  to  the order of the
Commissioner of Revenue Services.
    Sec.  8.  Section   12-223a   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(1)]  (a)  Any   taxpayer   included   in   a
consolidated  return  with   one   or  more  other
corporations for federal  income  tax purposes may
elect to file a combined return under this chapter
together with such  other companies subject to the
tax imposed thereunder  as  are  included  in  the
federal consolidated corporation income tax return
and such combined  return  shall  be filed in such
form and setting  forth  such  information  as the
Commissioner  of  Revenue  Services  may  require.
Notice  of  an   election  made  pursuant  to  the
provisions of this  subsection and consent to such
election must be  submitted in written form to the
Commissioner   of   Revenue   Services   by   each
corporation so electing  not  later  than  the due
date, [of] OR  IF AN EXTENSION OF TIME TO FILE HAS
BEEN REQUESTED AND  GRANTED, THE EXTENDED DUE DATE
OF THE returns  due from the electing corporations
for the initial income year for which the election
to file a  combined  return is made. SUCH ELECTION
SHALL BE IN  EFFECT  FOR  SUCH INITIAL INCOME YEAR
AND FOR EACH  SUCCEEDING  INCOME  YEARS UNLESS AND
UNTIL SUCH ELECTION  IS REVOKED IN ACCORDANCE WITH
THE PROVISIONS OF SUBSECTION (d) OF THIS SECTION.
    [(2)]  (b)  Any   taxpayer,   other   than   a
corporation filing a  combined  return with one or
more other corporations under subsection [(1)] (a)
of this section,  which  owns  or  controls either
directly  or  indirectly   substantially  all  the
capital stock of  one  or  more  corporations,  or
substantially all the  capital  stock  of which is
owned or controlled  either directly or indirectly
by one or  more other corporations or by interests
which own or control either directly or indirectly
substantially all the capital stock of one or more
other corporations, may,  in the discretion of the
Commissioner of Revenue  Services,  be required or
permitted by written  approval of the Commissioner
of Revenue Services to make a return on a combined
basis covering any  such  other  corporations  and
setting forth such information as the Commissioner
of  Revenue  Services  may  require,  provided  no
combined return covering  any  corporation  not [a
taxpayer] SUBJECT TO  TAX UNDER THIS CHAPTER shall
be required unless  the  Commissioner  of  Revenue
Services deems such a return necessary, because of
intercompany  transactions  or   some   agreement,
understanding, arrangement or transaction referred
to  in  section  12-226a,  in  order  properly  to
reflect the tax liability under this part.
    [(3)]  (c) (1)  In  the  case  of  a  combined
return, the tax  shall  be  measured by the sum of
the  separate  net   income   or   loss   of  each
corporation included or  the  minimum  tax base of
the included corporations  but  only to the extent
that said income,  loss or minimum tax base of any
included corporation is  separately apportioned to
Connecticut in accordance  with  the provisions of
section 12-218, AS  AMENDED,  12-219a  or  12-244,
whichever is applicable.  In  computing  said  net
income or loss,  intercorporate dividends shall be
eliminated,   and  in   computing   the   combined
additional tax base,  intercorporate stockholdings
shall be eliminated.
    (2) If the  method of determining the combined
measure  of  such  tax  in  accordance  with  this
subsection for two  or  more  affiliated companies
validly electing to  file  a combined return under
the provisions of  subsection  [(1)]  (a)  of this
section is deemed  by  such  companies to unfairly
attribute  an  undue  proportion  of  their  total
income or minimum  tax  base  to  this state, said
companies may submit  a petition in writing to the
Commissioner of Revenue  Services  for approval of
an alternate method  of  determining  the combined
measure of their  tax  not  later  than sixty days
prior to the  due  date  of the combined return to
which the petition  applies  and said commissioner
shall grant or  deny such approval before said due
date. In deciding  whether  or  not  the companies
included in such combined return should be granted
approval to employ  the  alternate method proposed
in  such petition,  the  Commissioner  of  Revenue
Services shall consider approval only in the event
that the petitioners  have  clearly established to
the satisfaction of said commissioner that all the
companies included in such combined return are, in
substance, parts of  a unitary business engaged in
a  single business  enterprise  and  further  that
there  are  substantial   intercorporate  business
transactions among such included companies.
    (3) Upon the filing of a combined return under
[subsections (1) and (2)] SUBSECTION (a) OR (b) of
this section, combined  returns shall be filed for
all succeeding income  years  or periods for those
corporations reporting therein,  provided,  IN THE
CASE OF CORPORATIONS  FILING  UNDER SUBSECTION (a)
OF THIS SECTION, such corporations are included in
a  federal  consolidated  corporation  income  tax
return filed for  the succeeding income years and,
in  the  case   of   a  corporation  filing  under
subsection  [(2)]  (b)   OF   THIS   SECTION,  the
aforesaid ownership or  control  continues in full
force and effect  and  is  not  extended  to other
corporations, and further, provided no substantial
change is made  in  the nature or locations of the
operations of such corporations.
    [(4)] (d) Notwithstanding  the  provisions  of
subsections  [(1)]  (a)  and  [(3)]  (c)  of  this
section, any taxpayer  which has elected to file a
combined return under  this chapter as provided in
said subsection [(1)] (a), may subsequently REVOKE
ITS  ELECTION  TO   FILE  A  COMBINED  CORPORATION
BUSINESS TAX RETURN  AND  elect to file a separate
corporation  business  tax   return   under   this
chapter, although continuing  to  be included in a
federal consolidated corporation income tax return
with other companies  subject  to  tax  under this
chapter, provided [notice  of  intent to file such
separate return is  filed with the Commissioner of
Revenue Services prior  to  the  beginning  of the
income year with  respect  to  which such taxpayer
elects to file  such separate return and all other
companies included in  such  combined return under
this chapter also  elect to file separate returns,
and provided further,  such  notice  of intent may
not be revoked subsequent to the beginning of such
income year] SUCH  ELECTION SHALL NOT BE EFFECTIVE
BEFORE THE FIFTH INCOME YEAR IMMEDIATELY FOLLOWING
THE INITIAL INCOME  YEAR  IN WHICH THE CORPORATION
ELECTED  TO FILE  A  COMBINED  RETURN  UNDER  THIS
CHAPTER. NOTICE OF  AN  ELECTION  MADE PURSUANT TO
THE PROVISIONS OF  THIS  SUBSECTION AND CONSENT TO
SUCH ELECTION MUST BE SUBMITTED IN WRITTEN FORM TO
THE  COMMISSIONER  OF  REVENUE  SERVICES  BY  EACH
CORPORATION  THAT  HAD   BEEN   INCLUDED  IN  SUCH
COMBINED RETURN NOT LATER THAN THE DUE DATE, OR IF
AN EXTENSION OF  TIME  TO  FILE HAS BEEN REQUESTED
AND GRANTED, EXTENDED  DUE  DATE  OF  THE SEPARATE
RETURNS DUE FROM THE ELECTING CORPORATIONS FOR THE
INITIAL INCOME YEAR FOR WHICH THE ELECTION TO FILE
SEPARATE RETURNS IS  MADE.  THE  ELECTION  TO FILE
SEPARATE  RETURNS SHALL  BE  IRREVOCABLE  FOR  AND
APPLICABLE FOR FIVE SUCCESSIVE INCOME YEARS.
    Sec.  9.  Section   12-242d   of  the  general
statutes, as amended  by  section  1 of public act
97-163,  is  repealed   and   the   following   is
substituted in lieu thereof:
    (a) For purposes  of this section, there shall
be four required instalments for each income year.
The due date  for the first required instalment is
the fifteenth day of the third month of the income
year.  The  due   date  for  the  second  required
instalment is the fifteenth day of the sixth month
of the income  year.  The  due  date for the third
required instalment is  the  fifteenth  day of the
ninth month of  the  income year. The due date for
the fourth required  instalment  is  the fifteenth
day of the twelfth month of the income year.
    (b)  The  amount   of   the   first   required
instalment  shall  be   thirty  per  cent  of  the
required annual payment,  as defined in subsection
(e) of this  section.  The  amount  of  the second
required instalment shall be forty per cent of the
required annual payment,  as defined in subsection
(e) of this  section.  The  amount  of  the  third
required instalment shall  be  ten per cent of the
required annual payment,  as defined in subsection
(e) of this  section.  The  amount  of  the fourth
required instalment shall  be  twenty  per cent of
the  required  annual   payment,   as  defined  in
subsection (e) of this section.
    (c)  Except  as  otherwise  provided  in  this
section,  in  the  case  of  any  underpayment  of
estimated tax by  a  company, there shall be added
to  the  tax  an  amount  determined  by  applying
interest (1) at the rate of one per cent per month
or fraction thereof,  (2)  to  the  amount  of the
underpayment,   (3)  for   the   period   of   the
underpayment.
    (d) For purposes  of  this section, the amount
of the underpayment  shall  be  the  excess of the
required instalment, over  the  amount, if any, of
the instalment paid  on or before the due date for
the instalment. The  period  of  the  underpayment
shall run from  the due date for the instalment to
whichever of the  following  dates is earlier: (1)
The first day  of  the  fourth  month  of the next
succeeding income year, or (2) with respect to any
portion of the  underpayment,  the  date  on which
such  portion  is   paid.  For  purposes  of  this
subsection, a payment  of  estimated  tax shall be
credited against unpaid  required  instalments  in
the order in  which  such instalments are required
to be paid.
    (e)  [(1)  Except  as  otherwise  provided  in
subdivision  (2)  of  this  subsection,  "required
annual payment"] "REQUIRED  ANNUAL  PAYMENT" means
the lesser of [(A)] (1) ninety per cent of the tax
shown on the return for the income year, or, if no
return is filed,  ninety  per  cent of the tax for
such year, or  [(B) for the income year commencing
in 1996, two  hundred per cent of the tax shown on
the return for  the  next  preceding  income  year
without regard to  any  credit under this chapter;
for  the  income  year  commencing  in  1997,  one
hundred fifty per  cent  of  the  tax shown on the
return for the  next preceding income year without
regard to any  credit  under this chapter; for the
income year commencing  in  1998,  and thereafter]
(2) IF THE  PRECEDING  INCOME  YEAR  WAS AN INCOME
YEAR OF TWELVE  MONTHS  AND IF THE COMPANY FILED A
RETURN FOR THE  PRECEDING  INCOME  YEAR  SHOWING A
LIABILITY FOR TAX, one hundred per cent of the tax
shown on the  return for the next preceding income
year  without regard  to  any  credit  under  this
chapter.
    [(2) Any credit  that  may  otherwise be taken
under  section 12-217n  shall  be  disregarded  in
determining  the tax  due  for  any  income  years
commencing prior to January 1, 1997.]
    (f)  (1)  IN   THE   CASE   OF   ANY  REQUIRED
INSTALMENT, IF THE  COMPANY  ESTABLISHES  THAT THE
ANNUALIZED  INCOME INSTALMENT  IS  LESS  THAN  THE
AMOUNT DETERMINED UNDER  SUBSECTION  (b)  OF  THIS
SECTION, THE AMOUNT  OF  SUCH  REQUIRED INSTALMENT
SHALL BE THE  ANNUALIZED  INCOME  INSTALMENT.  ANY
REDUCTION IN A  REQUIRED INSTALMENT RESULTING FROM
THE  APPLICATION  OF   THIS  SUBSECTION  SHALL  BE
RECAPTURED BY INCREASING  THE  AMOUNT  OF THE NEXT
REQUIRED  INSTALMENT  BY   THE   AMOUNT   OF  SUCH
REDUCTION AND BY  INCREASING  SUBSEQUENT  REQUIRED
INSTALMENTS TO THE  EXTENT  THAT THE REDUCTION HAS
NOT   PREVIOUSLY  BEEN   RECAPTURED   UNDER   THIS
SUBDIVISION.
    (2) IN THE  CASE  OF  ANY REQUIRED INSTALMENT,
THE ANNUALIZED INCOME INSTALMENT IS THE EXCESS, IF
ANY, OF (A)  AN  AMOUNT  EQUAL  TO  THE APPLICABLE
PERCENTAGE OF THE TAX FOR THE INCOME YEAR COMPUTED
BY PLACING ON  AN  ANNUALIZED BASIS ITS NET INCOME
OR ITS MINIMUM  TAX  BASE, AS THE CASE MAY BE, FOR
MONTHS IN THE  INCOME  YEAR  ENDING BEFORE THE DUE
DATE FOR THE  INSTALMENT,  OVER  (B) THE AGGREGATE
AMOUNT OF ANY  PRIOR  REQUIRED INSTALMENTS FOR THE
TAXABLE YEAR.
    (3)  FOR  PURPOSES  OF  THIS  SUBSECTION,  THE
APPLICABLE  PERCENTAGE  FOR   THE  FIRST  REQUIRED
INSTALMENT   IS   TWENTY-SEVEN,   THE   APPLICABLE
PERCENTAGE FOR THE  SECOND  REQUIRED INSTALMENT IS
SIXTY-THREE,  THE APPLICABLE  PERCENTAGE  FOR  THE
THIRD REQUIRED INSTALMENT  IS  SEVENTY-TWO AND THE
APPLICABLE  PERCENTAGE  FOR  THE  FOURTH  REQUIRED
INSTALMENT IS NINETY.
    [(f)] (g) The  application  of this section to
income years of  less  than twelve months shall be
in  accordance with  regulations  adopted  by  the
commissioner.
    [(g)] (h) No  addition to tax shall be imposed
under  subsection (c)  of  this  section  for  any
income year if  the  tax  shown  on the return for
such income year,  or,  if no return is filed, the
tax, is one thousand dollars or less.
    Sec.  10. (NEW)  (a)  Whenever  a  company  is
eligible  to  claim   more  than  one  corporation
business tax credit,  the credits shall be claimed
for the income  year  in  the following order: (1)
Any credit that  may  be  carried  backward  to  a
preceding income year  or  years  shall  first  be
claimed (A) with  any  credit  carryback that will
expire  first  being  claimed  before  any  credit
carryback  that will  expire  later  or  will  not
expire at all,  and  (B)  if the credit carrybacks
will expire at  the  same  time,  in  the order in
which the company may receive the maximum benefit;
(2) any credit that may not be carried backward to
a preceding income  year or years and that may not
be carried forward  to a succeeding income year or
years shall next be claimed, in the order in which
the company may  receive  the maximum benefit; and
(3) any credit  that  may  be carried forward to a
succeeding income year  or  years  shall  next  be
claimed (A) with any credit carryforward that will
expire  first  being  claimed  before  any  credit
carryforward that will  expire  later  or will not
expire at all, and (B) if the credit carryforwards
will expire at  the  same  time,  in  the order in
which the company may receive the maximum benefit.
    (b) In no  event  shall  any credit be claimed
more than once.
    Sec.  11.  Section   12-250   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    "Authorized agent or officer", as used in this
chapter,  includes  any   trustee,   mortgagee  or
receiver in possession  of  or  operating any such
railroad in the  state, and "net railway operating
income"  means  railway  operating  revenues  less
railway operating expenses,  railway  tax accruals
and uncollectible railway  revenue,  including  in
the computation thereof debits and credits arising
from equipment rents  and  joint  facility  rents.
Each such corporation,  on or before the first day
of July in  each  year, shall make a return to the
Commissioner of Revenue  Services, in such form as
the commissioner may  prescribe  [, under the oath
of] AND SIGNED  BY  its treasurer or an authorized
agent or officer, specifying: (1) The name of each
railroad operated by  such  corporation during the
year ended the  thirty-first  day of December next
preceding; (2) the number of miles of all railroad
tracks, including yard  tracks,  sidings, branches
and spurs, which were operated by such corporation
at  any  time   during   the   year   ended   said
thirty-first day of  December,  and  the number of
miles  within this  state  of  all  such  railroad
tracks, including yard  tracks,  sidings, branches
and spurs so  operated;  (3)  the  amount of gross
earnings of such corporation from all sources from
its  operation, and  the  amount  of  net  railway
operating income of  such railroad during the year
ended said thirty-first  day  of  December, or the
portion of such  year  that  such  corporation has
carried on business  in  this  state;  AND (4) the
assessed value of  all  real  estate in this state
assessed in the  name of such corporation, or of a
corporation all of  whose  property is operated by
it, with a  specific  list  of  the  same  and the
amount of taxes  paid upon any such real estate in
any town, in  the year ended said thirty-first day
of December.
    Sec.  12.  Section   12-263b  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    There is hereby  imposed on the hospital gross
earnings of each  hospital in this state a tax (1)
at the rate  of  eleven  per  cent of its hospital
gross earnings in each taxable quarter for taxable
quarters commencing prior  to October 1, 1996; (2)
at the rate of nine and one-fourth per cent of its
hospital gross earnings  in  each  taxable quarter
commencing on or  after October 1, 1996, and prior
to October 1,  1997;  (3) at the rate of eight and
one-fourth per cent of its hospital gross earnings
in each taxable  quarter  commencing  on  or after
October 1, 1997, and prior to October 1, 1998; (4)
at the rate  of  seven  and one-fourth per cent of
its  hospital  gross   earnings  in  each  taxable
quarter commencing on  or  after  October 1, 1998,
and prior to  October 1, 1999; AND (5) at the rate
of six and  one-fourth  per  cent  of its hospital
gross earnings in  each taxable quarter commencing
on or after  October 1, 1999. Each hospital shall,
on or before  the last day of January, April, July
and  October  of   each   year,   render   to  the
Commissioner of Revenue  Services  [under  oath or
affirmation  of at  least  one  of  its  principal
officers,]  a  return,   on  forms  prescribed  or
furnished by the  Commissioner of Revenue Services
AND  SIGNED BY  ONE  OF  ITS  PRINCIPAL  OFFICERS,
stating specifically the name and location of such
hospital, and the  amounts  of  its hospital gross
earnings, its net  revenue  and  its gross revenue
for the calendar  quarter  ending  the last day of
the preceding month.  Payment  shall  be made with
such return.
    Sec. 13. Subsection  (b)  of section 12-264 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (b) Each such  company  and  municipal utility
shall, on or  before  the  last  day  of  January,
April, July and  October  of  each year, render to
the Commissioner of  Revenue  Services [under oath
of its treasurer,  or  the  person  performing the
duties of treasurer,  or of an authorized agent or
officer,]  a  return   on   forms   prescribed  or
furnished by the  commissioner  AND  SIGNED BY ITS
TREASURER OR THE  PERSON  PERFORMING THE DUTIES OF
TREASURER, OR BY  AN  AUTHORIZED AGENT OR OFFICER,
specifying  (1) the  name  and  location  of  such
company or municipal  utility,  (2)  the amount of
gross earnings from  operations  for  the  quarter
ending with the  last  day of the preceding month,
(3) the gross  earnings from the sale or rental of
appliances using water,  steam, gas or electricity
and the cost  of  such appliances sold, cost to be
interpreted   as   net    invoice    price    plus
transportation costs of  such  appliances, (4) the
gross earnings from all sales for resale of water,
steam, gas and  electricity,  whether  or  not the
purchasers   are  public   service   corporations,
municipal  utilities,  located  in  the  state  or
subject to the  tax  imposed  by this chapter, (5)
the number of  miles  of water or steam pipes, gas
mains or electric  wires  operated by such company
or municipal utility  within  this  state  on  the
first day and on the last day of the calendar year
immediately preceding, and (6) the number of miles
of water or  steam  pipes,  gas  mains or electric
wires  wherever  operated   by   such  company  or
municipal utility on  said dates. Gas pipeline and
gas   transmission   companies    which   do   not
manufacture or buy gas in this state for resale in
this state shall  be  subject to the provisions of
chapter  208 and  shall  not  be  subject  to  the
provisions of this chapter and chapter 212a.
    Sec.  14.  Section   12-349   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) (1) The  gross  estate  for the purpose of
the tax imposed  by the provisions of this chapter
shall be the total of the fair market value of all
the property transferred  subject to tax under the
provisions of part I, except that the value of any
real property in  the  gross  estate classified as
farm land in  accordance  with  section 12-107c at
the  time  of   the   decedent's  death  shall  be
determined for purposes  of said tax in accordance
with the provisions  applicable  to  farm  land in
section 12-63, provided  [(1)]  (A) such farm land
is transferred to  any  of  the  beneficiaries  or
distributees included in the list of beneficiaries
or distributees in classes AA, A and B as provided
in section 12-344,  [(2)]  (B)  such farm land was
owned by the  decedent or any of the beneficiaries
or distributees in classes AA, A and B as provided
in section 12-344 for an aggregate of no less than
five  years during  the  eight  years  immediately
preceding the decedent's  death, and [(3)] (C) the
decedent or any  such  beneficiary  or distributee
shall  have  engaged  in  active  and  substantial
participation   in   farming    or    agricultural
operations directly related  to such farm land, as
determined by the assessor, for an aggregate of no
less  than  five  years  during  the  eight  years
immediately preceding the decedent's death.
    (2) WHERE REAL PROPERTY CLASSIFIED AT THE TIME
OF THE DECEDENT'S DEATH AS FARM LAND IN ACCORDANCE
WITH SECTION 12-107c  IS  OWNED  BY A PARTNERSHIP,
CORPORATION  OR  TRUST   ENGAGED   IN  FARMING  OR
AGRICULTURAL OPERATIONS, AND,  AT  THE TIME OF THE
DECEDENT'S   DEATH,   (A)   THE   SOLE   PARTNERS,
SHAREHOLDERS OR BENEFICIARIES, AS THE CASE MAY BE,
OF SUCH PARTNERSHIP,  CORPORATION OR TRUST ARE THE
DECEDENT AND ANY  PERSONS  WHO WOULD BE CLASSIFIED
AS TRANSFEREES UNDER  CLASS AA, A OR B AS PROVIDED
IN SECTION 12-344, WHETHER OR NOT SUCH PERSONS ARE
IN  FACT  BENEFICIARIES  OR  DISTRIBUTEES  OF  THE
DECEDENT, AND (B)  ALL  OF THE DECEDENT'S INTEREST
IN SUCH PARTNERSHIP,  CORPORATION  OR TRUST PASSES
TO TRANSFEREES UNDER  CLASS AA, A OR B AS PROVIDED
IN SECTION 12-344,  THE  INTEREST  OF THE DECEDENT
AND OF SUCH BENEFICIARIES AND DISTRIBUTEES IN SUCH
PARTNERSHIP, CORPORATION OR TRUST SHALL BE TREATED
IN THE SAME MANNER FOR PURPOSES OF THIS CHAPTER AS
IF  THE  INTEREST   OF   THE   DECEDENT  AND  SUCH
BENEFICIARIES  AND  DISTRIBUTEES   WAS   IN   REAL
PROPERTY IN THE  GROSS  ESTATE  CLASSIFIED AS FARM
LAND IN ACCORDANCE WITH SECTION 12-107c.
    (b) There shall  be  excluded  from  the gross
estate the value  of  an  annuity or other payment
receivable after the  death of the decedent by any
beneficiary,  other than  the  decedent's  estate,
under an employees'  trust  or  plan,  or  under a
contract purchased by an employees' trust or plan,
forming  part  of   a   pension,  stock  bonus  or
profit-sharing plan, or under a retirement annuity
contract purchased by  an  employer  pursuant to a
plan,  provided  at   the   time   of   decedent's
separation from employment, by death or otherwise,
or at the  time  of  termination  of  the plan, if
earlier, payments to  or in respect of such trust,
plan or annuity  were  exempt  from federal income
taxation under the  United States Internal Revenue
Code. If such  amounts  payable after the death of
the decedent under  a  plan  above  described  are
attributable  to  any   extent   to   payments  or
contributions made by  the  decedent, no exclusion
shall be allowed  for  that  part  of the value of
such amounts in  the  proportion  that  the  total
payments or contributions  made  by  the  decedent
bears to the total payments or contributions made.
For   purposes   of    the   preceding   sentence,
contributions or payments  made  by the decedent's
employer  or  former   employer   shall   not   be
considered to be  contributed  by the decedent, if
made to or  in respect to a trust, plan or annuity
exempt  from federal  income  taxation  under  the
United States Internal Revenue Code.
    (c) There shall  be  excluded  from  the gross
taxable  estate  the   value   of   any   payments
receivable after the  death  of  the  decedent  by
other persons under  the provisions of the Federal
Social Security Act  and  the  Railroad Retirement
Act of 1937,  as  the  same  have  been and may be
amended from time  to  time,  and  with respect to
persons dying on  or after June 8, 1978, the value
of any annuity  payments receivable by an eligible
survivor, upon the  death of a retired serviceman,
under the "Retired  Serviceman's Family Protection
Plan" or the  "Survivor  Benefit Plan" for retired
servicemen as provided  in  Chapter 73 of Title 10
of the United States Code, irrespective of whether
such  annuity payments  are  attributable  to  any
extent to payments  or  contributions  made by the
decedent.
    (d) There shall  be  excluded  from  the gross
taxable  estate  the   value   of   any   payments
receivable after the  death of the decedent by any
beneficiary,  other than  the  decedent's  estate,
under a pension plan for self-employed individuals
as may be  established  pursuant to Section 401(c)
of  the  Internal  Revenue  Code  and  regulations
related  thereto,  and   with   respect  to  which
payments to the  credit  of  such plan were exempt
from federal income tax.
    (e)  (1)  If,  within  ten  years  immediately
following the death of the decedent, real property
in the gross estate of the decedent, classified as
farm land in  accordance  with section 12-107c and
the  value of  which,  for  purposes  of  the  tax
imposed  under this  chapter,  was  determined  in
accordance with provisions applicable to farm land
in section 12-63  as provided in subsection (a) of
this section, is  transferred to anyone other than
a beneficiary or distributee in [classes AA, A and
B] CLASS AA,  A OR B AS PROVIDED in section 12-344
or  is  no  longer  classified  as  farm  land  in
accordance with section  12-107c, such beneficiary
or  distributee  shall   be   liable   for  a  tax
applicable  to  such   transfer   or   change   in
classification. Said tax  shall  be  in  an amount
equal to the  difference between the amount of tax
paid under this  chapter with respect to such farm
land and the  amount  of tax which would have been
paid if such  farm  land had been assessed at fair
market  value  for  purposes  of  determining  the
amount of tax under this chapter, and accordingly,
the succession tax  return  of  the decedent shall
include,  in  such   manner  as  required  by  the
Commissioner of Revenue  Services  for purposes of
this section, a  sworn  statement  as  to the fair
market value of  such  farm  land,  based  on  its
highest and best  use  value,  as  of  the date of
death of the  decedent.  Said tax shall be paid to
the Commissioner of  Revenue Services within sixty
days following the date of such transfer or change
in classification, and  if  not so paid shall bear
interest at the rate of twelve per cent per annum,
commencing at the  expiration  of such sixty days,
until paid. The  Commissioner  of Revenue Services
may, for cause  shown,  on  written application of
the beneficiary or  distributee,  filed  with said
commissioner at or  before  the expiration of such
sixty days, extend  the  time  for payment of said
tax or any part thereof.
    (2) Said tax  imposed  under the provisions of
subdivision (1) of this subsection shall be a lien
in favor of  the  state  of  Connecticut upon such
real property so  valued as farm land for purposes
of determining the gross estate of the decedent as
provided in subsection  (a)  of  this section and,
following the death  of  the decedent, transferred
or changed in  respect  to  use,  resulting  in  a
change in the  classification  of such property as
farm land so  as  to  be subject to said tax, from
the date on  which  such  transfer  or  change  in
classification  becomes effective  until  (A)  the
expiration of ten  years immediately following the
death of the  decedent,  if there has been no such
transfer or change  in  classification during said
period of ten  years or (B) in the event of such a
transfer or change  in classification resulting in
the  imposition  of   tax   as  provided  in  said
subdivision  (1),  payment   of  any  tax  due  in
accordance with this subdivision plus interest and
costs  that  may   accrue   in  addition  thereto,
provided such lien  shall  not be valid as against
any lienor, mortgagee,  judgment  creditor or bona
fide purchaser, when  they  have no notice, unless
and until notice of such lien is filed or recorded
in  the  town   clerk's   office  or  place  where
mortgages, liens and  conveyances of such property
are required by statute to be filed or recorded.
    (3) WHERE REAL PROPERTY CLASSIFIED AT THE TIME
OF THE DECEDENT'S DEATH AS FARM LAND IN ACCORDANCE
WITH SECTION 12-107c  IS  OWNED  BY A PARTNERSHIP,
CORPORATION  OR  TRUST   ENGAGED   IN  FARMING  OR
AGRICULTURAL OPERATIONS, AND,  AT  THE TIME OF THE
DECEDENT'S DEATH, THE  SOLE PARTNERS, SHAREHOLDERS
OR BENEFICIARIES, AS  THE  CASE  MAY  BE,  OF SUCH
PARTNERSHIP,  CORPORATION  OR   TRUST,   ARE   THE
DECEDENT AND ANY  PERSONS  WHO WOULD BE CLASSIFIED
AS TRANSFEREES UNDER  CLASS AA, A OR B AS PROVIDED
IN SECTION 12-344, WHETHER OR NOT SUCH PERSONS ARE
IN  FACT  BENEFICIARIES  OR  DISTRIBUTEES  OF  THE
DECEDENT, ANY TRANSFER  OF  AN  INTEREST  IN  SUCH
PARTNERSHIP, CORPORATION OR  TRUST TO ANYONE OTHER
THAN A BENEFICIARY  OR  DISTRIBUTEE IN CLASS AA, A
OR  B AS  PROVIDED  IN  SECTION  12-344  SHALL  BE
TREATED IN THE  SAME  MANNER  FOR PURPOSES OF THIS
CHAPTER AS A  TRANSFER  OF  REAL  PROPERTY  IN THE
GROSS ESTATE CLASSIFIED AS FARM LAND IN ACCORDANCE
WITH  SECTION  12-107c  TO  ANYONE  OTHER  THAN  A
BENEFICIARY OR DISTRIBUTEE  IN CLASS AA, A OR B AS
PROVIDED IN SECTION  12-344. ANY CHANGE IN THE USE
OF   SUCH  FARM   LAND,   BY   SUCH   PARTNERSHIP,
CORPORATION OR TRUST,  SO  THAT  IT  IS  NO LONGER
CLASSIFIED AS FARM LAND IN ACCORDANCE WITH SECTION
12-107c SHALL BE  TREATED  IN  THE SAME MANNER FOR
PURPOSES OF THIS CHAPTER AS A CHANGE IN THE USE OF
REAL PROPERTY IN  THE  GROSS  ESTATE CLASSIFIED AS
FARM LAND IN  ACCORDANCE  WITH SECTION 12-107c, BY
THE DECEDENT'S BENEFICIARIES  OR  DISTRIBUTEES  IN
CLASS AA, A OR B AS PROVIDED IN SECTION 12-344, SO
THAT IT IS NO LONGER SO CLASSIFIED.
    Sec. 15. Subsection  (12) of section 12-407 of
the general statutes,  as amended by section 14 of
public act 97-243,  is  repealed and the following
is substituted in lieu thereof:
    (12)  "Retailer" includes:  (A)  Every  person
engaged in the  business of making sales at retail
or in the  business  of  making  retail  sales  at
auction of tangible personal property owned by the
person or others;  (B) every person engaged in the
business of making sales for storage, use or other
consumption or in  the business of making sales at
auction of tangible personal property owned by the
person  or  others   for  storage,  use  or  other
consumption;  (C) every  operator  as  defined  in
subsection (18) of  this section; (D) every seller
rendering any service  described in subsection (2)
of this section;  (E)  every person under whom any
salesman,  representative,  peddler  or  canvasser
operates  in  this   state,   or  from  whom  such
salesman,  representative,  peddler  or  canvasser
obtains the tangible  personal  property  that  is
sold; (F) every  person  with whose assistance any
seller is enabled  to  solicit  orders within this
state; (G) every  person  making retail sales from
outside this state  to  a  destination within this
state and not  maintaining  a place of business in
this state who  engages  in  regular or systematic
solicitation  of  sales   of   tangible   personal
property in this  state  (i)  by  the  display  of
advertisements  on  billboards  or  other  outdoor
advertising   in   this   state,   (ii)   by   the
distribution of catalogs, periodicals, advertising
flyers or other  advertising  by  means  of print,
radio  or television  media,  or  (iii)  by  mail,
telegraphy, telephone, computer  data base, cable,
optic, microwave or  other  communication  system,
for  the purpose  of  effecting  retail  sales  of
tangible personal property,  provided  such person
has made one  hundred  or  more  retail sales from
outside this state  to  destinations  within  this
state during the  twelve-month period ended on the
September  thirtieth  immediately   preceding  the
monthly or quarterly  period with respect to which
such person's liability for tax under this chapter
is determined; (H) any person owned or controlled,
either  directly  or  indirectly,  by  a  retailer
engaged in business  in  this  state  which is the
same as or  similar  to  the  line  of business in
which  such  person  so  owned  or  controlled  is
engaged;  (I)  any  person  owned  or  controlled,
either  directly  or   indirectly,   by  the  same
interests that own  or control, either directly or
indirectly, a retailer engaged in business in this
state which is  the same as or similar to the line
of business in  which  such  person  so  owned  or
controlled  is engaged;  (J)  any  assignee  of  a
person engaged in the business of leasing tangible
personal property to others, where leased property
of such person  which is subject to taxation under
this chapter is  situated  within  this  state and
such assignee has  a security interest, as defined
in subsection (37)  of  section 42a-1-201, in such
property; AND (K) EVERY PERSON MAKING RETAIL SALES
OF  ITEMS  OF   TANGIBLE  PERSONAL  PROPERTY  FROM
OUTSIDE THIS STATE  TO  A  DESTINATION WITHIN THIS
STATE AND NOT  MAINTAINING  A PLACE OF BUSINESS IN
THIS STATE WHO  REPAIRS  OR  SERVICES  SUCH ITEMS,
UNDER A WARRANTY,  IN  THIS STATE, EITHER DIRECTLY
OR  INDIRECTLY  THROUGH   AN   AGENT,  INDEPENDENT
CONTRACTOR OR SUBSIDIARY.
    Sec. 16. Subsection  (15) of section 12-407 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (15) "Engaged in  business in the state" means
and includes but  shall  not  be  limited  to  the
following acts or methods of transacting business:
(A) Selling in this state, or any activity in this
state in connection  with  selling  in this state,
tangible personal property  for  use,  storage  or
consumption within the  state; (B) engaging in the
transfer for a  consideration  of the occupancy of
any room or  rooms in a hotel or lodging house for
a period of  thirty  consecutive  calendar days or
less; (C) rendering  in  this  state  any  service
described in any of the subdivisions of subsection
(2) of this section; (D) maintaining, occupying or
using,  permanently or  temporarily,  directly  or
indirectly,  through a  subsidiary  or  agent,  by
whatever name called,  of  any  office,  place  of
distribution,  sales  or  sample  room  or  place,
warehouse  or storage  point  or  other  place  of
business  or  having  any  representative,  agent,
salesman, canvasser or solicitor operating in this
state for the  purpose  of  selling, delivering or
taking orders; (E)  notwithstanding  the fact that
retail sales are made from outside this state to a
destination within this  state and that a place of
business is not maintained in this state, engaging
in regular or  systematic solicitation of sales of
tangible personal property  in  this  state (i) by
the display of  advertisements  on  billboards  or
other outdoor advertising  in  this state, (ii) by
the   distribution   of   catalogs,   periodicals,
advertising flyers or  other  advertising by means
of print, radio  or  television media, or (iii) by
mail, telegraphy, telephone,  computer  data base,
cable,  optic, microwave  or  other  communication
system, for the  purpose of effecting retail sales
of  tangible  personal   property,   provided  one
hundred or more  retail  sales  from  outside this
state to destinations  within  this state are made
during  the  twelve-month   period  ended  on  the
September  thirtieth  immediately   preceding  the
monthly or quarterly  period with respect to which
liability   for  tax   under   this   chapter   is
determined; (F) being  owned or controlled, either
directly or indirectly,  by  a retailer engaged in
business in this  state  which  is  the same as or
similar to the  line  of  business  in  which  the
retailer so owned  or  controlled  is engaged; (G)
being  owned or  controlled,  either  directly  or
indirectly, by the  same  interests  that  own  or
control, either directly or indirectly, a retailer
engaged in business  in  this  state  which is the
same as or  similar  to  the  line  of business in
which  the retailer  so  owned  or  controlled  is
engaged;  (H)  being  the  assignee  of  a  person
engaged  in  the   business  of  leasing  tangible
personal property to others, where leased property
of such person  is  situated within this state and
such assignee has  a security interest, as defined
in subsection (37)  of  section 42a-1-201, in such
property; AND (I)  NOTWITHSTANDING  THE  FACT THAT
RETAIL  SALES  OF   ITEMS   OF  TANGIBLE  PERSONAL
PROPERTY ARE MADE  FROM  OUTSIDE  THIS  STATE TO A
DESTINATION WITHIN THIS  STATE AND THAT A PLACE OF
BUSINESS  IS  NOT   MAINTAINED   IN   THIS  STATE,
REPAIRING  OR  SERVICING   SUCH   ITEMS,  UNDER  A
WARRANTY,  IN  THIS   STATE,  EITHER  DIRECTLY  OR
INDIRECTLY   THROUGH   AN    AGENT,    INDEPENDENT
CONTRACTOR  OR  SUBSIDIARY.  A  retailer  who  has
contracted with a  commercial printer for printing
and distribution of  printed material shall not be
deemed to be  engaged  in  business  in this state
because  of  the   ownership  or  leasing  by  the
retailer  of  tangible   or   intangible  personal
property located at the premises of the commercial
printer in this state, the sale by the retailer of
property of any  kind produced or processed at and
shipped or distributed  from  the  premises of the
commercial printer in  this  state, the activities
of  the retailer's  employees  or  agents  at  the
premises of the  commercial printer in this state,
which  activities  relate   to   quality  control,
distribution or printing services performed by the
printer, or the  activities  of any kind performed
by the commercial  printer in this state for or on
behalf of the retailer.
    Sec. 17. Subsection  (1)  of section 12-408 of
the general statutes,  as amended by section 17 of
public act 97-243,  is  repealed and the following
is substituted in lieu thereof:
    (1) For the  privilege  of making any sales as
defined in subsection  (2)  of  section 12-407, AS
AMENDED,  at  retail,   in   this   state   for  a
consideration, a tax  is  hereby  imposed  on  all
retailers at the rate of six per cent of the gross
receipts of any  retailer  from  the  sale  of all
tangible personal property  sold at retail or from
the rendering of  any services constituting a sale
in  accordance  with  subsection  (2)  of  section
12-407, AS AMENDED,  except,  in lieu of said rate
of six per  cent,  (A)  at  a  rate  of  five  and
one-half per cent  of  the  gross  receipts of any
retailer  from  the   sale   of   any   repair  or
replacement   parts   exclusively   for   use   in
machinery,  as  defined   in  subsection  (34)  of
section 12-412, used  directly  in a manufacturing
production process, (B)  at  a  rate of twelve per
cent with respect  to  each transfer of occupancy,
from the total  amount  of  rent received for such
occupancy of any  room  or  rooms  in  a  hotel or
lodging house for  the  first period not exceeding
thirty consecutive calendar days, (C) with respect
to the sale  of  a motor vehicle to any individual
who is a  member of the armed forces of the United
States  and  is   on   full-time  active  duty  in
Connecticut and who  is  considered,  under 50 App
USC 574, a  resident  of  another state, OR TO ANY
SUCH INDIVIDUAL AND  THE SPOUSE THEREOF, at a rate
of  four  and  one-half  per  cent  of  the  gross
receipts of any retailer from such sales, provided
such retailer requires  and maintains an affidavit
or   other   evidence,    satisfactory    to   the
commissioner, concerning the  purchaser's state of
residence under 50  App  USC 574, (D) with respect
to the sale of a vessel to any individual who does
not maintain a  permanent  place  of abode in this
state and who  is  a resident of another state and
who does not  present such vessel for registration
with the Department  of  Motor  Vehicles  in  this
state, at a  rate  which is the lesser of: (i) Six
per cent of  the  gross  receipts  of any retailer
from such sales;  or  (ii)  the percentage of such
gross receipts that  is  payable  as a state sales
tax  by  retailers  engaged  in  business  in  the
purchaser's  state  of  residence,  provided  such
retailer requires and  maintains  an  affidavit or
other evidence, satisfactory  to the commissioner,
concerning the purchaser's state of residence, (E)
with respect to  the  sales  of  computer and data
processing services occurring  on or after July 1,
1997, and prior  to  July  1, 1998, at the rate of
five per cent, on or after July 1, 1998, and prior
to July 1,  1999, at the rate of four per cent, on
or after July  1, 1999, and prior to July 1, 2000,
at the rate of three per cent, on or after July 1,
2000, and prior  to  July  1, 2001, at the rate of
two per cent, on and after July 1, 2001, and prior
to July 1,  2002,  at the rate of one per cent and
on and after  July 1, 2002, such services shall be
exempt from such  tax, and (F) with respect to the
sales of repair or maintenance services on vessels
as defined in  section  15-127,  occurring  on  or
after July 1,  1997, and prior to July 1, 1998, at
the rate of  four  per  cent,  on or after July 1,
1998, and prior  to  July  1, 1999, at the rate of
two per cent  and  on and after July 1, 1999, such
services shall be  exempt  from such tax. The rate
of tax imposed by this chapter shall be applicable
to all retail  sales  upon  the  effective date of
such rate, except that a new rate which represents
an increase in  the  rate  applicable  to the sale
shall not apply to any sales transaction wherein a
binding sales contract without an escalator clause
has been entered  into prior to the effective date
of the new rate and delivery is made within ninety
days after the effective date of the new rate. For
the purposes of  payment  of the tax imposed under
this section, any  retailer  of  services  taxable
under subdivision (i) of subsection (2) of section
12-407, AS AMENDED,  who  computes taxable income,
for  purposes  of   taxation  under  the  Internal
Revenue   Code  of   1986,   or   any   subsequent
corresponding internal revenue  code of the United
States,  as from  time  to  time  amended,  on  an
accounting basis which  recognizes  only  cash  or
other valuable consideration  actually received as
income and who  is liable for such tax only due to
the rendering of  such  services may make payments
related to such  tax  for  the period during which
such  income  is   received,  without  penalty  or
interest, without regard  to  when such service is
rendered. Information about  the  state  sales tax
rate  of other  states  shall,  upon  request,  be
furnished by the commissioner.
    Sec. 18. Subsection  (1)  of section 12-411 of
the general statutes,  as amended by section 19 of
public act 97-243,  is  repealed and the following
is substituted in lieu thereof:
    (1) An excise  tax  is  hereby  imposed on the
storage, acceptance, consumption  or any other use
in  this  state   of  tangible  personal  property
purchased   from   any   retailer   for   storage,
acceptance, consumption or  any  other use in this
state, the acceptance  or  receipt of any services
constituting a sale  in accordance with subsection
(2) of section  12-407, AS AMENDED, purchased from
any retailer for consumption or use in this state,
or the storage,  acceptance,  consumption  or  any
other  use in  this  state  of  tangible  personal
property which has  been manufactured, fabricated,
assembled or processed from materials by a person,
either within or  without this state, for storage,
acceptance, consumption or  any  other use by such
person in this  state, to be measured by the sales
price of materials, at the rate of six per cent of
the sales price  of  such  property  or  services,
except, in lieu  of said rate of six per cent, (A)
with   respect   to   the   storage,   acceptance,
consumption or use  of  any  repair or replacement
parts purchased from  any  retailer  for  storage,
acceptance, consumption or  use  in this state, at
the rate of  five  and  one-half  per  cent of the
sales price of such parts, provided such parts are
exclusively for use  in  machinery,  as defined in
subsection (34) of  section  12-412,  that is used
directly in a  manufacturing  production  process,
(B) at a  rate of twelve per cent of the rent paid
for occupancy of  any  room or rooms in a hotel or
lodging  house  for   the   first  period  of  not
exceeding thirty consecutive  calendar  days,  (C)
with   respect   to   the   storage,   acceptance,
consumption  or use  in  this  state  of  a  motor
vehicle purchased from  any  retailer for storage,
acceptance, consumption or  use  in  this state by
any individual who is a member of the armed forces
of the United  States  and  is on full-time active
duty in Connecticut  and  who is considered, under
50 App USC 574, a resident of another state, OR TO
ANY  SUCH  INDIVIDUAL   AND  THE  SPOUSE  OF  SUCH
INDIVIDUAL at a rate of four and one-half per cent
of the sales  price  of such vehicle provided such
retailer requires and  maintains  an  affidavit or
other evidence, satisfactory  to the commissioner,
concerning  the  purchaser's  state  of  residence
under 50 App  USC  574,  (D)  with  respect to the
storage, acceptance, consumption  or  use  in this
state of a  vessel purchased from any retailer for
storage, acceptance, consumption  or any other use
in this state  by  any  individual  who  does  not
maintain a permanent  place of abode in this state
and who is  a  resident  of  another state and who
does not present such vessel for registration with
the Department of Motor Vehicles in this state, at
a rate which is the lesser of: (i) Six per cent of
the  sales price  of  such  vessel;  or  (ii)  the
percentage of such  sales price that is payable as
a state use  tax by purchasers making purchases in
the purchaser's state  of  residence, provided the
retailer requires and  maintains  an  affidavit or
other evidence, satisfactory  to the commissioner,
concerning the purchaser's state of residence, (E)
with respect to the sales of repair or maintenance
services on vessels  as defined in section 15-127,
occurring on or  after  July 1, 1997, and prior to
July 1, 1998,  at the rate of four per cent, on or
after July 1,  1998, and prior to July 1, 1999, at
the rate of  two per cent and on and after July 1,
1999, such services shall be exempt from such tax,
and (F) with  respect to the acceptance or receipt
in this state  of  computer  and  data  processing
services   purchased   from   any   retailer   for
consumption or use  in  this state occurring on or
after July 1,  1997, and prior to July 1, 1998, at
the rate of  five per cent of such services, on or
after July 1,  1998, and prior to July 1, 1999, at
the rate of  four per cent of such services, on or
after July 1,  1999, and prior to July 1, 2000, at
the rate of three per cent of such services, on or
after July 1,  2000, and prior to July 1, 2001, at
the rate of  two per cent of such services, on and
after July 1,  2001, and prior to July 1, 2002, at
the rate of  one  per cent of such services and on
and after July  1,  2002,  such  services shall be
exempt from such  tax. Information about the state
use tax rate  of other states shall, upon request,
be furnished by the commissioner.
    Sec. 19. (NEW)  The  Commissioner  of  Revenue
Services is authorized  to pay to a revenue agency
of another state an amount not to exceed fifty per
cent of the  tax  actually collected as the result
of an assessment  made under section 12-416 of the
general   statutes,  as   amended,   against   any
purchaser  of  tangible   personal   property   or
services described in  subsection  (2)  of section
12-407 of the  general  statutes,  as  amended, if
said  commissioner,  in   his   sole   discretion,
determines  that  information   provided  by  such
agency was instrumental  in  the  making  of  such
assessment.
    Sec.  20.  Section   12-458b  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    Any  person  who   receives   fuels   from  an
unlicensed distributor or  in  such form and under
such circumstances as  to preclude collection from
a distributor of the tax imposed in section 12-458
and who thereafter sells or uses any such fuels in
such manner or  under  such  circumstances  as  to
render such sale  or  use  subject to said tax, is
considered to be  a distributor and shall make the
same report, pay  the  same  tax and be subject to
all provisions of  this  chapter  applicable  to a
distributor of such  fuels  except the surety bond
requirement of section  12-456,  PROVIDED ANY SUCH
PERSON WHO IS  A  CONTRACTOR  PERFORMING A SERVICE
FOR A MUNICIPALITY  OR  SCHOOL  DISTRICT  OF  THIS
STATE IN ACCORDANCE WITH A CONTRACT SHALL, IN LIEU
OF FILING TAX  RETURNS  MONTHLY  AND  PAYING TAXES
MONTHLY, FILE A  QUARTERLY TAX RETURN ON OR BEFORE
THE LAST DAY  OF THE MONTH NEXT SUCCEEDING THE END
OF EACH CALENDAR  QUARTER  AND SHALL PAY THE TAXES
DUE WITH SUCH  RETURN ON OR BEFORE THE LAST DAY OF
THE MONTH NEXT SUCCEEDING THE END OF EACH CALENDAR
QUARTER. Such person may, at the discretion of the
commissioner, be required to file a surety bond or
other security acceptable  to  the commissioner in
an amount set by the commissioner.
    Sec. 21. Subsection  (b)  of section 12-459 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (b) All claims for refund shall be accompanied
by original invoices  or  sales  receipts or other
statements  of  fact,   under   penalty  of  false
statement, showing, to  the  satisfaction  of  the
commissioner, that the  tax  has  been paid on the
fuel  involved  in  such  refund,  and  any  other
information  which  is  deemed  necessary  by  the
commissioner for the determination of such claims.
Any claim for  refund  of  said  tax for fuel used
during any calendar  year  shall be filed with the
commissioner on or before [March] MAY thirty-first
of the succeeding  year.  Such claim shall be on a
form prescribed by  the  commissioner  which shall
contain such information as he deems necessary for
the determination of such claim.
    Sec. 22. Subsection  (a)  of section 12-498 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (a) The tax  imposed  by  section 12-494 shall
not  apply to:  (1)  Deeds  which  this  state  is
prohibited from taxing  under  the constitution or
laws of the  United States; (2) deeds which secure
a debt or  other  obligation;  (3)  deeds to which
this state or any of its political subdivisions or
its or their  respective  agencies is a party; (4)
tax deeds; (5)  deeds of release of property which
is security for  a  debt  or other obligation; (6)
deeds of partition;  (7)  deeds  made  pursuant to
mergers  of corporations;  (8)  deeds  made  by  a
subsidiary corporation to  its  parent corporation
for no consideration  other  than the cancellation
or  surrender  of   the  subsidiary's  stock;  (9)
[conveyance of an interest in real property] DEEDS
MADE pursuant to  a  decree  of the Superior Court
under  section  46b-81,  49-24  or  52-495;  [(10)
certificates  of  devise   or  distribution;  (11)
transfers for no consideration between parents and
children;   (12)   an    assignment,    with    no
consideration,  of  any   interests,   present  or
future, vested or  contingent,  in  real  property
which  endure  for   a  period  of  time  and  the
termination of which  is  not fixed or ascertained
by a specific number of years; (13) an assignment,
with no consideration, of the unexpired portion of
a term or  estate  for life or of a term or estate
for years; (14)  transfers  made  by a corporation
affiliated  with the  corporation  to  which  such
transfer   is   made]   (10)   DEEDS,   WHEN   THE
CONSIDERATION  FOR  THE   INTEREST   OR   PROPERTY
CONVEYED IS LESS  THAN  TWO THOUSAND DOLLARS; (11)
DEEDS  BETWEEN AFFILIATED  CORPORATIONS,  provided
both of such corporations are exempt from taxation
pursuant to paragraph  (2), (3) or (25) of Section
501(c) 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 provided further such corporations
are affiliated in  such  manner  that  (A)  either
corporation in such  transaction  owns or controls
either directly or  indirectly  not  less than one
hundred per cent of the capital stock of the other
corporation  or (B)  either  corporation  in  such
transaction is owned or controlled either directly
or indirectly by  interests  which  own or control
either directly or  indirectly  not  less than one
hundred per cent of the capital stock of the other
corporation; (15) transfers]  (12) DEEDS made by a
corporation which is exempt from taxation pursuant
to paragraph (3) of Section 501(c) of the Internal
Revenue   Code  of   1986,   or   any   subsequent
corresponding internal revenue  code of the United
States, as from  time  to  time  amended,  to  any
corporation which is exempt from taxation pursuant
to said paragraph  (3)  of  said  Section  501(c);
[(16) transfers made  on  or  after July 1, 1992,]
(13)  DEEDS MADE  to  any  nonprofit  organization
which is organized  for  the  purpose  of  holding
undeveloped  land in  trust  for  conservation  or
recreation purposes; [(17)  transfers]  (14) DEEDS
between spouses; and  [(18)  transfers] (15) DEEDS
of property for  the  stadium  facility  site,  as
defined in section 32-381 or the practice facility
site, as defined in section 32-381.
    Sec.  23.  (NEW)   When  the  Commissioner  of
Revenue Services makes a deficiency assessment for
any taxes payable under chapter 223 of the general
statutes  to  the   state,   the  commissioner  is
authorized to make a deficiency assessment for any
taxes  payable  under   said   chapter  223  to  a
municipality and to hold a hearing, when requested
in writing by  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  said chapter 223 on or before the
sixtieth  day  after  notice  of  such  action  is
delivered or mailed to such person. The deficiency
assessment  for  any   taxes  payable  under  said
chapter 223 to  a municipality shall bear interest
at the rate  of one per cent per month or fraction
thereof from the  date  when  the original tax was
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 said chapter 223 or
regulations adopted under  said chapter 223, there
shall be imposed  a  penalty equal to ten per cent
of the amount  of  such  deficiency assessment, or
fifty  dollars,  whichever  is  greater.  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 said chapter 223
or regulations adopted  under  said  chapter  223,
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. Once a
deficiency assessment for  any taxes payable under
said chapter 223  to  a  municipality is no longer
the  subject  of  a  timely  filed  administrative
appeal to the  commissioner  or  of a timely filed
appeal  pending  before  any  court  of  competent
jurisdiction,  the commissioner  may  collect,  on
behalf of such  municipality,  such taxes, and all
interest and penalties added thereto by law, under
the provisions of  section  12-35  of  the general
statutes as if  such  taxes, penalties or interest
due such municipality were "tax due the state", as
such term is defined in said section 12-35, and as
if such term  expressly  included taxes, penalties
or interest due  to such municipality. Such taxes,
and all interest  and  penalties  added thereto by
law, shall be  treated, for purposes of subsection
(a) of section  12-39g of the general statutes, as
amended, and for  purposes  of  subsection  (a) of
section  12-739  of   the   general  statutes,  as
amended, as if they were taxes due to the state.
    Sec. 24. Subsection  (4)  of section 12-540 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (4) "Cabaret or other similar place" means any
room  in any  hotel,  restaurant,  hall  or  other
public place where  music,  dancing  privileges or
any other entertainment,  except  mechanical music
alone or the  music of a single performer alone OR
KARAOKE ALONE WITHOUT  A PAID KARAOKE ENTERTAINER,
are afforded the  patrons  in  connection with the
serving or selling  of  alcoholic  beverages  even
though the charge made for admission, refreshment,
service or merchandise  is not increased by reason
of the furnishing  of such entertainment. "CABARET
OR OTHER SIMILAR  PLACE" DOES NOT INCLUDE ANY ROOM
IN ANY RESTAURANT, AS DEFINED IN SUBSECTION (e) OF
SECTION 30-22, FOR  WHICH ONLY A RESTAURANT PERMIT
FOR BEER, AS PROVIDED IN SUBSECTION (b) OF SECTION
30-22, OR ONLY  A  RESTAURANT  PERMIT FOR WINE AND
BEER, AS PROVIDED  IN  SUBSECTION  (c)  OF SECTION
30-22 HAS BEEN ISSUED.
    Sec.  25.  Section   12-587   of  the  general
statutes, as amended  by  section  1 of public act
97-281,  is  repealed   and   the   following   is
substituted in lieu thereof:
    (a) As used  in  this  chapter:  (1) "Company"
includes  a  corporation,   partnership,   limited
partnership,  LIMITED LIABILITY  COMPANY,  LIMITED
LIABILITY PARTNERSHIP, association,  individual or
any  fiduciary  thereof;  (2)  "quarterly  period"
means a period of three calendar months commencing
on  the first  day  of  January,  April,  July  or
October and ending on the last day of March, June,
September or December,  respectively;  (3)  "gross
earnings"  means  [those   earnings  derived]  ALL
CONSIDERATION RECEIVED from  the first sale within
this state of a petroleum product; [, but does not
include  earnings in  a  taxable  year  commencing
prior to January 1, 2000, from the sale of propane
gas  as a  fuel  for  a  motor  vehicle  and]  (4)
"petroleum products" means  those  products  which
contain or are  made from petroleum or a petroleum
derivative; [, but  does  not mean (A) the product
designated by the American Society for Testing and
Materials  as  "Specification   for   Heating  Oil
D396-69", commonly known  as number 2 heating oil,
to be used  exclusively for heating purposes or to
be  used in  a  commercial  fishing  vessel  which
vessel  qualifies for  an  exemption  pursuant  to
section 12-412, (B)  kerosene,  commonly  known as
number  1  oil,   used   exclusively  for  heating
purposes, provided delivery  is  of  both number 1
and number 2  oil,  and via a truck with a metered
delivery ticket to  a residential dwelling or to a
centrally  metered  system   serving  a  group  of
residential dwellings, (C)  the product identified
as propane gas  to be used exclusively for heating
purposes, or (D)  bunker  fuel  oil,  intermediate
fuel, marine diesel oil and marine gas oil for use
in any vessel having a displacement exceeding four
thousand dead weight  tons.  For calendar quarters
commencing on or  after  July  1,  2002, petroleum
products shall not  include  grade  number  6 fuel
oil, as defined in regulations adopted pursuant to
section  16a-22c, to  be  used  exclusively  by  a
company  which, in  accordance  with  census  data
contained    in    the     Standard     Industrial
Classification  Manual, United  States  Office  of
Management and Budget,  1987  edition, is included
in code classifications  2000  to 3999, inclusive,
or number 2  heating  oil  used  exclusively  in a
vessel primarily engaged  in  interstate commerce,
which  vessel qualifies  for  an  exemption  under
12-412]  (5) "FIRST  SALE  OF  PETROLEUM  PRODUCTS
WITHIN THIS STATE"  MEANS  THE  INITIAL  SALE OF A
PETROLEUM PRODUCT DELIVERED  TO A LOCATION IN THIS
STATE; (6) "EXPORT"  OR  "EXPORTATION"  MEANS  THE
CONVEYANCE OF PETROLEUM  PRODUCTS FROM WITHIN THIS
STATE TO A  LOCATION  OUTSIDE  THIS  STATE FOR THE
PURPOSE OF SALE OR USE OUTSIDE THIS STATE; AND (7)
"SALE FOR EXPORTATION"  MEANS  A SALE OF PETROLEUM
PRODUCTS TO A  PURCHASER WHICH ITSELF EXPORTS SUCH
PRODUCTS.
    (b)  (1)  Except   as  OTHERWISE  provided  in
subdivision (2) of  this  subsection,  any company
which is engaged  in the refining or distribution,
or  both,  of   petroleum   products   and   which
distributes such products  in this state shall pay
a quarterly tax  [at the rate of five per cent of]
ON its gross  earnings derived from the FIRST sale
of  petroleum products  within  this  state.  Each
company shall on  or  before  the  last day of the
month next succeeding each quarterly period render
to the commissioner [, under oath of its treasurer
or the person  performing  the duties of treasurer
or of an authorized agent or officer,] a return on
forms prescribed or  furnished by the commissioner
AND SIGNED BY  THE PERSON PERFORMING THE DUTIES OF
TREASURER  OR  AN  AUTHORIZED  AGENT  OR  OFFICER,
including the amount  of  gross  earnings  derived
from the FIRST  sale  of petroleum products within
this state for the quarterly period and such other
facts as the  commissioner  may  require  for  the
purpose of making any computation required by this
chapter.   EXCEPT   AS   OTHERWISE   PROVIDED   IN
SUBDIVISION (3) OF  THIS  SUBSECTION,  THE RATE OF
TAX SHALL BE FIVE PER CENT.
    (2) GROSS EARNINGS DERIVED FROM THE FIRST SALE
OF THE FOLLOWING  PETROLEUM  PRODUCTS  WITHIN THIS
STATE SHALL BE  EXEMPT FROM TAX: (A) ANY PETROLEUM
PRODUCTS SOLD FOR  EXPORTATION FROM THIS STATE FOR
SALE OR USE  OUTSIDE  THIS  STATE; (B) THE PRODUCT
DESIGNATED BY THE AMERICAN SOCIETY FOR TESTING AND
MATERIALS  AS  "SPECIFICATION   FOR   HEATING  OIL
D396-69", COMMONLY KNOWN  AS NUMBER 2 HEATING OIL,
TO BE USED  EXCLUSIVELY FOR HEATING PURPOSES OR TO
BE USED IN  A  COMMERCIAL  FISHING  VESSEL,  WHICH
VESSEL  QUALIFIES FOR  AN  EXEMPTION  PURSUANT  TO
SECTION 12-412, AS AMENDED; (C) KEROSENE, COMMONLY
KNOWN AS NUMBER  1 OIL, TO BE USED EXCLUSIVELY FOR
HEATING PURPOSES, PROVIDED  DELIVERY  IS  OF  BOTH
NUMBER 1 AND  NUMBER 2 OIL, AND VIA A TRUCK WITH A
METERED DELIVERY TICKET  TO A RESIDENTIAL DWELLING
OR TO A  CENTRALLY  METERED SYSTEM SERVING A GROUP
OF   RESIDENTIAL  DWELLINGS;   (D)   THE   PRODUCT
IDENTIFIED AS PROPANE  GAS, TO BE USED EXCLUSIVELY
FOR  HEATING  PURPOSES;   (E)   BUNKER  FUEL  OIL,
INTERMEDIATE FUEL, MARINE  DIESEL  OIL  AND MARINE
GAS  OIL  TO  BE  USED  IN  ANY  VESSEL  HAVING  A
DISPLACEMENT EXCEEDING FOUR  THOUSAND  DEAD WEIGHT
TONS; (F) FOR  ANY  FIRST  SALE OCCURRING PRIOR TO
JANUARY 1, 2000,  PROPANE GAS TO BE USED AS A FUEL
FOR  A MOTOR  VEHICLE;  (G)  FOR  ANY  FIRST  SALE
OCCURRING ON OR AFTER JULY 1, 2002, GRADE NUMBER 6
FUEL  OIL,  AS   DEFINED  IN  REGULATIONS  ADOPTED
PURSUANT   TO  SECTION   16a-22c,   TO   BE   USED
EXCLUSIVELY BY A COMPANY WHICH, IN ACCORDANCE WITH
CENSUS DATA CONTAINED  IN  THE STANDARD INDUSTRIAL
CLASSIFICATION  MANUAL, UNITED  STATES  OFFICE  OF
MANAGEMENT AND BUDGET,  1987  EDITION, IS INCLUDED
IN CODE CLASSIFICATIONS  2000  TO 3999, INCLUSIVE;
OR (H) FOR  ANY  FIRST  SALE OCCURRING ON OR AFTER
JULY 1, 2002,  NUMBER  2  HEATING  OIL  TO BE USED
EXCLUSIVELY  IN  A  VESSEL  PRIMARILY  ENGAGED  IN
INTERSTATE COMMERCE, WHICH VESSEL QUALIFIES FOR AN
EXEMPTION UNDER SECTION 12-412, AS AMENDED.
    [(2)] (3) The  rate  of  tax ON GROSS EARNINGS
derived from the FIRST sale of grade number 6 fuel
oil, as defined in regulations adopted pursuant to
section  16a-22c, to  be  used  exclusively  by  a
company  which, in  accordance  with  census  data
contained    in    the     Standard     Industrial
Classification  Manual, United  States  Office  of
Management and Budget,  1987  edition, is included
in code classifications  2000  to 3999, inclusive,
or number 2  heating  oil  used  exclusively  in a
vessel primarily engaged  in  interstate commerce,
which  vessel qualifies  for  an  exemption  under
SECTION 12-412, AS AMENDED, shall be: (A) Four per
cent with respect  to calendar quarters commencing
on or after  July  1,  1998,  and prior to July 1,
1999; (B) three  per cent with respect to calendar
quarters commencing on  or after July 1, 1999, and
prior to July  1,  2000;  (C)  two  per  cent with
respect  to calendar  quarters  commencing  on  or
after July 1, 2000, and prior to July 1, 2001; and
(D) one per cent with respect to calendar quarters
commencing on or  after July 1, 2001, and prior to
July  1,  2002.  [Gross  earnings  from  sales  as
provided in this  subdivision shall not be subject
to the provisions  of this chapter with respect to
calendar quarters commencing  on  or after July 1,
2002.]
    (c) (1) Any company which imports or causes to
be imported into this state petroleum products for
its use and  consumption,  other  than  a  company
[which is] subject  to and [which has] HAVING paid
the tax on  such  COMPANY'S  GROSS  EARNINGS  FROM
FIRST  SALES OF  petroleum  products  WITHIN  THIS
STATE,  WHICH  EARNINGS   INCLUDE  GROSS  EARNINGS
ATTRIBUTABLE TO SUCH  IMPORTED  OR  CAUSED  TO  BE
IMPORTED PETROLEUM PRODUCTS,  in  accordance  with
subsection  (b)  of  this  section,  shall  pay  a
quarterly tax [at the rate of five per cent of] ON
the consideration given  or contracted to be given
for such petroleum  product  if  the consideration
given or contracted  to  be  given  for  all  such
deliveries during the  quarterly  period for which
such  tax  is  to  be  paid  exceeds  one  hundred
thousand  dollars.  [For   the  purposes  of  this
subsection, "use" includes  the  sale  of imported
petroleum  products  in   the  regular  course  of
business.]  EXCEPT  AS   OTHERWISE   PROVIDED   IN
SUBDIVISION (3) OF  THIS  SUBSECTION,  THE RATE OF
TAX SHALL BE  FIVE  PER  CENT.  Fuel  in  the fuel
supply tanks of  a motor vehicle, which fuel tanks
are directly connected to the engine, shall not be
considered a delivery  for  the  purposes  of this
subsection.
    (2) CONSIDERATION GIVEN  OR  CONTRACTED  TO BE
GIVEN FOR PETROLEUM  PRODUCTS, GROSS EARNINGS FROM
THE FIRST SALE  OF WHICH ARE EXEMPT FROM TAX UNDER
SUBDIVISION (2) OF SUBSECTION (b) OF THIS SECTION,
SHALL BE EXEMPT FROM TAX.
    (3) THE RATE  OF TAX ON CONSIDERATION GIVEN OR
CONTRACTED TO BE  GIVEN  FOR  GRADE  NUMBER 6 FUEL
OIL, AS DEFINED IN REGULATIONS ADOPTED PURSUANT TO
SECTION  16a-22c, TO  BE  USED  EXCLUSIVELY  BY  A
COMPANY  WHICH, IN  ACCORDANCE  WITH  CENSUS  DATA
CONTAINED    IN    THE     STANDARD     INDUSTRIAL
CLASSIFICATION  MANUAL, UNITED  STATES  OFFICE  OF
MANAGEMENT AND BUDGET,  1987  EDITION, IS INCLUDED
IN CODE CLASSIFICATIONS  2000  TO 3999, INCLUSIVE,
OR NUMBER 2  HEATING  OIL  USED  EXCLUSIVELY  IN A
VESSEL PRIMARILY ENGAGED  IN  INTERSTATE COMMERCE,
WHICH  VESSEL QUALIFIES  FOR  AN  EXEMPTION  UNDER
SECTION 12-412, AS AMENDED, SHALL BE: (A) FOUR PER
CENT WITH RESPECT  TO CALENDAR QUARTERS COMMENCING
ON OR AFTER  JULY  1,  1998,  AND PRIOR TO JULY 1,
1999; (B) THREE  PER CENT WITH RESPECT TO CALENDAR
QUARTERS COMMENCING ON  OR AFTER JULY 1, 1999, AND
PRIOR TO JULY  1,  2000;  (C)  TWO  PER  CENT WITH
RESPECT  TO CALENDAR  QUARTERS  COMMENCING  ON  OR
AFTER JULY 1, 2000, AND PRIOR TO JULY 1, 2001; AND
(D) ONE PER CENT WITH RESPECT TO CALENDAR QUARTERS
COMMENCING ON OR  AFTER JULY 1, 2001, AND PRIOR TO
JULY 1, 2002.
    (d) The amount  of  tax  reported to be due on
such return shall  be due and payable on or before
the last day  of  the  month  next  succeeding the
quarterly  period.  The   tax  imposed  under  the
provisions of this chapter shall be in addition to
any  other tax  imposed  by  this  state  on  such
company.
    (e) For the  purposes  of  this  chapter,  the
gross  earnings of  any  producer  or  refiner  of
petroleum  products operating  a  service  station
along the highways  or  interstate highways within
the  state  pursuant   to   a  contract  with  the
Department  of  Transportation   or   operating  a
service station which  is  used  as  a training or
test  marketing center  under  the  provisions  of
subsection  (b)  of   section  14-344d,  shall  be
calculated by multiplying  the volume of petroleum
products delivered by  any  producer or refiner to
any such station  by  such producer's or refiner's
dealer tank wagon  price or dealer wholesale price
in the area of the service station.
    Sec.  26.  Section   12-587a  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) Any company,  as  such  term  is  used  in
section 12-587, AS AMENDED BY THIS ACT, liable for
the tax imposed  under  [said]  SUBSECTION  (b) OF
SAID section 12-587 on gross earnings from [sales]
THE FIRST SALE  of  petroleum products WITHIN THIS
STATE,  which  products   the   purchaser  thereof
subsequently sells FOR EXPORTATION AND SALE OF USE
outside  [the] THIS  state,  shall  be  allowed  a
credit against any  tax  for which such company is
liable in accordance with [said] SUBSECTION (b) OF
SAID section 12-587,  in the amount of tax paid to
the  state  with  respect  to  the  sale  of  such
products,   provided  (1)   such   purchaser   has
submitted certification to  such  company, in such
form as prescribed  by the Commissioner of Revenue
Services, that such  products  were  sold  OR USED
outside [the] THIS  state,  (2) such certification
and any additional  information  related  to  such
sale  OR  USE   BY   SUCH  PURCHASER,  which  said
commissioner may request,  have  been submitted to
said commissioner and  (3)  such  company  makes a
payment  to  such   purchaser,   related  to  such
products sold OR USED outside [the] THIS state, in
the amount [of  that  portion  of  the total sales
price  therefor representing]  EQUAL  TO  the  tax
imposed  under  said   section   12-587  ON  GROSS
EARNINGS FROM THE  FIRST  SALE  TO  SUCH PURCHASER
WITHIN THE STATE.  In addition, such company shall
be allowed such  credit  when  there  has been any
sale of such  products  subsequent  to THE sale by
such company but  prior  to  sale  OR  USE outside
[the]  THIS state,  provided  (1)  each  purchaser
receives payment, related to [the inclusion of the
amount of such  tax  in the total sales price paid
by  the purchaser]  SUCH  PRODUCTS  SOLD  OR  USED
OUTSIDE THIS STATE, EQUAL TO THE TAX IMPOSED UNDER
SAID SECTION 12-587,  ON  GROSS  EARNINGS FROM THE
FIRST SALE OF SUCH PRODUCTS WITHIN THIS STATE, and
(2) the purchaser  [consummating the sale] SELLING
OR USING SUCH  PRODUCTS  outside  [the] THIS state
complies with the  requirements  in  this  section
related to a  purchaser  of such products from the
company liable for such tax.
    (b) ANY COMPANY  WHICH IMPORTS OR CAUSES TO BE
IMPORTED PETROLEUM PRODUCTS  INTO  THIS  STATE FOR
ITS OWN USE  OR  CONSUMPTION  SHALL  BE  ALLOWED A
CREDIT AGAINST TAX UNDER SUBSECTION (c) OF SECTION
12-587,  AS  AMENDED   BY   THIS   ACT,   ON   THE
CONSIDERATION GIVEN OR  CONTRACTED TO BE GIVEN FOR
ALL DELIVERIES IF THE COMPANY SUBSEQUENTLY EXPORTS
SUCH PETROLEUM PRODUCTS  FOR  SALE  OR USE OUTSIDE
THIS STATE.
    Sec.  27.  Section   12-687   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) Any electronic  funds  transfer  shall  be
initiated in a  timely  fashion in order to ensure
that the bank account designated by the department
is credited BY  ELECTRONIC  FUNDS TRANSFER for the
amount of the  tax  payment required to be made by
such method on  or  before  the  due date thereof,
[provided  with  respect   to   any   transfer  by
electronic funds transfer  by  any employer who is
required to pay  over  Connecticut income tax that
has  been  deducted  and  withheld  from  employee
wages, an electronic funds transfer will be deemed
to have been  initiated in a timely fashion if the
bank  account  designated  by  the  department  is
credited  for  the  amount  of  such  tax  payment
required to be  made  by  such method on or before
the business day  next  succeeding  the  due  date
thereof] OR, IN THE CASE OF THE PAYMENT OVER BY AN
EMPLOYER OF INCOME  TAX DEDUCTED AND WITHHELD FROM
EMPLOYEE WAGES, THE  NEXT  SUCCEEDING  DAY THAT IS
NOT  A  SATURDAY,  SUNDAY  OR  LEGAL  HOLIDAY,  AS
DEFINED IN SECTION 12-39a, AS AMENDED.
    (b) [If the  bank  account  designated  by the
department is not  credited  for the amount of the
tax payment on  or  before  the  due date thereof,
such payment shall  be considered a failure to pay
the tax required  to be so paid in a timely manner
and] (1) WHERE  A  TAX  PAYMENT  IS REQUIRED TO BE
MADE BY ELECTRONIC  FUNDS  TRANSFER,  ANY  PAYMENT
MADE BY OTHER THAN ELECTRONIC FUNDS TRANSFER SHALL
BE TREATED AS  A  TAX PAYMENT NOT MADE IN A TIMELY
MANNER, AND ANY  PAYMENT  MADE BY ELECTRONIC FUNDS
TRANSFER, WHERE THE BANK ACCOUNT DESIGNATED BY THE
DEPARTMENT IS NOT  CREDITED  FOR THE AMOUNT OF THE
TAX PAYMENT ON  OR BEFORE THE DUE DATE THEREOF, OR
IN THE CASE  OF THE PAYMENT OVER BY AN EMPLOYER OF
INCOME TAX DEDUCTED  AND  WITHHELD  FROM  EMPLOYEE
WAGES, THE NEXT  SUCCEEDING  DAY  THAT  IS  NOT  A
SATURDAY, SUNDAY OR  LEGAL  HOLIDAY, AS DEFINED IN
SECTION 12-39a, AS  AMENDED, SHALL BE TREATED AS A
TAX PAYMENT NOT  MADE  IN A TIMELY MANNER. ANY TAX
PAYMENT TREATED UNDER  THIS  SUBSECTION  AS  A TAX
PAYMENT NOT MADE  IN  A  TIMELY  MANNER  shall  be
subject to penalty and interest in accordance with
the applicable provisions of the general statutes.
[,  provided  with  respect  to  any  transfer  by
electronic funds transfer  by  any employer who is
required to pay  over  Connecticut income tax that
has  been  deducted  and  withheld  from  employee
wages,  if the  bank  account  designated  by  the
department is not  credited for the amount of such
tax payment on  or  before  the  business day next
succeeding  the due  date  thereof,  such  payment
shall be considered  a  failure  to  pay  the  tax
required to be  so  paid  in  a  timely manner and
shall  be  subject  to  penalty  and  interest  in
accordance with the  applicable  provisions of the
general statutes.]
    (2) WHERE ANY  TAX  PAYMENT  IS  TREATED UNDER
THIS SUBSECTION AS  A  TAX  PAYMENT  NOT MADE IN A
TIMELY MANNER BECAUSE  IT  IS  MADE  BY OTHER THAN
ELECTRONIC FUNDS TRANSFER,  THERE SHALL BE IMPOSED
A PENALTY EQUAL TO TEN PER CENT OF THE TAX PAYMENT
REQUIRED TO BE  MADE BY ELECTRONIC FUNDS TRANSFER.
WHERE ANY TAX  PAYMENT  MADE  BY  ELECTRONIC FUNDS
TRANSFER IS TREATED UNDER THIS SUBSECTION AS A TAX
PAYMENT NOT MADE  IN  A  TIMELY MANNER BECAUSE THE
BANK ACCOUNT DESIGNATED  BY  THE DEPARTMENT IS NOT
CREDITED  BY ELECTRONIC  FUNDS  TRANSFER  FOR  THE
AMOUNT OF THE  TAX  PAYMENT  ON  OR BEFORE THE DUE
DATE THEREOF, THERE  SHALL  BE  IMPOSED  A PENALTY
EQUAL TO TWO  PER CENT OF THE TAX PAYMENT REQUIRED
TO BE MADE  BY  ELECTRONIC FUNDS TRANSFER, IF SUCH
FAILURE TO PAY BY ELECTRONIC FUNDS TRANSFER IS FOR
NOT MORE THAN  FIVE DAYS, FIVE PER CENT OF THE TAX
PAYMENT REQUIRED TO  BE  MADE  BY ELECTRONIC FUNDS
TRANSFER, IF SUCH  FAILURE  TO  PAY  BY ELECTRONIC
FUNDS TRANSFER IS  FOR MORE THAN FIVE DAYS BUT NOT
MORE THAN FIFTEEN  DAYS,  AND  TEN PER CENT OF THE
TAX PAYMENT REQUIRED  TO  BE  MADE  BY  ELECTRONIC
FUNDS  TRANSFER,  IF   SUCH   FAILURE  TO  PAY  BY
ELECTRONIC FUNDS TRANSFER IS FOR MORE THAN FIFTEEN
DAYS.
    Sec.  28.  Section   12-704   of  the  general
statutes, as amended  by  section  4 of public act
97-286,  is  repealed   and   the   following   is
substituted in lieu thereof:
    (a) Any resident or part-year resident of this
state shall be  allowed  a  credit against the tax
otherwise due under  this chapter in the amount of
any  income  tax   imposed  on  such  resident  or
part-year resident for the taxable year by another
state  of  the   United   States  or  a  political
subdivision thereof or  the  District  of Columbia
[or any province of Canada] on income derived from
sources therein and  which  is also subject to tax
under this chapter. In the case of a resident, the
credit  provided  under  this  section  shall  not
exceed the proportion  of  the  tax  otherwise due
under  this  chapter   that   the  amount  of  the
taxpayer's  Connecticut  adjusted   gross   income
derived from or  connected  with  sources  in  the
other taxing jurisdiction bears to such taxpayer's
Connecticut  adjusted  gross   income  under  this
chapter. In the  case of a part-year resident, the
credit  provided  under  this  section  shall  not
exceed the proportion  of  the  tax  otherwise due
during the period  of residency under this chapter
that  the amount  of  the  taxpayer's  Connecticut
adjusted gross income  derived  from  or connected
with sources in  the other jurisdiction during the
period  of  residency  bears  to  such  taxpayer's
Connecticut  adjusted  gross   income  during  the
period of residency  under this chapter, nor shall
the allowance of  the  credit  provided under this
section reduce the  tax  otherwise  due under this
chapter to an  amount  less  than  what would have
been due if the income subject to taxation by such
other jurisdiction were  excluded from Connecticut
adjusted gross income.
    (b) (1) If,  AS  A DIRECT RESULT OF THE CHANGE
TO OR CORRECTION OF A TAXPAYER'S INCOME TAX RETURN
FILED WITH ANOTHER STATE OF THE UNITED STATES OR A
POLITICAL SUBDIVISION THEREOF  OR  THE DISTRICT OF
COLUMBIA BY THE  TAX  OFFICERS  OR OTHER COMPETENT
AUTHORITY OF SUCH  JURISDICTION, the amount of tax
of  [another] SUCH  OTHER  jurisdiction  that  the
taxpayer is finally  required  to pay is different
than  the amount  used  to  determine  the  credit
allowed to any taxpayer under this section for any
taxable year, [commencing  on  or after January 1,
1991,] the taxpayer shall [send] PROVIDE notice of
such difference to the commissioner [within thirty
days of] BY  FILING, ON OR BEFORE THE DATE THAT IS
NINETY DAYS AFTER  the final determination of such
amount,  [except  that   for   the   income   year
commencing January 1,  1991,  only,  the  taxpayer
shall  send  notice  of  such  difference  to  the
commissioner within thirty  days  of  May 8, 1996,
and  the commissioner  shall]  AN  AMENDED  RETURN
UNDER THIS CHAPTER, AND SHALL CONCEDE THE ACCURACY
OF  SUCH DETERMINATION  OR  STATE  WHEREIN  IT  IS
ERRONEOUS. THE COMMISSIONER  MAY  redetermine, and
the taxpayer shall be required to pay, the tax for
any  taxable  year  affected,  regardless  of  any
otherwise applicable statute of limitations.
    (2) IF, AS  A  DIRECT  RESULT  OF  A  TAXPAYER
FILING AN AMENDED  INCOME  TAX RETURN WITH ANOTHER
STATE  OF  THE   UNITED   STATES  OR  A  POLITICAL
SUBDIVISION THEREOF OR  THE  DISTRICT OF COLUMBIA,
THE AMOUNT OF  TAX OF SUCH OTHER JURISDICTION THAT
THE TAXPAYER IS  REQUIRED TO PAY IS DIFFERENT THAN
THE AMOUNT USED TO DETERMINE THE CREDIT ALLOWED TO
ANY TAXPAYER UNDER  THIS  SECTION  FOR ANY TAXABLE
YEAR, THE TAXPAYER  SHALL  PROVIDE  NOTICE OF SUCH
DIFFERENCE TO THE  COMMISSIONER  BY  FILING, ON OR
BEFORE THE DATE THAT IS NINETY DAYS AFTER THE DATE
OF  FILING OF  SUCH  AMENDED  RETURN,  AN  AMENDED
RETURN UNDER THIS  CHAPTER  AND  SHALL  GIVE  SUCH
INFORMATION AS THE  COMMISSIONER  MAY REQUIRE. THE
COMMISSIONER  MAY  REDETERMINE  AND  THE  TAXPAYER
SHALL BE REQUIRED  TO  PAY THE TAX FOR ANY TAXABLE
YEAR  AFFECTED,  REGARDLESS   OF   ANY   OTHERWISE
APPLICABLE STATUTE OF LIMITATIONS.
    (3)  THE  COMMISSIONER   MAY   BY   REGULATION
PRESCRIBE SUCH EXCEPTIONS  TO  THE REQUIREMENTS OF
THIS SUBSECTION AS HE DEEMS APPROPRIATE.
    [(c) In the  case  of a taxpayer who elects to
claim  the foreign  tax  credit  pursuant  to  the
Internal  Revenue  Code  for  federal  income  tax
purposes, the credit under this section for income
tax imposed by  a  province  of  Canada  shall  be
allowed for that portion of the provincial tax not
claimed for federal  income  tax  purposes for the
taxable  year  or   a   preceding   taxable  year,
provided, to the  extent  the  provincial  tax  is
claimed for federal  income  tax  purposes  for  a
succeeding taxable year,  the credit allowed under
this section shall  be added back to the amount of
tax for such  succeeding  taxable year. Credit for
the provincial tax  shall  be deemed to be claimed
last  for federal  income  tax  purposes  and  for
purposes of this subsection.]
    [(d)] (c) A  taxpayer  shall  not  be  allowed
credit under this  section  if  such  taxpayer has
claimed or will  claim a credit against the income
tax imposed by such other jurisdiction for the tax
paid or payable under this chapter.
    [(e)] (d) Notwithstanding  the  provisions  of
subsection  [(d)]  (c)  of  this  section,  if  an
individual 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  a taxable year
and such individual  is domiciled in another state
of the United  States,  a political subdivision of
such state, or  the  District  of Columbia for the
taxable year, such  individual  shall be allowed a
credit  under  this   section   against   the  tax
otherwise due under  this  chapter  for income tax
imposed by and paid to the qualifying jurisdiction
in which such  individual  is  domiciled  on  such
individual's  income  from   intangible   personal
property,  to  the  extent  such  income  is  from
property  not  employed   in  a  business,  trade,
profession or occupation carried on in this state,
and on such  individual's  income  derived from or
connected with sources within another state of the
United States or  the  District  of  Columbia that
does not impose an income tax on such income. This
subsection shall apply only where the jurisdiction
in which such  individual  is  domiciled allows an
income tax credit  for  the  tax  imposed  by this
state to an  individual  who  is domiciled in this
state for a taxable year but maintains a permanent
place of abode in such jurisdiction and is in such
jurisdiction for an  aggregate  of  more  than one
hundred eighty-three days of the taxable year that
is analogous to that provided in this subsection.
    Sec. 29. Subsection  (b)  of section 12-711 of
the  general  statutes   is   amended   by  adding
subdivision (4) as follows:
    (NEW)  (4)  Income   directly   or  indirectly
derived by an  athlete,  entertainer or performing
artist from closed-circuit  and  cable  television
transmissions  of  an  event,  other  than  events
occurring on a  regularly  scheduled basis, taking
place  within  this  state  as  a  result  of  the
rendition of services by such athlete, entertainer
or  performing  artist   shall  constitute  income
derived from or connected with sources within this
state only to  the  extent that such transmissions
were received or exhibited within this state.
    Sec.  30.  Section   12-723   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    The  commissioner  may  for  reasonable  cause
extend the time  for  the  filing  of  any return,
[declaration,] statement or  other document due or
required under this chapter and the payment of tax
due pursuant to  this  chapter  in accordance with
regulations adopted in accordance with chapter 54.
Said commissioner may  require  the  filing  of  a
tentative  return  and  the  payment  of  the  tax
reported to be due thereon in connection with such
extension. Any additional  tax  which may be found
to  be  due   on   the   filing   of   a   return,
[declaration,]  statement  or  other  document  as
allowed by such  extension  shall bear interest at
the rate of  one  per  cent  per month or fraction
thereof from the  original due date of such tax to
the date of  actual  payment.  NOTWITHSTANDING THE
PROVISIONS OF SECTION  12-735, NO PENALTY SHALL BE
IMPOSED ON ACCOUNT  OF  ANY  FAILURE  TO  PAY  THE
AMOUNT OF TAX  REPORTED  TO  BE  DUE  ON A RETURN,
STATEMENT  OR  OTHER   DOCUMENT  WITHIN  THE  TIME
SPECIFIED UNDER THE  PROVISIONS OF THIS CHAPTER IF
THE EXCESS OF  THE  AMOUNT  OF  TAX  SHOWN  ON THE
RETURN,  STATEMENT  OR  OTHER  DOCUMENT  OVER  THE
AMOUNT OF TAX  PAID  ON OR BEFORE THE ORIGINAL DUE
DATE OF SUCH  RETURN,  STATEMENT OR OTHER DOCUMENT
IS NO GREATER  THAN  TEN PER CENT OF THE AMOUNT OF
TAX  SHOWN ON  SUCH  RETURN,  STATEMENT  OR  OTHER
DOCUMENT,  AND  ANY  BALANCE  DUE  SHOWN  ON  SUCH
RETURN, STATEMENT OR  OTHER DOCUMENT IS PAID ON OR
BEFORE  THE EXTENDED  DUE  DATE  OF  SUCH  RETURN,
STATEMENT OR OTHER DOCUMENT.
    Sec. 31. Subsection  (b)  of section 12-727 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (b) (1) If  the amount of a taxpayer's federal
taxable income reported on such taxpayer's federal
income tax return  for any taxable year is changed
or corrected by the United States Internal Revenue
Service or other  competent  authority,  or as the
result  of  a   renegotiation  of  a  contract  or
subcontract with the  United  States, the taxpayer
shall [report] PROVIDE  NOTICE  OF  such change or
correction in federal  taxable  income [within] TO
THE COMMISSIONER BY  FILING, ON OR BEFORE THE DATE
THAT IS ninety  days after the final determination
of such change, correction or renegotiation, or as
otherwise required by the commissioner, AN AMENDED
RETURN UNDER THIS  CHAPTER  and  shall concede the
accuracy of such determination or state wherein it
is erroneous. THE COMMISSIONER MAY REDETERMINE AND
THE TAXPAYER SHALL  BE REQUIRED TO PAY THE TAX FOR
ANY  TAXABLE  YEAR  AFFECTED,  REGARDLESS  OF  ANY
OTHERWISE APPLICABLE STATUTE OF LIMITATIONS.
    (2) Any taxpayer  filing  an  amended  federal
income tax return  shall also file, [within] ON OR
BEFORE THE DATE  THAT  IS ninety days [thereafter]
AFTER THE DATE  OF  FILING OF SUCH AMENDED RETURN,
an amended return  under  this  chapter  and shall
give  such information  as  the  commissioner  may
require. THE COMMISSIONER MAY REDETERMINE, AND THE
TAXPAYER SHALL BE  REQUIRED TO PAY THE TAX FOR ANY
TAXABLE YEAR AFFECTED, REGARDLESS OF ANY OTHERWISE
APPLICABLE STATUTE OF LIMITATIONS.
    (3)  The  commissioner   may   by   regulation
prescribe such exceptions  to  the requirements of
this [section] SUBSECTION as he deems appropriate.
    Sec. 32. Subsection  (b)  of section 12-732 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (b)   (1)   Notwithstanding   the   three-year
limitation  provided by  subsection  (a)  of  this
section, if a  taxpayer  has  timely complied with
the  requirements of  subsection  (b)  of  section
12-727, AS AMENDED  BY  THIS ACT, and, as a direct
result  of the  change  to  [,  correction  of  or
amendment] OR CORRECTION OF THE TAXPAYER'S FEDERAL
INCOME TAX RETURN  BY  THE  UNITED STATES INTERNAL
REVENUE SERVICE OR  OTHER  COMPETENT AUTHORITY, OR
AS  A  DIRECT  RESULT  OF  A  RENEGOTIATION  OF  A
CONTRACT OR SUBCONTRACT  WITH  THE  UNITED STATES,
THE TAX THAT  HAS  PREVIOUSLY  BEEN REPORTED TO BE
DUE ON A  TAX  RETURN  UNDER THIS CHAPTER HAS BEEN
OVERPAID, OR AS A DIRECT RESULT OF AN AMENDMENT BY
THE TAXPAYER of  the taxpayer's federal income tax
return, the tax  that has previously been reported
to be due  on  a tax return under this chapter has
been overpaid, any  claim  for refund subsequently
filed by such taxpayer will be deemed to be timely
filed.
    (2) NOTWITHSTANDING THE  THREE-YEAR LIMITATION
PROVIDED BY SUBSECTION  (a)  OF THIS SECTION, IF A
TAXPAYER HAS TIMELY COMPLIED WITH THE REQUIREMENTS
OF SUBSECTION (b) OF SECTION 12-704, AS AMENDED BY
THIS ACT, AND  AS A DIRECT RESULT OF THE CHANGE TO
OR CORRECTION OF  TAXPAYER'S  INCOME TAX RETURN BY
THE TAX OFFICERS  OR  OTHER COMPETENT AUTHORITY OF
ANOTHER STATE OF  THE UNITED STATES OR A POLITICAL
SUBDIVISION THEREOF OR  THE  DISTRICT OF COLUMBIA,
THE TAX THAT  HAS  PREVIOUSLY  BEEN REPORTED TO BE
DUE ON A  TAX  RETURN  UNDER THIS CHAPTER HAS BEEN
OVERPAID, OR AS A DIRECT RESULT OF AN AMENDMENT BY
THE TAXPAYER OF  THE  TAXPAYER'S INCOME TAX RETURN
TO  ANOTHER  STATE  OF  THE  UNITED  STATES  OR  A
POLITICAL SUBDIVISION THEREOF  OR  THE DISTRICT OF
COLUMBIA,  THE  TAX   THAT   HAS  PREVIOUSLY  BEEN
REPORTED TO BE  DUE  ON  A  TAX  RETURN UNDER THIS
CHAPTER HAS BEEN  OVERPAID,  ANY  CLAIM FOR REFUND
SUBSEQUENTLY FILED BY SUCH TAXPAYER WILL BE DEEMED
TO BE TIMELY FILED.
    Sec. 33. Subsection  (b)  of section 12-733 of
the general statutes,  as amended by section 43 of
public act 97-243,  is  repealed and the following
is substituted in lieu thereof:
    (b) (1) If the taxpayer omits from Connecticut
adjusted  gross  income,   in   the   case  of  an
individual, or from Connecticut taxable income, in
the case of  a trust or estate, an amount properly
includable  therein  which   is   in   excess   of
twenty-five per cent  of the amount of Connecticut
adjusted  gross  income   or  Connecticut  taxable
income, as the  case may be, stated in the return,
a notice of  a  proposed deficiency assessment may
be mailed to  the  taxpayer within six years after
the  return  is   filed.   For  purposes  of  this
subsection, there shall  not be taken into account
any amount which  is omitted in the return if such
amount  is  disclosed  in  the  return,  or  in  a
statement attached to  the  return,  in  a  manner
adequate to apprise  the  Commissioner  of Revenue
Services of the  nature  and  the  amount  of such
item.
    (2) IF THE TAXPAYER OMITS FROM THE CONNECTICUT
ADJUSTED GROSS INCOME  DERIVED  FROM  OR CONNECTED
WITH SOURCES WITHIN  THIS  STATE, IN THE CASE OF A
NONRESIDENT  INDIVIDUAL  OR   PART-YEAR   RESIDENT
INDIVIDUAL,  OR FROM  CONNECTICUT  TAXABLE  INCOME
DERIVED FROM OR CONNECTED WITH SOURCES WITHIN THIS
STATE, IN THE  CASE  OF  A  NONRESIDENT  TRUST  OR
ESTATE  OF PART-YEAR  RESIDENT  TRUST,  AN  AMOUNT
PROPERLY INCLUDABLE THEREIN  WHICH IS IN EXCESS OF
TWENTY-FIVE PER CENT  OF THE AMOUNT OF CONNECTICUT
ADJUSTED GROSS INCOME  DERIVED  FROM  OR CONNECTED
WITH  SOURCES WITHIN  THIS  STATE  OR  CONNECTICUT
TAXABLE  INCOME DERIVED  FROM  OR  CONNECTED  WITH
SOURCES WITHIN THIS  STATE,  AS  THE  CASE MAY BE,
STATED IN THE  RETURN,  A  NOTICE  OF  A  PROPOSED
DEFICIENCY  ASSESSMENT  MAY   BE   MAILED  TO  THE
TAXPAYER WITHIN SIX  YEARS  AFTER  THE  RETURN  IS
FILED.  FOR PURPOSES  OF  THIS  SUBSECTION,  THERE
SHALL NOT BE  TAKEN  INTO ACCOUNT ANY AMOUNT WHICH
IS  OMITTED  IN  THE  RETURN  IF  SUCH  AMOUNT  IS
DISCLOSED  IN  THE   RETURN,  OR  IN  A  STATEMENT
ATTACHED TO THE  RETURN,  IN  A MANNER ADEQUATE TO
APPRISE THE COMMISSIONER  OF  REVENUE  SERVICES OF
THE NATURE AND THE AMOUNT OF SUCH ITEM.
    Sec.  34.  Section   3-55j   of   the  general
statutes, as amended  by  section  2 of public act
97-274 and section  2  of  public act 97-11 of the
June 18 special  session,  is  amended  by  adding
subsection (i) as follows:
    (NEW) (i) For  the fiscal year ending June 30,
1999, and each  fiscal  year  thereafter,  if  the
amount  of grant  payable  to  a  municipality  in
accordance with this  section  is increased as the
result of an  appropriation  to  the  Mashantucket
Pequot and Mohegan Fund for such fiscal year which
exceeds eighty-five million  dollars,  the portion
of the grant  payable  to  each  eligible  service
district, in accordance  with  subsections (a) and
(c) of this section shall be increased by the same
proportion   as  the   grant   payable   to   such
municipality under this  section  as  a  result of
said increased appropriation.
    Sec. 35. This  act  shall take effect from its
passage,  except that  (1)  section  14  shall  be
applicable to estates of persons dying on or after
June 20, 1996,  (2)  sections  4  and  11 shall be
applicable  to calendar  years  commencing  on  or
after  January 1,  1998,  (3)  sections  5  to  8,
inclusive, and section  10  shall be applicable to
income years commencing  on  or  after  January 1,
1998, (4) sections  28  to 33, inclusive, shall be
applicable to taxable years commencing on or after
January 1, 1998, (5) sections 22 and 23 shall take
effect October 1,  1998,  (6)  sections 12, 13, 25
and 26 shall  be  applicable  to calendar quarters
commencing  on  or  after  October  1,  1998,  (7)
section 17, 18 and 24 shall be applicable to sales
occurring on or after October 1, 1998, (8) section
20 shall be  applicable  to  sales  or use of fuel
commencing  on  or  after  October  1,  1998,  (9)
section 27 shall  be  applicable to payments first
due and payable  on or after October 1, 1998, (10)
section 9 shall  be  applicable  to  income  years
commencing on or  after  January 1, 1999, and (11)
section  21 shall  be  applicable  to  claims  for
refund filed on or after January 1, 1999.

Approved June 8, 1998