CHAPTER 208
CORPORATION BUSINESS TAX

PART I
IMPOSITION AND PAYMENT OF TAX

      Sec. 12-214. Imposition of tax. Surcharge. (a)(1) Every mutual savings bank, savings and loan association and every company engaged in the business of carrying passengers for hire over the highways of this state in common carrier motor vehicles doing business in this state, and every other company carrying on, or having the right to carry on, business in this state, including a dissolved corporation which continues to conduct business, except those companies described in subdivision (2) of this subsection, shall pay, annually, a tax or excise upon its franchise for the privilege of carrying on or doing business, owning or leasing property within the state in a corporate capacity or as an unincorporated association taxable as a corporation for federal income tax purposes or maintaining an office within the state, such tax to be measured by the entire net income as herein defined received by such corporation or association from business transacted within the state during the income year and to be assessed for each income year commencing prior to January 1, 1995, at the rate of eleven and one-half per cent, for income years commencing on or after January 1, 1995, and prior to January 1, 1996, at the rate of eleven and one-quarter per cent, for income years commencing on or after January 1, 1996, and prior to January 1, 1997, at the rate of ten and three-fourths per cent, for income years commencing on or after January 1, 1997, and prior to January 1, 1998, at the rate of ten and one-half per cent, for income years commencing on or after January 1, 1998, and prior to January 1, 1999, at the rate of nine and one-half per cent, for income years commencing on or after January 1, 1999, and prior to January 1, 2000, at the rate of eight and one-half per cent, and for income years commencing on or after January 1, 2000, at the rate of seven and one-half per cent. The exemption of companies described in subparagraphs (G) and (H) of subdivision (2) of this subsection shall not be allowed with respect to any income year of any such company commencing on or after January 1, 1998, and any such company claiming such exemption for any income years commencing on or after January 1, 1985, but prior to January 1, 1998, shall be required to file a corporation business tax return in accordance with section 12-222 for each such income year.

      (2) The following companies shall be exempt from the tax imposed under this chapter: (A) Insurance companies incorporated or organized under the laws of any other state or foreign government and for income years commencing on or after January 1, 1999, domestic insurance companies; (B) companies exempt by the federal corporation net income tax law, and any company which qualifies as a domestic international sales corporation (DISC), as defined in Section 992 of the Internal Revenue Code and as to which a valid election under subsection (b) of said Section 992 to be treated as a DISC is effective, but excluding companies, other than any company which so qualifies as, and so elects to be treated as, a DISC, which elect not to be subject to such tax under any provision of said Internal Revenue Code other than said subsection (b) of Section 992; (C) companies subject to gross earnings taxes under chapter 210; (D) companies all of whose properties in this state are operated by companies subject to gross earnings taxes under chapter 210; (E) cooperative housing corporations, as defined for federal income tax purposes; (F) any organization or association of two or more persons established and operated for the exclusive purpose of promoting the success or defeat of any candidate for public office or of any political party or question or constitutional amendment to be voted upon at any state or national election or for any other political purpose; (G) any company which is not owned or controlled, directly or indirectly, by any other company, the gross annual revenues of which in the most recently completed year did not exceed one hundred million dollars and which engaged in the research, design, manufacture, sale or installation of alternative energy systems or motor vehicles powered in whole or in part by electricity, natural gas or solar energy including their parts and components, provided at least seventy-five per cent of the gross annual revenues of such company are derived from such research, design, manufacture, sale or installation; (H) any company which engages in the research, design, manufacture or sale in Connecticut of aero-derived gas turbine systems in advanced industrial applications, which applications are developed after October 1, 1992, which are limited to simple-cycle systems, humid air, steam or water injection, recuperation or intercooling technologies, including their parts and components, to the extent that such company's net income is directly attributable to such purposes; (I) any non-United States corporation, which shall be any foreign corporation, as defined in Section 7701(a)(5) of the Internal Revenue Code, whose sole activity in this state during the income year consists of the trading in stocks, securities or commodities for such corporation's own account, as defined in Section 864(b)(2)(A)(ii) of said Internal Revenue Code; and (J) for income years commencing on or after January 1, 2001, S corporations.

      (3) (A) A company is carrying on or doing business in this state if it is a general partner of a partnership that does business, owns or leases property or maintains an office in this state. (B) A company is carrying on or doing business in this state if it is a limited partner of a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office in this state. (C) A company that is not otherwise carrying on or doing business in this state, either directly or by virtue of being a partner in a partnership described in subparagraph (A) or (B) of this subdivision is not carrying on or doing business in this state solely by virtue of being a limited partner of one or more investment partnerships.

      (b) (1) With respect to income years commencing on or after January 1, 1989, and prior to January 1, 1992, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, an additional tax in an amount equal to twenty per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.

      (2) With respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, an additional tax in an amount equal to ten per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.

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

      (4) With respect to income years commencing on or after January 1, 2004, and prior to January 1, 2005, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, an additional tax in an amount equal to twenty-five per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax, except that any company that pays the minimum tax of two hundred fifty dollars under section 12-219 or 12-223c for such income year shall not be subject to the additional tax imposed by this subdivision. The additional amount of tax determined under this subdivision for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.

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

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

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

      (7) (A) With respect to income years commencing on or after January 1, 2012, and prior to January 1, 2014, any company subject to the tax imposed in accordance with subsection (a) of this section shall pay, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, an additional tax in an amount equal to twenty per cent of the tax calculated under said subsection (a) for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The additional amount of tax determined under this subsection for any income year shall constitute a part of the tax imposed by the provisions of said subsection (a) and shall become due and be paid, collected and enforced as provided in this chapter.

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

      (1949 Rev., S. 1897; 1951, 1953, June, 1955, S. 1089d; 1957, P.A. 515, S. 1; 649, S. 1; 1959, P.A. 394, S. 1; 510; 1961, P.A. 604, S. 2; February, 1965, P.A. 147; 461, S. 7; 1969, P.A. 674; June, 1969, P.A. 1, S. 13; 1971, P.A. 683, S. 1; June, 1971, P.A. 5, S. 111; 1972, P.A. 271, S. 1; 285, S. 6; P.A. 73-350, S. 6, 27; 73-442, S. 4; P.A. 75-101, S. 1, 2; 75-213, S. 1, 53; P.A. 77-476, S. 1, 3; 77-499, S. 1, 2; P.A. 80-406, S. 4, 5; 80-483, S. 54, 186; P.A. 81-472, S. 15, 159; June Sp. Sess. P.A. 83-1, S. 1, 15; P.A. 85-431, S. 1, 2; 85-474, S. 1, 2; P.A. 88-222, S. 1, 2; P.A. 89-16, S. 1, 31; 89-211, S. 22; 89-251, S. 20, 203; P.A. 90-28, S. 1; June Sp. Sess. P.A. 91-3, S. 99, 168; P.A. 92-152, S. 1; P.A. 93-74, S. 5, 67; 93-199, S. 4, 6; P.A. 94-4, S. 1, 2; May 25 Sp. Sess. P.A. 94-1, S. 45, 130; P.A. 95-160, S. 32, 69; P.A. 96-139, S. 12, 13; 96-197, S. 3, 11; P.A. 98-110, S. 13, 27; 98-244, S. 6, 35; June Sp. Sess. P.A. 98-1, S. 106, 121; P.A. 03-2, S. 32; June 30 Sp. Sess. P.A. 03-1, S. 87; P.A. 05-251, S. 62; P.A. 06-186, S. 66; June Sp. Sess. P.A. 09-3, S. 94; P.A. 11-6, S. 76.)

      History: 1959 acts changed technical language of statute, added exclusion in Subsec. (2) for companies which elect not to be subject to such tax, applied 3.75% rate to net income received in each year as opposed to only those years between 1953 and 1958; 1961 act added reference to chapter 212a, changed tax rate to 5% and changed technical language of statute; 1965 acts added Subdiv. (5) excepting nonprofit cooperative ownership housing corporations when residence is restricted to corporation members and corporation ownership is restricted to residents from payment of tax and restricted 5% tax rates to years beginning before January 1, 1966, and increased rates for years thereafter to 5.25%; 1969 acts specified stock and nonstock corporations in Subdiv. (5) and added Subdiv. (6) excepting cooperative housing corporations where there is no taxable income to corporation from payment of tax, added new Subdivs. (4) and (5) detailing companies formerly mentioned by chapter reference only in Subdiv. (3) and renumbering remaining Subdivs. accordingly, specified companies "not subject to the tax imposed by this part" in Subdiv. (6), formerly (4), changed tax rates in Subdiv. (7), formerly (5), to 5.25% for years beginning after January 1, 1971, and, in the case of companies other than telephone companies, made 5.25% rate applicable to years before January 1, 1969, and set rate for period between that date and January 1, 1971, at 8%; 1971 acts deleted proviso that minimum tax shall not be less than minimum tax under Sec. 12-219, substituted "additional" for "minimum" re tax under Sec. 12-219, deleted Subdiv. (5), renumbering following Subdivs. accordingly, and changed references to 1971 to 1973; 1972 acts included DISC companies in Subdiv. (2), changed tax rates in Subdiv. (7) to 8% without exception and deleted provisions concerning tax on telephone companies; P.A. 73-350 rewrote Subdiv. (1) to apply to insurance companies for years before January 1, 1973, and to insurance companies incorporated or organized under laws of other state or foreign company on or after that date, deleted Subdiv. (4) renumbering subsequent Subdivs. accordingly and added proviso that tax rate as of January 1, 1974, applicable to companies subject to tax under provisions of section will be 2%, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A. 73-442 included foreign municipal electric utilities under provisions of section and specifically excluded such utilities in Subdiv. (2) of exception; P.A. 75-101 added new Subdiv. (7) exempting organizations promoting success or defeat of political candidates, parties, questions, constitutional amendments etc. from payment of tax, effective May 12, 1975, and applicable to income years commencing on or after January 1, 1973; P.A. 75-213 changed 8% rate to 10% for income years beginning on or after January 1, 1975; P.A. 77-476 deleted references to foreign municipal electric utilities; P.A. 77-499 required payment for owning or leasing property in state in corporate capacity or as unincorporated association taxable for federal income tax purposes or for maintaining an office in state; P.A. 80-406 added Subdiv. (8) exempting certain companies engaged in research, design, manufacture, sale or installation of alternative energy systems from payment of tax until July 1, 1985; P.A. 80-483 deleted reference to building and loan associations; P.A. 81-472 made technical changes; June Sp. Sess. P.A. 83-1 increased the rate of tax from 10% to 11.5%, effective July 1, 1983, and applicable to income years of corporations commencing on or after January 1, 1983; P.A. 85-431 added provision allowing for retroactive exemption to date of incorporation for certain nonprofit corporations; P.A. 85-474 provided that exemption under Subdiv. (8) for alternative energy system companies shall not be allowed with respect to any income year commencing on or after January 1, 1988, instead of after July 1, 1985; P.A. 88-222 expanded the corporate tax exemption of Subdiv. (8) to include any company which is not owned or controlled, directly or indirectly, by any other company and extended the exemption until January 1, 1993, effective May 28, 1988, and applicable to income years of corporations commencing on or after January 1, 1988; P.A. 89-16 added Subsec. (b) imposing an additional tax as a percentage of the tax under Subsec. (a), effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89-251 amended Subsec. (b) by increasing the additional tax imposed under Sec. 1 of P.A. 89-16 from 15% to 20% of the tax calculated under Subsec. (a), effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-28 made technical changes in the list of corporations in Subsec. (a) not subject to tax; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to provide that the 20% additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a 10% additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 92-152 added new Subsec. (a)(8) exempting corporation engaged in the research, design, manufacture or sale of aero-derived gas turbine systems and extended the exemptions for Subdivs. (7) and (8) until January 1, 1998; P.A. 93-74 added provisions reducing tax rates commencing on and after January 1, 1995, effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1995; P.A. 93-199 expanded exemption in Subdiv. (7) to include companies engaged in research, design, manufacture, sale or installation of motor vehicles powered by electricity, natural gas or solar energy, effective July 1, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A. 94-4 in Subdiv. (5) of Subsec. (a) eliminated provision requiring cooperative housing corporations to have no taxable income, effective April 7, 1994, and applicable for income years commencing on or after January 1, 1990; May Sp. Sess. P.A. 94-1 amended Subsec. (a) to conform section with revisions made in Sec. 5 of P.A. 93-74, effective April 7, 1994; P.A. 95-160 amended Subsec. (a) to decrease tax rate from 11% to 10.75% for the income years commencing on or after January 1, 1996, and prior to January 1, 1997, 9.5% for the income years commencing on or after January 1, 1998, and prior to January 1, 1999, 8.5% for the income years commencing on or after January 1, 1999, and prior to January 1, 2000, and 7.5% for income years commencing on or after January 1, 2000, effective June 1, 1995; P.A. 96-139 amended effective date of P.A. 95-160 to clarify applicability to income years commencing on or after January 1, 1996; P.A. 96-197 amended Subsec. (a) to reorganize provisions and added Subdiv. (3) re general partners of a partnership and made other technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 amended Subsec. (a)(2) to exempt domestic insurance companies and make technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; P.A. 98-244 amended Subsec. (a)(2) to exempt S corporations from the minimum tax under Sec. 12-219 for income years commencing on or after January 1, 2001, and to exempt foreign-sourced income of non-United-States corporations from the corporation business tax, effective June 8, 1998, and applicable to income years commencing on or after January 1, 1998; June Sp. Sess. P.A. 98-1 amended Subsec. (a)(2) to add commodities, effective June 24, 1998; P.A. 03-2 added Subsec. (b)(3) re surcharge for the 2003 income year, effective February 28, 2003, and applicable to income years commencing on or after January 1, 2003; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (b) to include in surcharge provided under Subdiv. (3) amounts calculated under Sec. 91 of P.A. 03-1 of the June 30 special session and to add Subdiv. (4) re surcharge for the 2004 income year, effective August 16, 2003, and applicable to income years commencing on or after January 1, 2003; P.A. 05-251 amended Subsec. (b) by deleting references to Sec. 91 of June 30 Sp. Sess. P.A. 03-1 in Subdivs. (3) and (4) and by adding Subdivs. (5) and (6) re surcharge for 2006 and 2007 income years, respectively, effective June 30, 2005, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 deleted former Subsec. (b)(6) re surcharge in income years commencing on or after January 1, 2007, and prior to January 1, 2008, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; June Sp. Sess. P.A. 09-3 amended Subsec. (b) to add Subdiv. (6) re surcharge for 2009, 2010 and 2011 income years and exemption for companies with gross income less than $100,000,000, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009; P.A. 11-6 amended Subsec. (b) to add Subdiv. (7) re 20% surcharge for 2012 and 2013 income years and exemption for companies with gross income less than $100,000,000, effective May 4, 2011, and applicable to income years commencing on or after January 1, 2011.

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

      (b) The provisions of subsection (a) of this section shall not apply to any company that is treated as a foreign corporation under the Internal Revenue Code and has no income effectively connected with a United States trade or business. To the extent that a company that is treated as a foreign corporation under the Internal Revenue Code has income effectively connected with a United States trade or business, such company's gross income, notwithstanding any provision of this chapter, shall be its income effectively connected with its United States trade or business. For net income tax apportionment purposes, only property used in, payroll attributable to and receipts effectively connected with such company's United States trade or business shall be considered for purposes of calculating such company's apportionment fraction. "Income effectively connected with a United States trade or business" shall be determined in accordance with the provisions of the Internal Revenue Code.

      (June Sp. Sess. P.A. 09-3, S. 90; P.A. 11-61, S. 55.)

      History: June Sp. Sess. P.A. 09-3 effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010; P.A. 11-61 designated existing provisions as Subsec. (a), replaced ", or" with "and" therein and added Subsec. (b) re applicability to companies treated as foreign corporations by the Internal Revenue Code, effective June 21, 2011, and applicable to income years commencing on or after January 1, 2011.

      Sec. 12-217. Deductions from gross income. Net income of S corporations. Regulations. (a)(1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (iv) in the case of any captive real estate investment trust, the deduction for dividends paid provided under Section 857(b)(2) of the Internal Revenue Code, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land, and (F) in the case of manufacturers, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made.

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

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

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

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

      (b) (1) For purposes of determining net income under this section, the deduction allowed for depreciation shall be determined as provided under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, provided in making such determination, the provisions of Section 168(k) of said code shall not apply.

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

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

      (c) (1) Notwithstanding the provisions of subsections (a) and (b) of this section, "net income", in the case of an S corporation, means the percentage of the nonseparately computed income or loss, as defined in Section 1366(a)(2) of the Internal Revenue Code, of such S corporation, without separate state adjustment pursuant to section 12-233 or 12-226a for the compensation of any officer or employee, to which shall be added (A) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and (B) any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year as provided in subdivision (2) of this subsection.

      (2) For income years commencing prior to January 1, 1997, "net income" means one hundred per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1997, and prior to January 1, 1998, "net income" means ninety per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1998, and prior to January 1, 1999, "net income" means seventy-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 1999, and prior to January 1, 2000, "net income" means fifty-five per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2000, and prior to January 1, 2001, "net income" means thirty per cent of the amount computed under subdivision (1) of this subsection; for income years commencing on or after January 1, 2001, net income of S corporations as computed under subdivision (1) of this subsection shall not be subject to the tax under this chapter. Any S corporation subject to the tax on net income as provided in this section shall be eligible for any credit against the tax otherwise available to taxpayers under this chapter only to the extent and in the same percentage as net income of such S corporation is subject to taxation under this chapter, except that any S corporation with an income year commencing on or after January 1, 1999, but before December 31, 2000, shall be eligible for the entire credit available under sections 8-395, 12-633, 12-634, 12-635 and 12-635a.

      (d) The commissioner may adopt regulations in accordance with chapter 54, relating to mergers or consolidations of corporations providing for the deduction, by the surviving or new corporation provided for in the plan of consolidation, of operating losses that were incurred by a merging or consolidating corporation, respectively, before the merger or consolidation, respectively. Such regulations may follow the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or the regulations thereunder.

      (1949 Rev., S. 1898; 1949, S. 1093d; 1957, P.A. 560, S. 8; 1961, P.A. 428, S. 2; 1963, P.A. 651, S. 1; 1971, P.A. 461; June, 1971, P.A. 8, S. 28; 1972, P.A. 285, S. 12; P.A. 73-350, S. 8, 27; P.A. 77-16, S. 1, 2; 77-550, S. 1, 2; P.A. 80-483, S. 55, 186; P.A. 81-66, S. 1, 5; 81-245, S. 2, 4; 81-411, S. 1, 42; Nov. Sp. Sess. P.A. 81-7, S. 1, 3; P.A. 85-159, S. 1, 19; 85-469, S. 4, 6; P.A. 89-211, S. 23; 89-251, S. 22, 203; June Sp. Sess. P.A. 91-3, S. 100, 168; P.A. 93-74, S. 6, 67; 93-332, S. 9, 12, 42; 93-435, S. 64, 95; P.A. 96-175, S. 1, 5; 96-197, S. 4, 11; P.A. 97-119, S. 1, 2; 97-283, S. 1, 2; P.A. 99-83, S. 1, 2; 99-173, S. 39, 65; 99-235, S. 5, 7; P.A. 00-170, S. 24, 42; May 9 Sp. Sess. P.A. 02-1, S. 56; June Sp. Sess. P.A. 09-3, S. 95; June 19 Sp. Sess. P.A. 09-2, S. 4; P.A. 10-188, S. 2, 3; P.A. 11-140, S. 5.)

      History: 1961 act added Subdiv. (2); 1963 act extended exception in Subdiv. (2) to all taxpayers for year 1963 and thereafter; 1971 acts added provisions applicable to taxpayers whose income reported in consolidated return and changed 2.5% rate to 60% for banking institutions beginning in 1971 income year, deleting obsolete reference to January 1, 1962; 1972 act deleted mutual banks and trust companies in Subdiv. (2), included building and loan associations and increased 60% interest by 10% each year beginning in 1973 until 100% level reached; P.A. 73-350 changed 5% rate for other taxpayers to 90% in 1973 and 100% thereafter, added provisions re operating losses and net capital losses, added phrase re taxpayers who file as part of consolidated return with federal government but not with the state and added provision clarifying applicability of provisions to life insurance companies; P.A. 77-16 added provisions specially applicable to regulated investment companies, effective March 29, 1977, and applicable to income years commencing on and after January 1, 1977; P.A. 77-550 added provisions calling for consideration of excess of deductions allocated and apportioned to state under Sec. 12-218 as operating loss; P.A. 80-483 made technical changes; P.A. 81-66 eliminated Connecticut corporation business tax paid in the income year as a deduction from gross income in determining taxable income under said tax, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-245 added a deduction for the gross income attributable to an international banking facility, provided no expense or loss attributable to such facility shall be a deduction, effective upon adoption by the Board of Governors of the Federal Reserve System of amendments to Regulations D and Q pertaining to international banking facilities (adopted June 9, 1981, with an effective date of December 3, 1981); P.A. 81-411 allowed dividends received to be deducted from gross income and provided that net income be apportioned only, eliminating references to allocation, effective June 18, 1981, and applicable to income years commencing on or after December 28, 1980; Nov. Sp. Sess. P.A. 81-7 amended section to permit deductions for depreciation, adding Subpara. (2) of Subdiv. (1) in previously existing provisions designated as Subsec. (a) and Subsec. (b) detailing such deductions, effective January 27, 1982, and applicable to corporations' income years commencing on or after January 1, 1981; P.A. 85-159 provided for a depreciation deduction for income years commencing in 1985 of 88% of the amount of the deduction allowed for federal income tax purposes; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89-251 amended Subsec. (a) by adding to the list of items deductible from gross income in determining net income under the federal income tax which may not be so deducted for purposes of the Connecticut tax on net income of corporations, the following: Taxes in any state or political subdivision thereof imposed on or measured by the income or profits of a corporation, effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to provide for the nondeductibility of 30% of dividends received from a domestic corporation in which the taxpayer owns less than 20% of the total voting power and value of the stock of such corporation and added Subsec. (c) concerning net income of S corporations, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 specified that with respect to nonlife insurance companies the unpaid loss reserve adjustment shall not be made, effective May 19, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A. 93-332 made technical change in language added in Sec. 6 of P.A. 93-74 to specify that with respect to nonlife insurance companies the unpaid loss reserve adjustment shall not be made and amended Subsec. (c) to prohibit any separate state adjustment to the net income of an S corporation with respect to the compensation of any officer or employee, effective June 25, 1993, and applicable to taxable years on or after January 1, 1993; P.A. 93-435 made a technical change in Subsec. (a), effective June 28, 1993; P.A. 96-175 amended Subsec. (c) by adding Subdiv. (2) re phase-out of net income, effective May 31, 1996, and applicable to income years commencing on or after January 1, 1997; P.A. 96-197 added Subsec. (d) to permit commissioner to adopt regulations relating to mergers and consolidations, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 97-119 added Subsec. (a)(3) re real estate investment trusts and made technical and renumbering changes, effective June 6, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 97-283 amended Subsec. (c) to make any S corporation subject to tax on net income eligible for credits against tax in the same percentage as net income subject to tax under chapter, effective June 26, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 99-83 amended Subsec. (c) to add exception for S corporations with income year commencing on or after January 1, 1999, but prior to December 31, 2000, effective June 3, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 99-173 amended Subsec. (a) to extend the net operating loss carry forward provision from five to twenty years applicable to losses incurred on or after January 1, 2000, and provide a deduction for gains realized from sale of open space land, effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 99-235 amended Subsec. (a)(1)(E) to replace "watershed" with "water company", effective June 29, 1999; P.A. 00-170 amended Subsec. (c) to allow S corporations to be eligible for credits under Sec. 8-395 for income years commencing on and after January 1, 1999, but before December 31, 2000, effective May 26, 2000, and applicable to income years commencing on or after January 1, 2000; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (b) to delete former Subdivs. (1) and (2) and provide for a depreciation deduction to be determined as provided under the Internal Revenue Code, except that Section 168(k) of said code shall not apply, effective July 1, 2002, and applicable to property placed in service after September 10, 2001, in income years ending after said date; June Sp. Sess. P.A. 09-3 amended Subsec. (a)(1) by adding Subpara. (A)(iii) re qualified domestic production activities income, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009; June 19 Sp. Sess. P.A. 09-2 amended Subsec. (b) by designating existing provision as Subdiv. (1) and adding Subdiv. (2) re treatment of income from discharge of indebtedness, effective June 22, 2009, and applicable to taxable years ending after December 31, 2008; P.A. 10-188 amended Subsec. (a)(1) to add Subpara. (A)(iv) re deduction for dividends paid in the case of any captive real estate investment trust, and added Subsec. (a)(3)(C) re dividend received from a captive real estate investment trust, effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010; P.A. 11-140 amended Subsec. (a)(1) to add Subpara. (F) re contribution to manufacturing reinvestment account, effective July 1, 2011, and applicable to income years commencing on or after January 1, 2012 (Revisor's note: An internal reference in P.A. 11-140, S. 5, to "section 5 of this act" was determined by the Revisors to properly refer to section 4 of said act and was therefore codified in Subsec. (a)(1)(F) as "section 32-9zz").

      Sec. 12-217e. Tax credits for certain manufacturing, service and eligible facilities. (a) There shall be allowed as a credit against the tax imposed by this chapter an amount equal to twenty-five per cent of that portion of such tax which is allocable to any manufacturing facility, provided, for any such facility which is located in an enterprise zone designated pursuant to section 32-70 or in a municipality with an entertainment district designated under section 32-76 or established under section 2 of public act 93-311* and which became eligible as a manufacturing facility after the designation of such zone and for which not less than one hundred fifty full-time employees or thirty per cent of the full-time employment positions directly attributable to the manufacturing facility were, during the last quarter of the income year of the taxpayer, held by employees of the taxpayer who at the time of employment were (1) residents of such zone, or (2) residents of such municipality and eligible for training under the Federal Comprehensive Employment Training Act or any other training program that may replace the Comprehensive Employment Training Act, a credit of fifty per cent shall be allowed. A position is directly attributable to the manufacturing facility if: (A) The work is performed or the base of operations is at the facility; (B) the position did not exist prior to the construction, renovation, expansion or acquisition of the facility; and (C) but for the construction, renovation, expansion or acquisition of the facility, the position would not have existed, provided nothing in this section shall preclude a position from being considered directly attributable to a manufacturing facility if such position formerly existed in an eligible manufacturing facility in the same municipality under section 32-9p. For income years commencing on and after January 1, 2012, the credit under this section for that portion of the tax imposed by this chapter, which is allocable to any manufacturing facility shall be available under the same terms and conditions to that portion of such tax which is allocable to an eligible facility. For purposes of this section, "eligible facility" means any facility described in subparagraph (D) of subdivision (2) of subsection (d) of section 32-9p.

      (b) There shall be allowed as a credit against the tax imposed by this chapter an amount equal to the following percentage of that portion of such tax which is allocable to any service facility: (1) Fifteen per cent, if there are three hundred or more but not more than five hundred ninety-nine new employees working at such facility; (2) twenty per cent if there are six hundred or more but not more than eight hundred ninety-nine new employees working at such facility; (3) twenty-five per cent, if there are nine hundred or more but not more than one thousand one hundred ninety-nine new employees working at such facility; (4) thirty per cent if there are one thousand two hundred or more but not more than one thousand four hundred ninety-nine new employees working at such facility; (5) forty per cent, if there are one thousand five hundred or more but not more than one thousand nine hundred ninety-nine new employees working at such facility; or (6) fifty per cent if there are two thousand or more new employees working at such facility. As used in this subsection: (A) "New employee" means a person hired by a taxpayer to fill a position for a new job or a person shifted from an existing location of the taxpayer outside this state to a service facility in this state, provided (i) in no case shall the total number of new employees allowed for purposes of this credit exceed the total increase in the taxpayer's employment in this state, which increase shall be the difference between (I) the number of employees employed by the taxpayer in this state at the time of application to the Commissioner of Revenue Services for such credit plus the number of new employees who would be eligible for inclusion under the credit allowed under this subsection without regard to this calculation, and (II) the highest number of employees employed by the taxpayer in this state in the year preceding the taxpayer's application to the Commissioner of Revenue Services for such credit, and (ii) a person shall be deemed to be a "new employee" only if such person's duties in connection with the operation of the facility are on a regular, full-time or equivalent or full-time and permanent basis; and (B) "new job" means a job that did not exist in the business of a taxpayer in this state prior to the taxpayer's application to the Commissioner of Revenue Services for such credit and that is filled by a new employee, but does not include a job created when an employee is shifted from an existing location of the taxpayer in this state to a service facility.

      (c) The portion of such tax which is allocable to such a manufacturing facility, service facility or eligible facility shall be determined by multiplying such tax by a fraction computed as the simple arithmetical mean of the following fractions: First, a fraction the numerator of which is the average monthly net book value in the income year of the manufacturing facility, service facility or eligible facility, and machinery and equipment acquired for and installed in the manufacturing facility, service facility or eligible facility, without deduction on account of any encumbrance thereon, or if rented to the taxpayer, the value of the manufacturing facility, service facility or eligible facility, and machinery and equipment acquired for and installed in the manufacturing facility, service facility or eligible facility, computed by multiplying the gross rents payable by the taxpayer for the manufacturing facility, service facility or eligible facility, and such machinery and equipment during the income year or period by eight, and the denominator of which is the sum of the average monthly net book value of all real property and machinery and equipment held and owned by the taxpayer in the state, without deduction on account of any encumbrance thereon and the value of all real property and machinery and equipment rented to the taxpayer in the state, computed by multiplying the gross rents payable during the income year by eight; and second, a fraction the numerator of which is all wages, salaries and other compensation paid during the income year to employees of the taxpayer whose positions are directly attributable to the manufacturing facility, service facility or eligible facility and the denominator of which is the wages, salaries and other compensation paid during the income year to all employees of the taxpayer in the state. An employee's position is directly so attributable if (1) the employee's service is performed or his base of operations is at the manufacturing facility, service facility or eligible facility, (2) the position did not exist prior to the construction, renovation, expansion or acquisition of the manufacturing facility, service facility or eligible facility, and (3) but for the construction, renovation, expansion or acquisition of the manufacturing facility, service facility or eligible facility the position would not have existed. For the purposes of this subsection, "gross rents" means gross rents as defined in section 12-218.

      (d) The credit allowed by this section may be claimed only by the initial occupant or occupants of the manufacturing facility, service facility or eligible facility. The owner of the manufacturing facility, service facility or eligible facility may not claim the credit unless the owner is also an occupant. The credit may first be claimed on the tax return for the taxpayer's income year which begins during the calendar year next succeeding the calendar year in which the taxpayer was issued an eligibility certificate, and may be claimed in each of the following nine income years. If within such period, however, any facility for which an eligibility certificate has been issued ceases to qualify as a manufacturing facility, service facility or eligible facility, or any occupant of a manufacturing facility, service facility or eligible facility ceases to be an occupant, the entitlement to the credit allowed by this section shall terminate in the income year in which the qualification or occupancy ceases, and there shall not be a pro rata application of the credit to such income year.

      (e) Any subsequent occupant or occupants of a manufacturing facility, service facility or eligible facility for which an eligibility certificate has been issued may claim the credit allowed by this section in accordance with subsection (c) of this section but only after obtaining a new eligibility certificate with respect to the manufacturing facility, service facility or eligible facility being occupied in the manner provided in section 32-9r.

      (f) The Commissioner of Economic and Community Development shall, upon request, provide a copy of the applicable eligibility certificate to the Commissioner of Revenue Services.

      (P.A. 78-303, S. 85, 136; 78-357, S. 7, 16; P.A. 81-445, S. 4, 11; P.A. 82-435, S. 3, 8; P.A. 83-381, S. 2; 83-587, S. 26, 96; P.A. 90-270, S. 23, 38; P.A. 93-311, S. 6, 8; P.A. 94-247, S. 5, 8; P.A. 96-239, S. 12, 17; P.A. 97-295, S. 14, 25; P.A. 98-262, S. 14, 22; P.A. 00-174, S. 22, 83; P.A. 06-159, S. 7; P.A. 10-98, S. 4; P.A. 11-78, S. 2.)

      *Note: Section 2 of public act 93-311 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.

      History: P.A. 78-303 allowed substitution of commissioner of revenue services for tax commissioner in accordance with provisions of P.A. 77-614; P.A. 81-445 included provisions allowing double credit for certain facilities in enterprise zones in Subsec. (a), effective July 1, 1982; P.A. 82-435 amended Subsec. (a) to provide that the 30% determination for employees of facilities in enterprise zones will be made for the last quarter rather than the last day of the year and to provide that CETA eligible residents of the municipality, along with residents of the zone, will count toward the 30%; P.A. 83-381 amended Subsec. (a) concerning the determination of eligibility for credit for facilities in enterprise zones; P.A. 83-587 made technical changes in Subsec. (b); P.A. 90-270 amended Subsec. (a) by making businesses employing more than 150 full-time employees eligible for the tax credit; P.A. 93-311 amended Subsec. (a) to extend eligibility for the tax credit to manufacturing facilities located in entertainment districts, effective July 1, 1993; P.A. 94-247 made facilities located in an entertainment district established pursuant to Sec. 2 of public act 93-311 eligible for the credit, effective June 9, 1994; P.A. 96-239 inserted new Subsec. (b) authorizing tax credit against certain percentages of the tax imposed by Ch. 208 which is allocable to a service facility, relettered former Subsecs. (b) to (e), inclusive, as Subsecs. (c) to (f), inclusive, respectively, and amended relettered Subsecs. (c), (d) and (e) by adding references to "service facility", effective July 1, 1996; P.A. 97-295 amended Subsec. (d) to reword provision re when credit may first be claimed, effective July 8, 1997, and applicable to tax returns filed for income years of corporations commencing on or after January 1, 1997; P.A. 98-262 revised effective date of P.A. 97-295, but without affecting this section; P.A. 00-174 amended Subsec. (a) to add a provision allowing a position to be attributable to a manufacturing facility if it formerly existed in an eligible facility in the same municipality, effective May 26, 2000; P.A. 06-159 amended Subsec. (f) to require Commissioner of Economic and Community Development, rather than taxpayer, to provide copy of certificate, effective June 6, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 10-98 amended Subsec. (a) to add provisions re credit for portion of tax allocable to a manufacturing facility shall be available under same terms and conditions to portion of tax allocable to an eligible facility in income years commencing on and after January 1, 2012, and added references to eligible facility in Subsecs. (c), (d) and (e), effective October 1, 2011, and applicable to income years commencing on or after January 1, 2013; P.A. 11-78 changed effective date of P.A. 10-98, S. 4, from October 1, 2011, and applicable to income years commencing on or after January 1, 2013, to October 1, 2011, and applicable to income years commencing on or after January 1, 2012, effective July 1, 2011.

      Sec. 12-217ii. Jobs creation tax credit program. (a) As used in this section:

      (1) "Commissioner" means the Commissioner of Economic and Community Development;

      (2) "Income year" means, with respect to entities subject to the insurance premiums tax under chapter 207, the corporation business tax under this chapter or the utility companies tax under chapter 212, the income year as determined under each of said chapters, as the case may be;

      (3) "Taxpayer" means a person subject to tax under chapter 207, this chapter or chapter 212;

      (4) "New job" means a full-time job which (A) did not exist in this state prior to a taxpayer's application to the commissioner for an eligibility certificate under this section for a job creation credit, and (B) is filled by a new employee;

      (5) "New employee" means a person hired by the taxpayer to fill a new full-time job. A new employee does not include a person who was employed in Connecticut by a related person with respect to the taxpayer during the prior twelve months;

      (6) "Full-time job" means a job in which an employee is required to work at least thirty-five or more hours per week. A full-time job does not include a temporary or seasonal job;

      (7) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, or (D) a member of the same controlled group as the taxpayer; and

      (8) "Control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(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, other than paragraph (3) of said Section 267(c).

      (b) (1) There is established a jobs creation tax credit program whereby a taxpayer who creates at least ten new jobs in Connecticut may be allowed a credit against the tax imposed under chapter 207, this chapter or chapter 212, in an amount up to sixty per cent of the income tax deducted and withheld from the wages of new employees and paid over to the state pursuant to chapter 229.

      (2) For each new employee, credits may be granted for five successive years.

      (3) The credit shall be claimed in the income year in which it is earned. Any credits not used in a tax year shall expire.

      (c) Any taxpayer planning to claim a credit under the provisions of this section shall apply to the commissioner in accordance with the provisions of this section. The application shall be on a form provided by the commissioner, and shall contain sufficient information concerning the number of new jobs to be created, feasibility studies or business plans for the increased number of jobs, projected state and local revenue that might derive as a result of the job growth and other information necessary to demonstrate that there will be net benefits to the economy of the municipality and the state. The commissioner shall impose a fee for such application as the commissioner deems appropriate.

      (d) The commissioner shall determine whether (1) the taxpayer making the application is eligible for the tax credit, and (2) the proposed job growth (A) is economically viable only with use of the tax credit, (B) would provide a net benefit to economic development and employment opportunities in the state, and (C) conforms to the state plan of conservation and development prepared pursuant to section 16a-24. The commissioner may require the applicant to submit such additional information as may be necessary to evaluate the application.

      (e) (1) The commissioner, upon consideration of the application and any additional information the commissioner requires, may approve the credit application, in whole or in part, if the commissioner concludes that the increase in the number of jobs is economically viable only with the use of the tax credit and that the revenue generated due to economic development and employment opportunities created in the state exceeds the credit and any other credits to be taken. If the commissioner disapproves an application, the commissioner shall specifically identify the defects in the application and specifically explain the reasons for the disapproval. The commissioner shall render a decision on an application not later than ninety days after the date of its receipt by the commissioner.

      (2) The total amount of credits granted to all taxpayers under this section and sections 12-217nn, 12-217oo and 12-217pp shall not exceed twenty million dollars in any one fiscal year.

      (3) (A) A credit under this section may be granted to a taxpayer for not more than five successive income years. No credit under this section shall be granted to a taxpayer more than five income years after the date the commissioner issues an eligibility certificate to the taxpayer under subsection (f) of this section.

      (B) The commissioner shall not issue any eligibility certificates under this section on or after January 1, 2012.

      (4) The commissioner may combine approval of a credit application with the exercise of any of the commissioner's other powers, including, but not limited to, the provision of other forms of financial assistance.

      (f) Upon approving a taxpayer's credit application, the commissioner shall issue a credit allocation notice certifying that the credits will be available to be claimed by the taxpayer if the taxpayer otherwise meets the requirements of this section. No later than thirty days after the close of the taxpayer's income year, the taxpayer shall provide information to the commissioner regarding the number of new jobs created for the year and the income tax deducted and withheld from the wages of such new employees and paid over to the state for such year. The commissioner shall issue an eligibility certificate that includes the taxpayer's name, the number of new jobs created, and the amount of the credit certified for the year. The certificate shall be issued by the commissioner not later than sixty days after the close of the taxpayer's income year or not later than thirty days after the information is provided, whichever comes first.

      (g) The commissioner shall, upon request, provide a copy of the eligibility certificate issued under subsection (f) of this section to the Commissioner of Revenue Services.

      (h) (1) If (A) the number of new employees on account of which a taxpayer claimed the credit allowed by this section decreases to less than the number for which the commissioner issued an eligibility certificate during any of the four years succeeding the first full income year following the issuance of an eligibility certificate, and (B) those employees are not replaced by other employees who have not been shifted from an existing location of the taxpayer or a related person in this state, the taxpayer shall be required to recapture a percentage of the credit allowed under this section on its tax return, as determined under the provisions of subdivision (2) of this subsection. The commissioner shall provide notice of the required recapture amount to both the taxpayer and the Commissioner of Revenue Services.

      (2) If the taxpayer is required under the provisions of subdivision (1) of this subsection to recapture a portion of the credit during (A) the first of such four years, then ninety per cent of the credit allowed shall be recaptured on the tax return required to be filed for such year, (B) the second of such four years, then sixty-five per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, (C) the third of such four years, then fifty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year, (D) the fourth of such four years, then thirty per cent of the credit allowed for the entire period of eligibility shall be recaptured on the tax return required to be filed for such year.

      (P.A. 06-186, S. 80; P.A. 07-250, S. 18; P.A. 10-75, S. 10; P.A. 11-6, S. 130; 11-86, S. 3; Oct. Sp. Sess. P.A. 11-1, S. 20.)

      History: P.A. 06-186 effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 07-250 removed requirement re credit available only to taxpayers relocating to state, lowered job creation requirement from 50 to 10 new jobs, increased tax credit allowed from up to 25% to up to 60% of taxes deducted, added requirement that job growth conform to state plan of conservation and development and made conforming and technical changes, effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; P.A. 10-75 amended Subsec. (e)(2) to include Secs. 12-217nn and 12-217oo in cap and to increase cap from $10,000,000 to $11,000,000, effective May 6, 2010, and applicable to income years commencing on or after January 1, 2010; P.A. 11-6 amended Subsec. (e)(2) to increase cap on credits from $11,000,000 to $20,000,000, effective July 1, 2011; P.A. 11-86 amended Subsec. (e)(2) to delete references to Secs. 12-217nn and 12-217oo and to increase cap on credits from $11,000,000 to $20,000,000, effective July 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (e)(2) to include Sec. 12-217pp in cap, amended Subsec. (e)(3) to add provision re 5-income-year time limit for granting credit after issuance of eligibility certificate and sunset date of January 1, 2012, and made technical changes in Subsecs. (f) and (g), effective October 27, 2011.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

      (10) "Compensation" means base salary or wages and does not include bonus pay, stock options, restricted stock units or similar arrangements.

      (11) "Relocated television production" means:

      (A) An ongoing television program all of the prior seasons of which were filmed outside this state, and may include current events shows, except those referenced in subparagraph (B)(i) of this subdivision.

      (B) An eligible production company's television programming in this state that (i) is not a general news program, sporting event or game broadcast, and (ii) is created at a qualified production facility that has had a minimum investment of twenty-five million dollars made by such eligible production company on or after January 1, 2012, at which facility the eligible production company creates ongoing television programming as defined in subparagraph (A) of this subdivision, and creates at least two hundred new jobs in Connecticut on or after January 1, 2012. For purposes of this subdivision, "new job" means a full-time job, as defined in section 12-217ii, that did not exist in this state prior to January 1, 2012, and is filled by a new employee, and "new employee" includes a person who was employed outside this state by the eligible production company prior to January 1, 2012, but does not include a person who was employed in this state by the eligible production company or a related person, as defined in section 12-217ii, with respect to the eligible production company during the prior twelve months.

      (C) A relocated television production may be a state-certified qualified production for not more than ten successive income years, after which period the eligible production company shall be ineligible to resubmit an application for certification.

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

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

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

      (c) No eligible production company incurring an amount of production expenses or costs that qualifies for such credit shall be eligible for such credit unless on or after January 1, 2010, such company conducts (1) not less than fifty per cent of principal photography days within the state, or (2) expends not less than fifty per cent of postproduction costs within the state, or (3) expends not less than one million dollars of postproduction costs within the state.

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

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

      (e) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided (A) no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times, (B) in the case of a credit allowed for the income year commencing on or after January 1, 2011, and prior to January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than fifty per cent of such credit in any one income year, and (C) in the case of a credit allowed for an income year commencing on or after January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than twenty-five per cent of such credit in any one income year.

      (2) Notwithstanding the provisions of subdivision (1) of this subsection, any entity that is not subject to tax under this chapter or chapter 207 shall not be subject to the limitations on the transfer of credits provided in subparagraphs (B) and (C) of subdivision (1), provided such entity owns not less than fifty per cent, directly or indirectly, of a business entity subject to tax under section 12-284b.

      (3) Notwithstanding the provisions of subdivision (1) of this subsection, any qualified production that is created in whole or in significant part, as determined by the Commissioner of Economic and Community Development, at a qualified production facility shall not be subject to the limitations of subparagraph (B) or (C) of said subdivision (1). For purposes of this subdivision, "qualified production facility" means a facility (A) located in this state, (B) intended for film, television or digital media production, and (C) that has had a minimum investment of three million dollars, or less if the Commissioner of Economic and Community Development determines such facility otherwise qualifies.

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

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

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

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

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

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

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

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

      (P.A. 06-83, S. 20; 06-186, S. 83; 06-187, S. 79; P.A. 07-236, S. 1; June Sp. Sess. P.A. 07-4, S. 69, 70; June Sp. Sess. P.A. 07-5, S. 13; P.A. 08-142, S. 1; June Sp. Sess. P.A. 09-3, S. 97; Sept. Sp. Sess. P.A. 09-8, S. 1-3; P.A. 10-107, S. 1; June Sp. Sess. P.A. 10-1, S. 61; P.A. 11-6, S. 77; 11-61, S. 37; Oct. Sp. Sess. P.A. 11-1, S. 53.)

      History: P.A. 06-83 effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 amended Subsec. (a) to redefine "qualified production" by deleting exception and changing reference to obscene material and to redefine "production expenses or costs" by eliminating requirement that they be in cash, requiring intellectual property to be produced primarily in state, requiring expenditures to be incurred within state rather than paid to persons authorized to do business in state, eliminating provision allowing commissioner to determine other production expenses or costs, exempting talent fees and making technical changes, amended Subsec. (b) by replacing former provisions with provisions allowing any eligible production company to receive 30% credit and allowing a three-year carryforward, eliminated former Subsec. (c) re wage tax credit, redesignated existing Subsec. (d) as new Subsec. (c) and made conforming changes therein, eliminated former Subsec. (e) re carryforward period, inserted new Subsec. (d) re procedure upon transfer of credit, and redesignated existing Subsec. (f) as new Subsec. (e) and amended same to require the commission, in consultation with the commissioner, to adopt regulations, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; P.A. 06-187 amended Subsec. (f) to require the commission, in consultation with the commissioner, to adopt regulations, effective July 1, 2006 (Revisor's note: In Subsec. (a)(6)(A), a reference to "subsection (f) of this section" was changed editorially by the Revisors to "subsection (e) of this section", for accuracy); P.A. 07-236 amended Subsec. (a) to redefine "qualified production" and "production expenses or costs" and add definitions of "sound recording", "interactive web site" and "post-certification remedy", amended Subsec. (b) to divide existing provisions into Subdivs. (1) to (3) and, in Subdiv. (1), to apply credit to taxes due under chapter 207 and add Subpara. (A) re expenses or costs on and after January 1, 2009, and Subpara. (B) re expenses or costs on and after January 1, 2012, and, in Subdiv. (2), to limit credit transfers to three times, amended Subsec. (c) to add provisions in Subdiv. (1) to prohibit limit on listing expenses or costs on a tax credit voucher more than one once, to add new Subdiv. (2) re requirements for applying for tax credit vouchers, and to redesignate existing Subdiv. (2) as Subdiv. (3), amended Subsec. (d) to add provisions re second or third transfers, added new Subsec (e) re submission of false or fraudulent information and Subsec. (f) re post-certification remedy, redesignated existing Subsec. (e) as Subsec. (g) and made conforming changes throughout, effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; June Sp. Sess. P.A. 07-4 amended Subsec. (a) by making a technical change in Subdiv. (3)(A) and inserting "in the state" re expenditures incurred in Subdiv. (5), effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007, and amended Subsec. (c) by inserting "and independent certification" in Subdivs. (2) and (3), effective July 1, 2007; June Sp. Sess. P.A. 07-5 amended Subsec. (f) to substitute "commission" for "commissioner" re issuance of tax credit voucher and make technical changes, effective October 6, 2007; P.A. 08-142 amended Subsec. (b) by changing eligibility date in Subdiv. (1) from income years commencing on or after January 1, 2007, to income years commencing on or after January 1, 2006, and amending Subdivs. (2) and (3) to specify that provisions are applicable on and after July 1, 2006, for income years commencing on or after January 1, 2006, effective June 5, 2008; June Sp. Sess. P.A. 09-3 made changes throughout to transfer responsibility for program from Commission on Culture and Tourism to Department of Economic and Community Development, amended Subsec. (a) by deleting infomercials from definition of "qualified production" in Subdiv. (3)(A) and removing compensation in excess of $20,000,000 and costs of independent certification from definition of "production expenses or costs" in Subdiv. (5)(C), amended Subsec. (b)(1) by designating existing provisions re income years on or after January 1, 2006, as new Subpara. (A), amending same to make applicable prior to January 1, 2010, and replacing former Subparas. (A) and (B) with new Subparas. (B) to (D) re spending and in-state work required to qualify for credit, amended Subsec. (c) by deleting former Subdiv. (2) re interim voucher, redesignating existing Subdiv. (3) as Subdiv. (2), amending same to add provision re independent certification provided by audit professional chosen from list, and adding new Subdiv. (3) re administrative fee, amended Subsec. (e) by deleting "wilfully" re submission of information, and amended Subsec. (f) by replacing former provisions with provisions re post-certification remedy, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010; Sept. Sp. Sess. P.A. 09-8 amended Subsec. (b) by replacing "not less than five hundred thousand one dollars" with "more than five hundred thousand dollars" in Subdiv. (1)(B)(ii), adding provision re postproduction costs in Subdiv. (1)(C) and inserting "all or part of" re credit in Subdiv. (3), effective October 5, 2009; P.A. 10-107 amended Subsec. (a) by deleting "development" from definition of "production expenses or costs" in Subdiv. (5) and adding Subdiv. (10) defining "compensation", redesignated existing Subsec. (b)(1) as Subsec. (b) and made technical changes therein, redesignated existing Subsec. (b)(1)(C) as new Subsec. (c) and amended same by changing principal photography days requirement from 50% to 25% and adding "or (C) expends not less than one million dollars of postproduction costs within the state" and redesignated existing Subsecs. (b)(1)(D) to (g) as Subsecs. (d) to (k), effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010; June Sp. Sess. P.A. 10-1 made technical changes in Subsec. (c), effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010 (Revisor's note: In 2011, internal references to "subsection (c) of this section" in Subsec. (a)(5)(C)(vi) and "subsection (g) of this section" in Subsec. (a)(7)(A) were changed editorially by the Revisors to "subsection (g) of this section" and "subsection (k) of this section", respectively, to reflect changes made by P.A. 10-107); P.A. 11-6 amended Subsec. (c) by increasing from 25% to 50% the required principal photography days within the state, and amended Subsec. (e) by designating existing provisions as Subdiv. (1) and amending same to add Subparas. (B) and (C) re limits on transfer of credits and by adding Subdiv. (2) re exception to transfer limits, effective May 4, 2011, and applicable to income years commencing on or after January 1, 2011; P.A. 11-61 amended Subsec. (e) by adding new Subdiv. (2) re exception to limitations on transfer for certain entities, redesignating existing Subdiv. (2) as Subdiv. (3), and specifying in Subdiv. (3)(C) that determination is by the Commissioner of Economic and Community Development, effective July 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (a) by adding references to relocated television production in definition of "qualified production", and adding Subdiv. (11) defining "relocated television production", effective October 27, 2011.

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

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

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

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

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

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

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

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

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

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

      (4) All or part of any credit allowed pursuant to this section shall be claimed against the tax imposed under chapter 207 or this chapter for the income year in which expenditures were made for the infrastructure project, or in the three immediately succeeding income years.

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

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

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

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

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

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

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

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

      (P.A. 07-236, S. 2; June Sp. Sess. P.A. 07-5, S. 14; June Sp. Sess. P.A. 09-3, S. 98; P.A. 10-107, S. 2; Oct. Sp. Sess. P.A. 11-1, S. 55.)

      History: P.A. 07-236 effective July 1, 2007, and applicable to income years commencing on or after January 1, 2007; June Sp. Sess. P.A. 07-5 amended Subsec. (e) to substitute "commission" for "commissioner" re issuance of tax credit voucher and make technical changes, effective October 6, 2007; June Sp. Sess. P.A. 09-3 made changes throughout to transfer responsibility for program from Commission on Culture and Tourism to Department of Economic and Community Development, amended Subsec. (b)(1) by designating existing provisions as Subpara. (A), making conforming changes therein and adding Subpara. (B) re $3,000,000 threshold to qualify for credit on or after January 1, 2010, amended Subsec. (c) by changing completion amount required in Subdiv. (3) from 60% to 100% and adding Subdiv. (4) re administrative fee, and amended Subsec. (e) by replacing former provisions with provisions re post-certification remedy, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2010; P.A. 10-107 amended Subsec. (b)(2) by replacing "leased or purchased" with "a capital lease or purchase", effective July 1, 2010, and applicable to income years commencing on or after January 1, 2010; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (b)(4) to specify that all or part of credit must be claimed in the income year in which expenditures were made, or in the three immediately succeeding income years and to delete provision re amount of allowable credit exceeding sum of taxes due, effective October 27, 2011.

      Sec. 12-217nn. Qualified small business job creation tax credit program. (a) As used in this section:

      (1) "Commissioner" means the Commissioner of Economic and Community Development;

      (2) "Income year" means the income year or taxable year, as determined under this chapter or chapter 207 or 229, as the case may be;

      (3) "Qualified small business" means an employer, subject to tax under this chapter or chapter 207 or 229, who employs less than fifty employees in Connecticut on the date of its application under subsection (c) of this section;

      (4) "New employee" means a person hired after May 6, 2010, by the qualified small business during its income years commencing on or after January 1, 2010, and prior to January 1, 2013, to fill a new full-time job. A new employee does not include a person who was employed in Connecticut by a related person with respect to the qualified small business during the prior twelve months;

      (5) "Full-time job" means a job in which an employee is required to work at least thirty-five or more hours per week for not less than forty-eight weeks in a calendar year. "Full-time job" does not include a temporary or seasonal job;

      (6) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the qualified small business, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the qualified small business, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the qualified small business, or (D) a member of the same controlled group as the qualified small business; and

      (7) "Control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(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, other than paragraph (3) of Section 267(c) of said Internal Revenue Code.

      (b) (1) There is established a qualified small business job creation tax credit program for qualified small businesses whereby a qualified small business that hires a new employee who resides in the state may be allowed a tax credit against the tax imposed under this chapter or chapter 207 or 229, other than the liability imposed by section 12-707.

      (2) The tax credit shall be an amount equal to two hundred dollars per month for each new employee hired.

      (3) No tax credit shall be allowed for any new employee hired by a qualified small business in any income year commencing on or after January 1, 2013.

      (4) No qualified small business may claim a tax credit for any new employee who is an owner, member or partner in the business or who is not employed at the close of the income year of the qualified small business.

      (5) The qualified small business shall claim the tax credit for the income year in which the qualified small business hires a new employee and, if eligible, the two immediately succeeding income years. Any tax credit not used in an income year shall expire and shall not be refundable.

      (c) To be eligible to claim the tax credit, a qualified small business shall apply to the commissioner in accordance with the provisions of this section. The application shall be on a form provided by the commissioner and shall contain sufficient information as required by the commissioner, including the activities that the qualified small business primarily engages in, the North American Industrial Classification System code of the qualified small business, the current number of employees employed by the qualified small business as of the application date, and the name and position or job title of the new employee hired.

      (d) (1) Upon receipt of an application, the commissioner shall render a decision on the application, in writing, not later than thirty days after the date of its receipt by the commissioner. If the commissioner approves the application of the qualified small business, the commissioner shall issue a certification letter indicating that the tax credit will be available to be claimed by the qualified small business if the qualified small business otherwise meets the requirements of this section.

      (2) The total amount of tax credits granted under this section and sections 12-217ii, 12-217oo and 12-217pp shall not exceed twenty million dollars in any one fiscal year.

      (3) No qualified small business claiming the tax credit under this section with respect to a new employee may claim any credit against any tax under any other provision of the general statutes with respect to the same new employee.

      (e) If the qualified small business is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the qualified small business. If the qualified small business is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by the limited liability company's owner.

      (f) For a qualified small business subject to the tax imposed under chapter 229, no credit allowed under this section shall exceed the amount of tax imposed by said chapter. The commissioner shall annually provide to the Commissioner of Revenue Services a list detailing all tax credits that have been approved and all qualified small businesses that have been issued a certification letter under subsection (d) of this section.

      (P.A. 10-75, S. 8; P.A. 11-6, S. 131; Oct. Sp. Sess. P.A. 11-1, S. 21.)

      History: P.A. 10-75 effective May 6, 2010, and applicable to income years commencing on or after January 1, 2010; P.A. 11-6 amended Subsec. (d)(2) by increasing cap on credits from $11,000,000 to $20,000,000, effective July 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (d)(2) to include Sec. 12-217pp in cap, effective October 27, 2011.

      Sec. 12-217oo. Vocational rehabilitation job creation tax credit program. (a) As used in this section:

      (1) "Commissioner" means the Commissioner of Economic and Community Development;

      (2) "Employer" means a person engaged in business who has employees and who is subject to tax under this chapter or chapter 207 or 229;

      (3) "Income year" means the income year or taxable year, as determined under this chapter or chapter 207 or 229, as the case may be;

      (4) "New qualifying employee" means a person who (A) is receiving vocational rehabilitation services from the Bureau of Rehabilitative Services, and (B) is hired by the employer to fill a new job after May 6, 2010, during the employer's income years commencing on or after January 1, 2010, and prior to January 1, 2012. A new qualifying employee does not include a person receiving vocational rehabilitation services pursuant to subparagraph (A) of this subdivision and who was employed in this state by a related person with respect to the employer during the prior twelve months;

      (5) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the employer, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the employer, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the employer, or (D) a member of the same controlled group as the employer; and

      (6) "Control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, other than paragraph (3) of said Section 267(c).

      (b) (1) There is established a vocational rehabilitation job creation tax credit program for employers whereby an employer who hires a new qualifying employee who resides in this state and requires such employee to work at least twenty hours or more per week for not less than forty-eight weeks in a calendar year may be allowed a tax credit against the tax imposed under this chapter or chapter 207 or 229, other than the liability imposed by section 12-707.

      (2) The tax credit shall be an amount equal to two hundred dollars per month for each new qualifying employee hired.

      (3) No employer may claim a tax credit for any new qualifying employee who is an owner, member or partner in the business of the employer or who is not employed at the close of the income year of the employer.

      (4) The employer shall claim the tax credit for the income year in which the employer hires a new qualifying employee and, if eligible, the two immediately succeeding income years. Any tax credit not used in an income year shall expire and shall not be refundable.

      (c) To be eligible to claim the tax credit, an employer shall apply to the commissioner in accordance with the provisions of this section. The application shall be on a form provided by the commissioner and shall contain sufficient information as required by the commissioner, including the activities that the employer primarily engages in, the North American Industrial Classification System code of the employer and the name and position or job title of the new qualifying employee hired.

      (d) (1) Upon receipt of an application, the commissioner shall render a decision on the application, in writing, not later than thirty days after the date of its receipt by the commissioner. If the commissioner approves the application of the employer, the commissioner shall issue a certification letter indicating that the tax credit will be available to be claimed by the employer if the employer otherwise meets the requirements of this section.

      (2) The total amount of tax credits granted under this section and sections 12-217ii, 12-217nn and 12-217pp shall not exceed twenty million dollars in any one fiscal year.

      (3) No employer claiming the tax credit under this section, with respect to a new qualifying employee, may claim any credit against any tax under any other provision of the general statutes with respect to the same new qualifying employee.

      (e) If the employer is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the employer. If the employer is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by the limited liability company's owner.

      (f) For an employer subject to the tax imposed under chapter 229, no credit allowed under this section shall exceed the amount of tax imposed by chapter 229. The commissioner shall annually provide to the Commissioner of Revenue Services a list detailing all tax credits that have been approved and all employers that have been issued a certification letter under subsection (d) of this section.

      (g) No tax credit shall be allowed under this section for any new qualifying employee hired by an employer in any income year commencing on or after January 1, 2012.

      (P.A. 10-75, S. 9; June Sp. Sess. P.A. 10-1, S. 18; P.A. 11-6, S. 132; 11-44, S. 52; Oct. Sp. Sess. P.A. 11-1, S. 22.)

      History: P.A. 10-75 effective May 6, 2010, and applicable to income years commencing on or after January 1, 2010; June Sp. Sess. P.A. 10-1 amended Subsec. (a)(4) by redefining "new qualifying employee", effective June 22, 2010, and applicable to income years commencing on or after January 1, 2010; P.A. 11-6 amended Subsec. (d)(2) by increasing cap on credits from $11,000,000 to $20,000,000, effective July 1, 2011; P.A. 11-44 amended Subsec.(a)(4) by replacing "Bureau of Rehabilitation Services within the Department of Social Services or from the Board of Education and Services for the Blind" with "Bureau of Rehabilitative Services", effective July 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (a)(4)(B) to add sunset date of January 1, 2012, amended Subsec. (d)(2) to include Sec. 12-217pp in cap, and added Subsec. (g) re sunset date of January 1, 2012, effective October 27, 2011.

      Sec. 12-217pp. Job expansion tax credit program. (a) As used in this section:

      (1) "Commissioner" means the Commissioner of Economic and Community Development;

      (2) "Control", with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(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, other than paragraph (3) of said Section 267(c);

      (3) "Full-time job" means a job in which an employee is required to work at least thirty-five hours per week for not less than forty-eight weeks in a calendar year. "Full-time job" does not include a temporary or seasonal job;

      (4) "Income year" means, with respect to entities subject to the insurance premiums tax under chapter 207, the corporation business tax under this chapter, the utility companies tax under chapter 212 or the income tax under chapter 229, the income year as determined under each of said chapters, as the case may be;

      (5) "New employee" means a person who resides in this state and is hired by a taxpayer on or after January 1, 2012, and prior to January 1, 2014, to fill a new job. "New employee" does not include a person who was employed in this state by a related person with respect to a taxpayer during the prior twelve months;

      (6) "New job" means a job that did not exist in this state prior to a taxpayer's application to the commissioner for certification under this section for a job expansion tax credit, is filled by a new, qualifying or veteran employee, and (A) is a full-time job, or (B) in the case of a qualifying employee under subparagraph (B) of subdivision (7) of this subsection, is a job in which an employee is required to work at least twenty hours per week for not less than forty-eight weeks in a calendar year;

      (7) "Qualifying employee" means a new employee who, at the time of hiring by the taxpayer:

      (A) (i) Is receiving unemployment compensation, or (ii) has exhausted unemployment compensation benefits and has not had an intervening full-time job; or

      (B) Is receiving vocational rehabilitation services from the Bureau of Rehabilitative Services;

      (8) "Related person" means (A) a corporation, limited liability company, partnership, association or trust controlled by the taxpayer, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the taxpayer, or (D) a member of the same controlled group as the taxpayer;

      (9) "Taxpayer" means a person that (A) has been in business for at least twelve consecutive months prior to the date of the taxpayer's application to the commissioner for certification under this section for a job expansion tax credit, and (B) is subject to tax under this chapter or chapter 207, 212 or 229; and

      (10) "Veteran employee" means a new employee who, at the time of hiring by the taxpayer, is a member of, was honorably discharged from or released under honorable conditions from active service in the armed forces, as defined in section 27-103.

      (b) (1) There is established a job expansion tax credit program whereby a taxpayer may be allowed a credit against the tax imposed under this chapter or chapter 207, 212 or 229, other than the liability imposed by section 12-707, for each new, qualifying or veteran employee hired on or after January 1, 2012, and prior to January 1, 2014. For taxpayers that employ not more than fifty employees in full-time jobs in this state on the date of application to the commissioner for certification under this section, the creation of at least one new job in this state shall be required for said tax credit. For taxpayers that employ more than fifty, but not more than one hundred employees in full-time jobs in this state on the date of application to the commissioner for certification under this section, the creation of at least five new jobs in this state shall be required for said tax credit. For taxpayers that employ more than one hundred employees in full-time jobs in this state on the date of application to the commissioner for certification under this section, the creation of at least ten new jobs in this state shall be required for said tax credit.

      (2) For the purposes of determining the number of new jobs a taxpayer is required to create in order to claim a credit under this section, the number of employees working in full-time jobs the taxpayer employs in this state on the date of its application to the commissioner for certification under this section shall apply to such taxpayer for the duration of such certification.

      (c) The amount of the credit shall be:

      (1) Five hundred dollars per month for each new employee; or

      (2) Nine hundred dollars per month for each qualifying or veteran employee.

      (d) (1) The taxpayer shall claim the credit in the income year in which it is earned and, if eligible, in the two immediately succeeding income years. Any credit not claimed by the taxpayer in an income year shall expire and shall not be refundable.

      (2) If the taxpayer is an S corporation or an entity treated as a partnership for federal income tax purposes, the shareholders or partners of such taxpayer may claim the credit. If the taxpayer is a single member limited liability company that is disregarded as an entity separate from its owner, the limited liability company's owner may claim the credit.

      (3) No taxpayer shall claim a credit for any new, qualifying or veteran employee who is an owner, member or partner in the business or who is not employed by the taxpayer at the close of the taxpayer's income year.

      (4) No taxpayer claiming the credit under this section with respect to a new, qualifying or veteran employee shall claim any credit against any tax under any other provision of the general statutes with respect to the same new, qualifying or veteran employee.

      (e) (1) To be eligible to claim the credit, a taxpayer shall apply to the commissioner in accordance with the provisions of this section. The application shall be on a form provided by the commissioner and shall contain sufficient information as required by the commissioner, including, but not limited to, the activities that the taxpayer primarily engages in, the North American Industrial Classification System code of the taxpayer, the current number of employees employed by the taxpayer as of the application date, and if applicable, the name and position or job title of the new, qualifying or veteran employee. The commissioner shall consult with the Labor Commissioner, the director of the Bureau of Rehabilitative Services or the Commissioner of Veterans' Affairs, as applicable, for any verification the commissioner deems necessary of unemployment compensation or vocational rehabilitation services received by a qualifying employee, or of service in the armed forces of the United States by a veteran employee. The commissioner may impose a fee for such application as the commissioner deems appropriate.

      (2) Upon receipt of an application, the commissioner shall render a decision, in writing, on each completed application not later than thirty days after the date of its receipt by the commissioner. If the commissioner approves such application, the commissioner shall issue a certification letter to the taxpayer indicating that the credit will be available to be claimed by the taxpayer if the taxpayer and new, qualifying or veteran employee otherwise meets the requirements of this section.

      (f) (1) The total amount of credits granted under this section and sections 12-217ii, 12-217nn and 12-217oo shall not exceed twenty million dollars in any one fiscal year.

      (2) If a taxpayer was issued an eligibility certificate by the commissioner prior to January 1, 2012, to receive a jobs creation tax credit pursuant to section 12-217ii, the provisions of the tax credit program pursuant to said section 12-217ii shall apply to such taxpayer for the duration of the eligibility certificate.

      (3) If a taxpayer is issued a certification letter by the commissioner prior to January 1, 2013, to receive a qualified small business job creation tax credit pursuant to section 12-217nn, the provisions of the tax credit program pursuant to said section 12-217nn shall apply to such taxpayer for the duration of such certification.

      (4) If a taxpayer was issued a certification letter by the commissioner prior to January 1, 2012, to receive a vocational rehabilitation job creation tax credit pursuant to section 12-217oo, the provisions of the tax credit program pursuant to said section 12-217oo shall apply to such taxpayer for the duration of such certification.

      (g) No credit allowed under this section shall exceed the amount of tax imposed on a taxpayer under this chapter or chapter 207, 212 or 229. The commissioner shall annually provide to the Commissioner of Revenue Services a list detailing all credits that have been approved and all taxpayers that have been issued a certification letter under this section.

      (h) No credit shall be allowed under this section for any new jobs created on or after January 1, 2014.

      (Oct. Sp. Sess. P.A. 11-1, S. 19.)

      History: Oct. Sp. Sess. P.A. 11-1 effective January 1, 2012, and applicable to income or taxable years commencing on or after that date.

      Sec. 12-217zz. Limit on credits under this chapter. (a) Notwithstanding any other provision of law, and except as otherwise provided in subsection (b) of this section, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for any income year shall not exceed seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to such income year of the taxpayer prior to the application of such credit or credits.

      (b) (1) For an income year commencing on or after January 1, 2011, and prior to January 1, 2013, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such income year may exceed the amount specified in subsection (a) of this section only by the amount computed under subparagraph (A) of subdivision (2) of this subsection, provided in no event may the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such income year exceed one hundred per cent of the amount of tax due from such taxpayer under this chapter with respect to such income year of the taxpayer prior to the application of such credit or credits.

      (2) (A) The taxpayer's average monthly net employee gain for an income year shall be multiplied by six thousand dollars.

      (B) The taxpayer's average monthly net employee gain for an income year shall be computed as follows: For each month in the taxpayer's income year, the taxpayer shall subtract from the number of its employees in this state on the last day of such month the number of its employees in this state on the first day of its income year. The taxpayer shall total the differences for the twelve months in such income year, and such total, when divided by twelve, shall be the taxpayer's average monthly net employee gain for the income year. For purposes of this computation, only employees who are required to work at least thirty-five hours per week and only employees who were not employed in this state by a related person, as defined in section 12-217ii, within the twelve months prior to the first day of the income year may be taken into account in computing the number of employees.

      (C) If the taxpayer's average monthly net employee gain is zero or less than zero, the taxpayer may not exceed the seventy per cent limit imposed under subsection (a) of this section.

      (May 9 Sp. Sess. P.A. 02-1, S. 59; P.A. 11-6, S. 78.)

      History: May 9 Sp. Sess. P.A. 02-1 effective July 1, 2002, and applicable to income years commencing on or after January 1, 2002; P.A. 11-6 designated existing provisions as Subsec. (a) and amended same to add exception re Subsec. (b) provisions, and added Subsec. (b) re allowable credit for average monthly net employee gain in income years 2011 and 2012, effective May 4, 2011, and applicable to income years commencing on or after January 1, 2011.

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

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

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

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

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

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

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

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

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

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

      (7) (A) With respect to income years commencing on or after January 1, 2012, and prior to January 1, 2014, the additional tax imposed on any company and calculated in accordance with subsection (a) of this section shall, for each such income year, except when the tax so calculated is equal to two hundred fifty dollars, be increased by adding thereto an amount equal to twenty per cent of the additional tax so calculated for such income year, without reduction of the tax so calculated by the amount of any credit against such tax. The increased amount of tax payable by any company under this section, as determined in accordance with this subsection, shall become due and be paid, collected and enforced as provided in this chapter.

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

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

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

      (1949 Rev., S. 1900; 1951, 1953, June, 1955, S. 1096d; 1957, P.A. 560, S. 2; 649, S. 2; 1959, P.A. 394, S. 2; 1961, P.A. 428, S. 3; 604, S. 3; 1963, P.A. 141; February, 1965, P.A. 461, S. 8; June, 1969, P.A. 1, S. 15; 1971, P.A. 683, S. 2; June, 1971, P.A. 5, S. 112; 1972, P.A. 126, S. 1; 285, S. 7; P.A. 73-350, S. 11, 27; P.A. 75-213, S. 2, 53; P.A. 77-614, S. 139, 610; P.A. 78-121, S. 106, 113; P.A. 80-483, S. 56, 186; P.A. 81-66, S. 2, 5; 81-255, S. 22, 37; 81-411, S. 8, 42; Nov. Sp. Sess. P.A. 81-4, S. 30, 32; P.A. 82-325, S. 3, 7; P.A. 84-546, S. 32, 33, 173; P.A. 85-159, S. 2, 19; 85-469, S. 4, 6; P.A. 86-124, S. 1, 2; 86-132; 86-403, S. 131, 132; P.A. 89-16, S. 2, 31; 89-251, S. 21, 203; P.A. 90-174, S. 1, 3; June Sp. Sess. P.A. 91-3, S. 101, 168; P.A. 93-74, S. 8, 59, 67; May Sp. Sess. P.A. 94-4, S. 7, 85; P.A. 95-160, S. 64, 69; P.A. 96-197, S. 6, 11; P.A. 98-110, S. 19, 27; May 9 Sp. Sess. P.A. 02-1, S. 57; P.A. 03-2, S. 34; June 30 Sp. Sess. P.A. 03-1, S. 88; P.A. 05-251, S. 63; P.A. 06-186, S. 67; June Sp. Sess. P.A. 09-3, S. 102; P.A. 11-6, S. 79.)

      History: 1959 act applied tax to each income year, added reference to deferred and unrealized profits in Subdiv. (B)(a)(3) and to treasury stock in Subdiv. (B)(b)(2); 1961 acts raised alternative tax rate from 1.9 mills to 2.5 mills, added exception to minimum tax for banking and financial corporations, and changed technical language; 1963 act added exception for small business investment companies; 1965 act set deadline for 2.5 mill rate to years beginning before January 1, 1966, and raised mill rate to two and five-eighths thereafter, set same deadline for $25 minimum tax, raised to $30 thereafter and set same deadline for 2% tax re banking institutions, raised to 2.1% thereafter; 1969 act for two years, January 1, 1969, to January 1, 1971, changed rates above to four mills, $45 and 3.2% respectively; 1971 acts divided section into subsecs. and made basis for payments, the difference between tax imposed in Sec. 12-214 and tax calculated under Subdivs. (A) and (B) and changed ending dates for temporary increases in rates from 1971 to 1973; 1972 acts included maximum tax for income years beginning on or after January 1, 1972, for "any company, except companies subject to the gross earnings taxes under chapters 211 and 212, which, in arriving at net income ... is entitled to a deduction under section 12-217 for dividends as defined in the federal corporation income tax law" and made temporary increased tax rates the permanent rates; P.A. 73-350 made provisions applicable to years beginning on or after January 1, 1973, increased mill rate from 4 to 4.25 mills and specifically excluded regulated investment companies and real estate investment trusts, deleted par or face value of indebtedness and deferred and unrealized profits from calculation of taxable amount and set maximum and minimum charges of $100,000 and $50, respectively, and changed provisions formerly applicable to companies, "except companies subject to the gross earnings taxes under chapters 211 and 212" applicable to regulated investment companies or real estate investment trusts, set forth process for deriving amount subject to tax and established $50 minimum tax for such companies, increased figures in Subsec. (2)(B) from $45 to $50, changed rate for computation of interest and dividends from 2% to one-eighth of 1% and excluded insurance companies from provisions of section; P.A. 75-213 changed mill rate for companies other than regulated investment companies and real estate investment trusts from 0.25 mill to 0.31 mill and for regulated investment companies and real estate investment trusts from 0.4 to 0.5 mill, effective July 1, 1975, and applicable to income years commencing on or after January 1, 1975; P.A. 77-614 substituted commissioner of revenue services for tax commissioner, effective January 1, 1979; P.A. 78-121 deleted reference to private banks in Subsec. (1)(A); P.A. 80-483 deleted reference to building and loan associations in Subsec. (1)(A) and (2)(B); P.A. 81-66 raised mill rate in (1)(A) from 0.31 mill to 3.1 mills per dollar and increased minimum tax from $50 to $100, effective May 4, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-255 added the alternative computation of tax under Subdiv. (B) and increased the minimum tax to $250, effective July 1, 1981, and applicable to income years commencing on or after January 1, 1981; P.A. 81-411 added consideration of a loss for the income year in the alternative tax base under Subdiv. (B), and deleted provisions allowing deductions for contributions to retirement plan in determining salaries and other compensation, effective June 18, 1981, and applicable to income years commencing on or after January 1, 1981; Nov. Sp. Sess. P.A. 81-4 deleted Subsec. (1)(B) re alternative tax (if higher than that in Subdiv. (a)) consisting of 50% of corporation's net income or loss plus salaries and other compensation paid to elected or appointed corporation officers or to shareholders owning more than 1% of stock at rate of 5%, amending section accordingly, effective January 27, 1982, and applicable to income years commencing on or after January 1, 1983; P.A. 82-325 changed effective date of Nov. Sp. Sess. P.A. 81-4, but without affecting this section; P.A. 84-546 made technical change, substituting "scrip" for "script" in Subsec. (1); P.A. 85-159 reduced minimum tax to $100 for income years of corporations commencing on or after January 1, 1985; P.A. 85-469 revised effective date of P.A. 85-159 but without affecting this section; P.A. 86-124 revised section to conform to the style of the general statutes and amended Subsec. (a)(1)(C) to increase the maximum tax from $100,000 to $500,000, effective May 8, 1986, and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 86-132 deleted provision limiting the types of regulated investment companies or real estate investment trusts to which the provisions concerning those types of companies and trusts applied; P.A. 86-403 changed effective date of P.A. 86-132 from October 1, 1986, to May 23, 1986 and applicable to income years of corporations commencing on or after January 1, 1986; P.A. 89-16 increased the minimum tax from $100 to $250 in Subsecs. (a) and (b), and amended Subsec. (c) to impose an additional tax as a percentage of the tax calculated under Subsec. (a) or Subsec. (b), effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A. 89-251 increased the tax imposed under Subsec. (c), as amended by P.A. 89-16, as a percentage of the additional tax calculated under Subsec. (a) or Subsec. (b) from 15% to 20% of the additional tax, effective July 1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-174 amended Subsec. (a)(2) to provide for a maximum tax under said subdivision of $50,000, effective July 1, 1990, and applicable to income years of corporations commencing on or after January 1, 1991; June Sp. Sess. P.A. 91-3 amended Subsec. (a)(1)(C) to increase the maximum tax from $500,000 to $1,000,000 and Subsec. (c) to provide that the 20% additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose a 10% additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January 1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1, 1991; P.A. 93-74 deleted Subsec. (a)(2) with respect to regulated investment company or real estate investment trusts, renumbering Subdiv. (3) accordingly and amended Subsec. (d) to exclude real estate investment trusts and regulated investment trusts from provisions of section, effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; May Sp. Sess. P.A. 94-4 in Subsec. (d) exempted interlocal risk management agencies formed pursuant to chapter 113a, effective June 9, 1994, and applicable to income years commencing on or after January 1, 1980; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-197 amended Subsecs. (a) and (b) to clarify that out-of-state businesses carrying on or doing business in the state are subject to the tax on the capital base and made technical changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110 deleted Subsec. (b) re certain banks, trusts, investment and financing entities, relettered existing Subsecs., excluded financial service companies and made technical changes, effective May 19, 1998, and applicable to income years commencing on or after January 1, 1999; May 9 Sp. Sess. P.A. 02-1 added Subsec. (a)(3) re the effect of tax credits on the minimum tax, amended Subsec. (c) by adding "except as otherwise provided by subsection (d) of this section" and added Subsec. (d) re a minimum tax for financial services companies, effective July 1, 2002, and applicable to income years commencing on or after January 1, 2002; P.A. 03-2 added Subsec. (b)(3) re a surcharge for the 2003 income year, effective February 28, 2003, and applicable to income years commencing on or after January 1, 2003; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (b) to include in surcharge provided under Subdiv. (3) amounts calculated under Sec. 91 of P.A. 03-1 of the June 30 special session and to add Subdiv. (4) re surcharge for the 2004 income year, effective August 16, 2003, and applicable to income years commencing on or after January 1, 2003; P.A. 05-251 amended Subsec. (b) by deleting references to Sec. 91 of June 30 Sp. Sess. 03-1 in Subdivs. (3) and (4) and by adding Subdivs. (5) and (7) re surcharge in income years 2006 and 2007, respectively, effective June 30, 2005, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 amended Subsec. (b) to eliminate former Subdiv. (6) re surcharge in income year commencing on or after January 1, 2007, and prior to January 1, 2008, effective July 1, 2006, and applicable to income years commencing on or after January 1, 2006; June Sp. Sess. P.A. 09-3 amended Subsec. (b) by adding Subdiv. (6) re surcharge of 10% for income years on or after January 1, 2009, and exemption for companies with gross income less than $100,000,000, effective September 9, 2009, and applicable to income years commencing on or after January 1, 2009; P.A. 11-6 amended Subsec. (b) to add Subdiv. (7) re 20% surcharge for 2012 and 2013 income years and exemption for companies with gross income less than $100,000,000, effective May 4, 2011, and applicable to income years commencing on or after January 1, 2011.

PART II
PAYMENT OF ESTIMATED TAX

      Sec. 12-242g. Overpayments. (a) If a company has paid as an installment of estimated tax an amount in excess of the amount determined to be the correct amount of such installment, such amount shall be credited against any unpaid installment or against the tax. If the amount already paid, whether or not on the basis of installments, exceeds the amount determined to be the correct amount of the tax, the company shall be paid by the State Treasurer, upon order of the Comptroller, the amount of such overpayment.

      (b) If a company has filed its tax return under this chapter for the income year on or before the due date of such return or, if an extension of time to file has been requested and granted, the extended due date of such return, any overpayment reported on such return, if the company has elected to credit such overpayment against the company's estimated tax for the succeeding income year, shall be treated as if paid on the due date of the first required installment of estimated tax for such succeeding income year. Such reported overpayment shall be credited against otherwise unpaid required installments in the order in which such installments are required to be paid under section 12-242d.

      (1963, P.A. 651, S. 13(a); P.A. 95-327, S. 3, 10; P.A. 11-61, S. 56.)

      History: P.A. 95-327 added authority for commissioner to prescribe regulations re crediting overpayment against estimated tax, effective July 1, 1995, and applicable to estimated corporation business taxes for income years commencing on or after January 1, 1996; P.A. 11-61 designated existing provisions as Subsec. (a) and amended same by removing regulations authority, and added Subsec. (b) re process for carrying overpayment forward, effective October 1, 2011, and applicable to estimated corporation business tax payments for income years commencing on or after January 1, 2012.