CHAPTER 228g

FILINGS AND ELECTRONIC FUNDS TRANSFERS

Table of Contents

Sec. 12-685. Definitions.

Sec. 12-686. Payment of taxes by electronic funds transfer. When required.

Sec. 12-687. Timing of payments. Late payments.

Sec. 12-688. Voluntary payments by electronic funds transfer.

Sec. 12-689. Regulations.

Sec. 12-690. Electronic filing.

Sec. 12-691. Reserved


Sec. 12-685. Definitions. For the purposes of this chapter:

(1) “Commissioner” means the Commissioner of Revenue Services or any employee of the department.

(2) “Department” means the Department of Revenue Services.

(3) “Electronic funds transfer” means any transfer of funds that is initiated through an electronic terminal, telephonic instrument or computer or magnetic tape so as to order, instruct or authorize a financial institution to debit or credit an account but shall not include any transfer originated by check, draft or similar paper instrument.

(4) “Person” means any individual, partnership, company, society, association, trustee, executor, administrator or other fiduciary or custodian, public or private corporation or limited liability company, but does not include any Connecticut town, city, borough, consolidated town and city or consolidated town and borough.

(5) “Tax” means the tax or taxes imposed under this title or any other title of the general statutes and payable to the Commissioner of Revenue Services.

(May Sp. Sess. P.A. 92-17, S. 35, 59; P.A. 93-332, S. 13, 42; P.A. 94-6, S. 1, 4; P.A. 95-79, S. 35, 189; P.A. 97-243, S. 42, 67.)

History: May Sp. Sess. P.A. 92-17, S. 35 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993; P.A. 93-332 added new Subdiv. (4) defining “person” and renumbered the Subdiv. defining “tax” as Subdiv. (5), effective June 25, 1993, and applicable to tax payments or estimated tax payments due on or after July 1, 1993; P.A. 94-6, made technical change to exclusions in definition of “person”, effective April 7, 1994, and applicable to payments required to be made on or after said date; P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995; P.A. 97-243 amended Subdiv. (5), defining “tax”, to replace chapter references with reference to any tax payable to commissioner, effective June 24, 1997.

Sec. 12-686. Payment of taxes by electronic funds transfer. When required. (a)(1) Except as otherwise provided in subsections (b), (c) and (d) of this section, the commissioner may require every person who files a tax return for any tax on a monthly or quarterly basis to pay such tax during the twelve-month period following a determination of liability under this subdivision by one of the means of electronic funds transfer approved by the department, if the commissioner determines that such person’s liability for such tax was four thousand dollars or more for the twelve-month period ending on the June thirtieth immediately preceding the monthly or quarterly period with respect to which the requirement to pay tax by electronic funds transfer is established. The commissioner, in determining whether tax liability is four thousand dollars or more, shall base such determination on the taxes reported to be due on the tax returns of such person related to the period under examination. If any tax return or returns of such person for such period have not been filed, the commissioner may base such determination on any information available to such commissioner.

(2) Except as otherwise provided in subsections (b), (c) and (d) of this section, the commissioner may require every person, other than a person described in subdivision (3) of this subsection, who files a tax return for any tax on an annual basis to pay such tax, or any installment thereof, during the twelve-month period following a determination of liability under this subdivision by one of the means of electronic funds transfer approved by the department if the commissioner determines that such person’s liability for such tax was four thousand dollars or more for the year immediately preceding the year with respect to which the requirement to pay tax by electronic funds transfer is established. The commissioner, in determining whether tax liability is four thousand dollars or more, may base the determination on the estimated tax, if any, paid for the immediately preceding year, provided, if the tax return for such immediately preceding year has been filed, the commissioner shall base the determination on the taxes reported to be due on such tax return. If any tax return of such person for such period has not been filed or estimated tax has not been paid by such person for such period, the commissioner may base such determination on any information available to the commissioner.

(3) (A) Except as otherwise provided in subsections (b), (c) and (d) of this section, the commissioner may require every employer who is deducting and withholding Connecticut income tax from employee wages to pay such tax during the twelve-month period following a determination of liability under this subdivision, by one of the means of electronic funds transfer approved by the department, if the commissioner determines that the amount of Connecticut income tax deducted and withheld from employee wages by such employer was more than two thousand dollars for the twelve-month period ending on the June thirtieth immediately preceding the quarterly period with respect to which the requirement to pay over tax by electronic funds transfer is established. The commissioner, in determining whether tax liability is more than two thousand dollars, shall base such determination on the taxes reported to be due on the quarterly withholding tax returns of such employer related to the period under examination. If any such tax return of such employer for such period has not been filed, the commissioner may base such determination on any information available to the commissioner.

(B) Except as otherwise provided in subsections (b) and (c) of this section, the commissioner may require every payer, as defined in section 12-707, who is deducting and withholding Connecticut income tax from nonpayroll amounts, as defined in section 12-707, to pay such tax for the calendar year, following a determination of liability under this subdivision, by one of the means of electronic funds transfer approved by the department, if the commissioner determines that the amount of Connecticut income tax deducted and withheld from nonpayroll amounts by such payer for the look-back calendar year, as defined in section 12-707, was more than two thousand dollars. The commissioner, in determining whether the amount of Connecticut income tax deducted and withheld for the look-back calendar year is more than two thousand dollars, shall base such determination on the tax reported to be due on the withholding tax return of such payer for such look-back calendar year. If any such tax return of such payer for such period has not been filed, the commissioner may base such determination on any information available to the commissioner.

(b) Notwithstanding any provision of subsection (a) of this section: (1) No person shall be required to pay any tax by electronic funds transfer until the department has given notice to such person of such requirement; and (2) no person required to pay any tax for any period by electronic funds transfer shall cease such method of payment until notified by the department that such method of payment is no longer required. The department shall give notice to such person that such method of payment is no longer required as soon as practicable after such determination is made.

(c) Notwithstanding any provision of subsection (a) of this section, any person required by regulations adopted under section 12-690 to file electronically any return, statement or other document that is required by law or regulation to be filed with the commissioner shall be required to pay the tax to which such return, statement or other document pertains by electronic funds transfer. For purposes of this subsection, any person required by regulations adopted under section 12-690 shall not include any return preparer, as defined in such regulation.

(d) Notwithstanding any provision of subsection (a) of this section, any person required to file a tax return electronically or to make a tax payment by electronic funds transfer, may request in writing, not later than thirty days prior to the date such filing or payment is due, that the commissioner waive such requirements if, on the basis of information provided by such person, the commissioner finds that there would be undue hardship for such person. The commissioner shall promptly inform such person of the granting or rejection of the requested waiver. The decision of the commissioner shall be final and not subject to further review or appeal. If the commissioner grants the waiver, such person may file a signed paper Connecticut tax return or returns and make payments by other than electronic funds transfer. Such waiver shall be effective for twelve months from the date such waiver is granted. The provisions of this subsection shall not apply to return preparers.

(May Sp. Sess. P.A. 92-17, S. 36, 59; P.A. 94-6, S. 2, 4; P.A. 96-221, S. 9, 10, 25; P.A. 03-225, S. 17, 18; P.A. 10-188, S. 11; P.A. 11-61, S. 57; 11-145, S. 1.)

History: May Sp. Sess. P.A. 92-17, S. 36 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993; P.A. 94-6 added Subsec. (a)(3) re determination of employer’s responsibility to pay over tax by electronic funds transfer based on quarterly withholding tax returns, effective April 7, 1994, and applicable to payments required to be made on or after said date; P.A. 96-221 amended Subsec. (a) to lower threshold for electronic transfer of tax payments from $500,000 to $300,000, effective July 1, 1996, and to further lower threshold for electronic transfer of tax payments from $300,000 to $100,000, effective July 1, 1997; P.A. 03-225 amended Subsec. (a) to lower the threshold liability for filing under this section from $100,000 to $50,000, effective July 1, 2003, and applicable to payments required to be made on or after that date, and to further lower the threshold liability from $50,000 to $10,000, effective July 1, 2004, and applicable to payments required to be made on or after that date; P.A. 10-188 amended Subsec. (a)(1) and (2) to lower threshold for electronic funds transfer from $10,000 to $4,000 and make technical changes, amended Subsec. (a)(3) to lower threshold for employers from $10,000 to $2,000 and make technical changes, and added Subsec. (c) re payment by electronic funds transfer by any person required by regulation to file electronically, effective July 1, 2010; P.A. 11-61 amended Subsec. (a)(3) by designating existing provisions as Subpara. (A) and making technical changes therein, and by adding Subpara. (B) re requirement for payers withholding more than $2,000 from nonpayroll amounts to pay by electronic funds transfer, effective July 1, 2011, and applicable to tax periods ending on or after that date; P.A. 11-145 added Subsec. (d) re waiver from electronic filing or payment, and made conforming changes, effective October 1, 2011, and applicable to payments for tax periods beginning on or after that date.

Sec. 12-687. Timing of payments. Late payments. (a) Where a tax payment is required to be made by electronic funds transfer, any payment made by other than electronic funds transfer shall be treated as a tax payment not made in a timely manner, and shall be subject to penalty and interest in accordance with the applicable provisions of the general statutes, except that (1) for the first imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer or two thousand five hundred dollars, whichever is less; (2) for the second imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer or ten thousand dollars, whichever is less; and (3) for the third or any subsequent imposition of a penalty under this section relating to a tax period beginning on or after January 1, 2012, the penalty shall be equal to ten per cent of the tax payment required to be made by electronic funds transfer.

(b) Where any tax payment is required to be made by electronic funds transfer, such payment shall be treated as a tax payment not made in a timely manner if the electronic funds transfer for the amount of the tax payment is not initiated on or before the due date thereof. Any tax payment treated under this subsection as a tax payment not made in a timely manner shall be subject to interest in accordance with the applicable provisions of the general statutes, and a penalty that shall be equal to two per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for not more than five days, five per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for more than five days but not more than fifteen days, and ten per cent of the tax payment required to be made by electronic funds transfer, if such failure to pay by electronic funds transfer is for more than fifteen days.

(May Sp. Sess. P.A. 92-17, S. 37, 59; P.A. 94-6, S. 3, 4; 94-175, S. 21, 32; May Sp. Sess. P.A. 94-4, S. 80, 85; P.A. 95-160, S. 64, 69; P.A. 98-244, S. 27, 35; P.A. 11-61, S. 65.)

History: May Sp. Sess. P.A. 92-17, S. 37 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993; P.A. 94-6 amended Subsecs. (a) and (b) to allow employers an additional day to pay over withholding taxes to the department, effective April 7, 1994, and applicable to payments required to be made on or after said date; P.A. 94-175 made technical change in Subsecs. (a) and (b), effective June 2, 1994; May Sp. Sess. P.A. 94-4 revised effective date of P.A. 94-175 but without affecting this section; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 98-244 modified timely payment with respect to Saturdays, Sundays and holidays, and payments over by an employer and replaced flat 10% penalty with 2%, 5% and 10% rates tied to the period of lateness, effective June 8, 1998, and applicable to payments first due and payable on and after October 1, 1998; P.A. 11-61 deleted former Subsec. (a) re time to initiate electronic funds transfer, redesignated existing Subsec. (b)(1) as Subsec. (a) and amended same to delete language re failure to timely transfer funds and add new Subdivs. (1) to (3) re increasing penalties for repeated failure to make timely payments, and redesignated existing Subsec. (b)(2) as Subsec. (b) and amended same to revise provision re requirement for timely payment and impose interest on the penalty, effective June 21, 2011, and applicable to tax periods commencing on or after January 1, 2012.

Sec. 12-688. Voluntary payments by electronic funds transfer. (a)(1) Any person who files any tax return for any tax on a monthly or quarterly basis and who is not required under section 12-686 to pay such tax by electronic funds transfer may, at any time, submit a request to the department for permission to pay such tax by one of the means of electronic funds transfer approved by the department.

(2) Any person who files a tax return for any tax on an annual basis and who is not required under section 12-686 to pay tax by electronic funds transfer may, at any time, submit a request to the department for permission to pay such tax by one of the means of electronic funds transfer approved by the department.

(b) (1) If the department grants permission to any person to pay tax by electronic funds transfer, such person shall, except as provided in subdivision (2) of this subsection, be regarded, for the period for which such permission is granted, as a person who is required under section 12-686 to pay a tax by electronic funds transfer. If such person gives notice, by certified mail, to the department, at least sixty days before the expiration of such period, that such person no longer chooses to pay tax by electronic funds transfer beyond such period, such person shall cease to be regarded as a person who is required under section 12-686 to pay a tax by electronic funds transfer after the expiration of such period. If such person does not give such notice, such person shall cease to be regarded as a person who is required under section 12-686 to pay tax by electronic funds transfer sixty days after notice is given, by certified mail, to the department that the person no longer chooses to pay tax by electronic funds transfer.

(2) If the department grants permission to any person to pay a tax by electronic funds transfer, any tax payment made by electronic funds transfer by such person shall be treated as a tax payment made in a timely manner as long as such transfer is initiated on or before the date such tax is due, notwithstanding the fact that the bank account designated by the department may not be credited by electronic funds transfer for the amount of such payment on or before said due date.

(May Sp. Sess. P.A. 92-17, S. 38, 59; June Sp. Sess. P.A. 01-6, S. 33, 85.)

History: May Sp. Sess. P.A. 92-17, S. 38 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993; June Sp. Sess. P.A. 01-6 amended Subsec. (b) to designate existing provisions as Subdiv. (1), making a conforming change therein, and to add new Subdiv. (2) re timeliness of payments via electronic transfer, effective July 1, 2001, and applicable to payments required to be made on or after that date.

Sec. 12-689. Regulations. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, necessary for the administration of this chapter.

(May Sp. Sess. P.A. 92-17, S. 39, 59.)

History: May Sp. Sess. P.A. 92-17, S. 39 effective June 19, 1992, and applicable to any tax payments or estimated tax payments due on or after January 1, 1993.

Sec. 12-690. Electronic filing. (a)(1) The Commissioner of Revenue Services may permit the filing, by computer transmission or by employing new technology as it is developed, of any return, statement or other document that is required by law or regulation to be filed with said commissioner.

(2) The Commissioner of Revenue Services may permit the filing, by computer transmission or by employing new technology as it is developed, by any person of any document that is permitted by law or regulation to be filed with said commissioner, as long as such person and said commissioner have agreed that said commissioner may send any document or notice to such person by computer transmission or by employing new technology as it is developed.

(b) The Commissioner of Revenue Services may require the filing, by computer transmission or by employing new technology as it is developed, of any return, statement or other document that is required by law or regulation to be filed with said commissioner by any person who is required under the provisions of this chapter to pay the tax, to which such return, statement or other document pertains, by electronic funds transfer, or by any other person who is described in regulations adopted under this subsection by said commissioner in accordance with the provisions of chapter 54.

(c) For purposes of this section, the Commissioner of Revenue Services may prescribe alternative methods for the signing, subscribing or verifying of such return, statement or other document by a person that shall have the same validity, status and consequences as a paper return, statement or other document that was actually signed, subscribed or verified by such person.

(d) Notwithstanding any other provision of the general statutes, the Commissioner of Revenue Services may permit the payment of any tax that is required by law to be paid to him by use of any new technology as it is developed.

(e) The Commissioner of Revenue Services shall adopt regulations, in accordance with the provisions of chapter 54, necessary for the administration of this section.

(P.A. 97-243, S. 49, 67; June Sp. Sess. P.A. 01-6, S. 34, 85; P.A. 03-225, S. 16.)

History: P.A. 97-243 effective June 24, 1997; June Sp. Sess. P.A. 01-6 amended Subsec. (a) to designate existing provisions as Subdiv. (1) and to add Subdiv. (2) re transmission of certain information by the commissioner, effective July 1, 2001; P.A. 03-225 amended Subsec. (b) to authorize regulations re persons who may be required to file electronically, effective July 1, 2003, and applicable to payments required to be made on or after that date.

Sec. 12-691. Reserved for future use.