Substitute Senate Bill No. 1171

Public Act No. 99-121

An Act Concerning Improvements in Procedures and Administration and Minor Changes to Various Tax Statutes.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (b) of section 12-15 of the general statutes is repealed and the following is substituted in lieu thereof:

(b) The commissioner may disclose (1) returns or return information to (A) an authorized representative of another state agency or office, upon written request by the head of such agency or office, when required in the course of duty or when there is reasonable cause to believe that any state law is being violated, or (B) an authorized representative of an agency or office of the United States, upon written request by the head of such agency or office, when required in the course of duty or when there is reasonable cause to believe that any federal law is being violated, provided no such agency or office shall disclose such returns or return information, other than in a judicial or administrative proceeding to which such agency or office is a party pertaining to the enforcement of state or federal law, as the case may be, in a form which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer except that the names and addresses of jurors or potential jurors and the fact that the names were derived from the list of taxpayers pursuant to chapter 884 may be disclosed by the judicial branch; (2) returns or return information to the Auditors of Public Accounts, when required in the course of duty under chapter 23; (3) returns or return information to tax officers of another state or of a Canadian province or of a political subdivision of such other state or province or of the District of Columbia or to any officer of the United States Treasury Department or the United States Department of Health and Human Services, authorized for such purpose in accordance with an agreement between this state and such other state, province, political subdivision, the District of Columbia or department, respectively, when required in the administration of taxes imposed under the laws of such other state, province, political subdivision, the District of Columbia or the United States, respectively, and when a reciprocal arrangement exists; (4) returns or return information in any action, case or proceeding in any court of competent jurisdiction, when the commissioner or any other state department or agency is a party, and when such information is directly involved in such action, case or proceeding; (5) returns or return information to a taxpayer or its authorized representative, upon written request for a return filed by or return information on such taxpayer; (6) returns or return information to a successor, receiver, trustee, executor, administrator, assignee, guardian or guarantor of a taxpayer, when such person establishes, to the satisfaction of the commissioner, that [he] such person has a material interest which will be affected by information contained in such return; (7) information to the assessor or an authorized representative of the chief executive officer of a Connecticut municipality, when the information disclosed is limited to (A) a list of real or personal property that is or may be subject to property taxes in such municipality or (B) a list containing the name of each person who is issued any license, permit or certificate which is required, under the provisions of this title, to be conspicuously displayed and whose address is in such municipality; (8) real estate conveyance tax return information or controlling interest transfer tax return information to the town clerk or an authorized representative of the chief executive officer of a Connecticut municipality to which the information relates; (9) estate tax returns and estate tax return information to the Probate Court Administrator or to the court of probate for the district within which a decedent resided at the date of [his] the decedent's death, or within which the commissioner contends that a decedent resided at the date of [his] the decedent's death or, if a decedent died a nonresident of this state, in the court of probate for the district within which real estate or tangible personal property of the decedent is situated, or within which the commissioner contends that real estate or tangible personal property of the decedent is situated; (10) returns or return information to the Secretary of the Office of Policy and Management for purposes of subsection (b) of section 12-7a; (11) return information to the Jury Administrator, when the information disclosed is limited to the names, addresses, federal Social Security numbers and dates of birth, if available, of residents of this state, as defined in subdivision (1) of subsection (a) of section 12-701; (12) pursuant to regulations adopted by the commissioner, returns or return information to any person to the extent necessary in connection with the processing, storage, transmission or reproduction of such returns or return information, and the programming, maintenance, repair, testing or procurement of equipment, or the providing of other services, for purposes of tax administration; and (13) without written request and unless [he] the commissioner determines that disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation, returns and return information which may constitute evidence of a violation of any civil or criminal law of this state or the United States to the extent necessary to apprise the head of such agency or office charged with the responsibility of enforcing such law, in which event the head of such agency or office may disclose such return information to officers and employees of such agency or office to the extent necessary to enforce such law.

Sec. 2. Subsection (b) of section 12-39m of the general statutes is repealed and the following is substituted in lieu thereof:

(b) Notwithstanding the provisions of section 12-39h, at the time of the application of the cash bond upon the final resolution of the controversy, there shall be applied first to the payment of the tax finally determined to be due so much of the cash bond as is represented by the ratio, determined as of the date of receipt of the cash bond, [or the date of the assessment, whichever is later,] of the tax assessed over the total of the tax assessed and the interest accrued as of such date, and the balance shall be treated as interest paid on the tax assessed as of such date. Interest on the outstanding balance of the tax due and not deemed satisfied by the cash bond shall be determined as if the cash bond so applied to the payment of tax had been a tax payment as of the date of receipt of the cash bond, [or the date of the assessment, whichever is later,] such that the deposit stops the further accrual or compounding of interest with respect to the portion of the assessment deemed paid as of such date. The balance of the cash bond, if any, shall be applied to the payment of interest as of the date of receipt of the cash bond, with any excess applied in accordance with said section 12-39h.

Sec. 3. Section 12-217o of the general statutes is repealed and the following is substituted in lieu thereof:

There shall be allowed as a credit against the tax imposed on any corporation under this chapter with respect to any taxable year of such corporation commencing on or after January 1, 1997, (1) that has more than two hundred fifty full-time, permanent employees but not more than eight hundred full-time, permanent employees whose wages, salaries or other compensation is paid in this state, as the phrase is used in subsection (c) of section 12-218, an amount equal to five per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures or (2) that has not more than two hundred fifty full-time, permanent employees whose wages, salaries or other compensation is paid in this state, as the phrase is used in subsection (c) of section 12-218, an amount equal to ten per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures. In addition, any amount spent (1) by a corporation whose income year, for federal income tax purposes, commences on the first day of January, February, March, April or May, (2) on machinery and equipment acquired for and installed in a facility in this state, (3) during that portion of its income year in 1995 that expired on May 31, 1995, shall be deemed to have been spent during its income year commencing in 1997 and shall be added to any amount actually spent on machinery and equipment acquired for and installed in a facility in this state during its income year commencing in 1997, provided the credit percentage to which such corporation shall be entitled for its income year commencing in 1997 shall be based on the number of full-time, permanent employees during its income year commencing in 1997.

Sec. 4. Subsection (h) of section 12-218 of the general statutes is repealed and the following is substituted in lieu thereof:

(h) (1) Any company that is (A) a limited partner in a partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) not otherwise carrying on or doing business in this state shall [not apportion its net income within and without the state under the provisions of subsection (b) or (c) of this section, as the case may be, but shall, in lieu of such apportionment,] pay the tax imposed under section 12-214 solely on its distributive share as a partner of the income or loss of such partnership to the extent such income or loss is derived from or connected with sources within this state, except that, if the commissioner determines that the company and the partnership are, in substance, parts of a unitary business engaged in a single business enterprise, the company shall be taxed in accordance with the provisions of subdivision (3) of this subsection and not in accordance with the provisions of this subdivision, provided, in lieu of the payment of tax based solely on its distributive share, such company may elect for any particular income year, on or before the due date or, if applicable the extended due date, of its corporation business tax return for such income year, to apportion its net income within and without the state under the provisions of this chapter.

(2) Any company that is (A) a limited partner (i) in an investment partnership or (ii) in a limited partnership, other than an investment partnership, that does business, owns or leases property or maintains an office within this state and (B) otherwise carrying on or doing business in this state shall apportion its net income, including its distributive share as a partner of such partnership income or loss, within and without the state under the provisions [of subsection (b) or (c) of this section, as the case may be] of this chapter, except that the numerator and the denominator of its payroll factor, property factor, and receipts factor shall include its proportionate part, as a partner, of the numerator and the denominator of such partnership's payroll factor, property factor and receipts factor, respectively. For purposes of this section, such partnership shall compute its apportionment fraction and the numerator and the denominator of its payroll factor, property factor and receipts factor, as if it were a company taxable both within and without this state.

(3) Any company that is a general partner in a partnership that does business, owns or leases property or maintains an office within this state shall, whether or not it is otherwise carrying on or doing business in this state, apportion its net income, including its distributive share as a partner of such partnership income or loss, within and without the state under the provisions [of subsection (b) or (c) of this section, as the case may be] of this chapter, except that the numerator and the denominator of its payroll factor, property factor and receipts factor shall include its proportionate part, as a partner, of the numerator and the denominator of such partnership's payroll factor, property factor and receipts factor, respectively. For purposes of this section, such partnership shall compute its apportionment fraction and the numerator and the denominator of its payroll factor, property factor and receipts factor, as if it were a company taxable both within and without this state.

Sec. 5. Subdivision (12) of subsection (a) of section 12-218b of the general statutes is repealed and the following is substituted in lieu thereof:

(12) "Management services", when performed on behalf of an investment entity, pension fund or retirement account, means the rendering of investment advice directly or indirectly to an investment entity, pension fund or retirement account, making determinations as to when sales and purchases of property are to be made on behalf of the investment entity, pension fund or retirement account, or the selling or purchasing of property constituting assets of an investment entity, pension fund or retirement account and related activities, but only where such activity or activities are performed (A) pursuant to a contract with the investment entity, pension fund or retirement account, (B) for a person that has entered into such contract with the investment entity, pension fund or retirement account, or (C) for a person that is a related person of a person that has entered into such contract with an investment entity, pension fund or retirement account.

Sec. 6. Subsection (c) of section 12-222 of the general statutes is repealed and the following is substituted in lieu thereof:

(c) The commissioner may grant a reasonable extension of time for filing a completed return, if the company files a tentative return and application for extension of time in which to file a completed return, on forms furnished or prescribed by the commissioner, and pays the tax reported to be due on such tentative return on or before the first day of the fourth month next succeeding the end of the income year, or, in the case of an S corporation, on or before the fifteenth day of the fourth month next succeeding the end of the income year. Any additional tax which may be found to be due on the filing of the return as allowed by such extension shall bear interest at the rate of one per cent per month or fraction thereof from the original due date of such tax to the date of actual payment. Notwithstanding the provisions of section 12-229, if the commissioner grants a reasonable extension of time for filing a completed return, no penalty shall be imposed on account of any failure to pay the amount of tax reported to be due on a return within the time specified under the provisions of this chapter if the excess of the amount of tax shown on the return over the amount of tax paid on or before the original due date of such return is no greater than ten per cent of the amount of tax shown on such return, and any balance due shown on such return is remitted with such return.

Sec. 7. Subsection (f) of section 12-242d of the general statutes is repealed and the following is substituted in lieu thereof:

(f) (1) In the case of any required instalment, if the company establishes that the annualized income instalment is less than the amount determined under subsection (b) of this section, the amount of such required instalment shall be the annualized income instalment. Any reduction in a required instalment resulting from the application of this subsection shall be recaptured by increasing the amount of the next required instalment by the amount of such reduction and by increasing subsequent required instalments to the extent that the reduction has not previously been recaptured under this subdivision.

(2) In the case of any required instalment, the annualized income instalment is the excess, if any, of (A) an amount equal to the applicable percentage of the tax for the income year computed by placing on an annualized basis its net income [or its minimum tax base, as the case may be,] for months in the income year ending before the due date for the instalment, over (B) the aggregate amount of any prior required instalments for the taxable year.

(3) For purposes of this subsection, the applicable percentage for the first required instalment is twenty-seven, the applicable percentage for the second required instalment is sixty-three, the applicable percentage for the third required instalment is seventy-two and the applicable percentage for the fourth required instalment is ninety.

Sec. 8. Section 12-246 of the general statutes is repealed and the following is substituted in lieu thereof:

Air carriers subject to the provisions of this chapter shall file returns on a calendar year basis unless [the books of the air carrier are closed on a fiscal year basis other than the calendar year by authorization or order of the civil aeronautics board] a fiscal year other than the calendar year has been established for federal income tax purposes, in which event such fiscal year shall be used.

Sec. 9. Section 12-247 of the general statutes is repealed and the following is substituted in lieu thereof:

[When an incorporated air carrier has carried on business within the state for eleven months or less of the income year, the tax imposed under this chapter and chapter 208 shall be reduced in proportion to the fractional part of the year during which the air carrier operated, or had the right to operate, in this state.] The tax imposed shall in no case be less than [one hundred] two hundred fifty dollars for each income year.

Sec. 10. Subsection (e) of section 12-367 of the general statutes is repealed and the following is substituted in lieu thereof:

(e) In any case in which property of the decedent [valued at five hundred dollars or less] is discovered after the tax computation has been made and the appeal period provided for in sections 45a-186 to 45a-193, inclusive, has run, the fiduciary shall not be required to file an amendment to its tax return or to pay any additional tax that would be attributable to such after-discovered assets unless such additional tax equals or exceeds one hundred dollars.

Sec. 11. Subsection (a) of section 12-378 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) In each case in which the judge of the probate court having jurisdiction of the estate of a deceased person believes that the estate is not subject to tax under this chapter, such judge shall send a written opinion to the Commissioner of Revenue Services, with the copy of the tax return provided for in section 12-359, setting forth the judge's reasons for such opinion. [Sixty] Thirty days after the date on which such opinion is filed, the opinion shall be conclusive evidence that all real property included in the gross taxable estate is free from any claim for tax due the state under this chapter in respect to the interest of such deceased person in such real property, and that no tax is due from the estate, unless, (1) on or before the [sixtieth] thirtieth day after the filing of such opinion, the commissioner has filed an objection to such opinion or (2) the appraised value or the extent of taxability of any item is increased or property [valued at more than one thousand dollars] is discovered after such opinion and the tax attributable to such item or to such after-discovered property equals or exceeds one hundred dollars. The probate court may, at any time, correct an error or mistake in the opinion. If said judge has filed an opinion that no tax is due from an estate and the Commissioner of Revenue Services has not filed an objection to such opinion on or before the [sixtieth] thirtieth day after the filing of such opinion, said judge shall issue a certificate reciting that no tax under this chapter is due from the estate, which shall be conclusive proof that any lien on such property under section 12-366 or section 12-364 is discharged. Such certificate may be recorded in the office of the town clerk of the town in which the real property is situated.

Sec. 12. Subsections (6) and (7) of section 12-415 of the general statutes are repealed and the following is substituted in lieu thereof:

(6) The commissioner shall give to the retailer or person storing, accepting, consuming or otherwise using services or tangible personal property written notice of [his] the commissioner's assessment. The notice may be served personally or by mail. If by mail, it shall be addressed to the retailer or person storing, accepting, consuming or otherwise using services or tangible personal property at [his] the address as it appears in the records of the commissioner's office. [In case of service by mail of any notice required by this chapter, the service is complete at the time of deposit in the United States post office or mail box.]

(7) Except in the case of fraud, intent to evade this chapter or authorized regulations, failure to make a return, or claim for additional amount pursuant to subsection (3) of section 12-418, every notice of a deficiency assessment shall be mailed within three years after the last day of the month following the period for which the amount is proposed to be assessed or within three years after the return is filed, whichever period expires later. The limitation specified in this subsection does not apply in case of a sales tax proposed to be assessed with respect to sales of services or property for the storage, acceptance, consumption or other use of which notice of a deficiency assessment has been or is given pursuant to subsection (6) of this section, subsection (4) of section 12-416, subsection [(2)] (1) of section 12-417 and this subsection. The limitation specified in this subsection does not apply in case of an amount of use tax proposed to be assessed with respect to storage, acceptance, consumption or other use of services or property for the sale of which notice of a deficiency assessment has been or is given pursuant to said subsections and this subsection.

Sec. 13. Section 12-417 of the general statutes is repealed and the following is substituted in lieu thereof:

(1) If the commissioner believes that the collection of any tax or any amount of tax required to be collected and paid to the state or of any assessment will be jeopardized by delay, [he shall thereupon] the commissioner shall make an assessment of the tax or amount of tax required to be collected, noting that fact upon the assessment [. The amount assessed is immediately due and payable. (2)] and serving written notice thereof, personally or by mail, in the manner prescribed for service of notice of a deficiency assessment, on the person against whom the jeopardy assessment is made. Ten days after the date on which such notice is served on such person, such notice shall constitute a final assessment except only for such amounts as to which such person has filed a written petition for reassessment with the commissioner, as provided in subsection (3) of this section.

(2) The amount assessed is due and payable no later than the tenth day after service of the notice of assessment, unless on or before such tenth day the person against whom such assessment is made has obtained a stay of collection, as provided in subsection (3) of this section. To the extent that collection has not been stayed, the commissioner may enforce collection of such tax by using the method provided in section 12-35 or by using any other method provided for in the general statutes relating to the enforced collection of taxes, provided, if the amount of such tax has been definitely fixed, the amount so fixed shall be assessed and collected, and if the amount of such tax has not been definitely fixed, the commissioner shall assess and collect such amount as, in the commissioner's opinion, from the facts available to the commissioner, is sufficient. If the amount specified in the notice of jeopardy assessment is not paid [within ten days] on or before the tenth day after service of notice thereof upon the person against whom the jeopardy assessment is made, [the amount becomes final at the expiration of the ten days, unless a petition for reassessment is filed within the ten days, and] the delinquency penalty and the interest provided in section 12-419 shall attach to the amount of the tax or the amount of the tax required to be collected.

(3) The person against whom a jeopardy assessment is made may file a petition for the reassessment thereof, pursuant to section 12-418, with the commissioner [within ten days] on or before the tenth day after the service upon [him] such person of notice of the jeopardy assessment. Such person [shall also, within said ten-day period, deposit with the commissioner such security as the commissioner deems necessary to insure compliance with this chapter] may obtain a stay of collection of the whole or any part of the amount of such jeopardy assessment by filing with the commissioner, on or before such tenth day, a bond of a surety company authorized to do business in this state or other security acceptable to the commissioner in such an amount not exceeding double the amount as to which the stay is desired, as the commissioner deems necessary to ensure compliance with this chapter, conditioned upon payment of as much of the amount, the collection of which is stayed by the bond, as is found to be due from such person. The security may be sold by the commissioner in the manner prescribed by section 12-430. At any time thereafter in respect to the whole or any part of the amount covered by the bond, such person may waive the stay, and if as the result of such waiver, any part of the amount covered by the bond is paid, the bond shall, at the request of such person, be proportionately reduced.

Sec. 14. Section 12-418 of the general statutes is repealed and the following is substituted in lieu thereof:

(1) (A) Any person against whom an assessment is made under section 12-415 or 12-416 or any person directly interested may petition for a reassessment [within] not later than sixty days after service upon such person of notice thereof. If a petition for reassessment is not filed within the sixty-day period, the assessment becomes final at the expiration of the period.

(B) Any person against whom an assessment is made under section 12-417 or any person directly interested may petition for a reassessment not later than ten days after service of notice upon such person. If a petition for reassessment is not filed within such ten-day period, the assessment becomes final at the expiration of the period.

(2) If a petition for reassessment is filed within the sixty-day period, in the case of an assessment made under section 12-415 or 12-416, or within the ten-day period, in the case of an assessment made under section 12-417, the commissioner shall reconsider the assessment and, if the person has so requested in [his] the petition, shall, in [his] the commissioner's discretion, grant the person an oral hearing and shall give [him] such person ten days' notice of the time and place of the hearing. The commissioner may continue the hearing from time to time, as may be necessary, and may assign the conduct of such hearing to [his] a representative of the commissioner.

(3) The commissioner may decrease or increase the amount of the assessment before it becomes final, but the amount may be increased only if a claim for the increase is asserted by the commissioner at or before the hearing.

(4) The order or decision of the commissioner upon a petition for reassessment becomes final [thirty days] one month after service upon the petitioner of notice thereof unless within such period the petitioner seeks judicial review of the commissioner's order or decision pursuant to section 12-422.

(5) All assessments made by the commissioner under sections 12-415 and 12-416 are due and payable at the time they become final.

(6) Any notice required by this section shall be served personally or by mail in the manner prescribed for service of notice of a deficiency assessment.

Sec. 15. Section 12-436 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) (1) Each distributor of alcoholic beverages, before engaging in such business, shall make application to the Commissioner of Revenue Services, on forms to be prescribed and furnished by [him] the commissioner, for a distributor's license, which license, in case the applicant has complied with all other laws of the state pertaining to such business, shall authorize the manufacture and processing of alcoholic beverages in this state and importation into this state of alcoholic beverages and the sale within this state of such manufactured, processed or imported beverages.

(2) The commissioner may, in [his] the commissioner's discretion, refuse to issue a license if [he] the commissioner has reasonable ground to believe [(1)] that the distributor has wilfully made any false statement of substance with respect to such application for license, [(2)] that the distributor has neglected to pay any taxes due to this state or [(3)] that the distributor has been convicted of violating any of the alcoholic beverages tax laws of this or any other state or the alcoholic beverages tax laws of the United States or has such a criminal record that the commissioner reasonably believes that such distributor is not a suitable person to be issued a license, provided no refusal shall be rendered under this subdivision except in accordance with the provisions of sections 46a-80 and 46a-81.

(b) (1) No person, except a licensed distributor and railroad or airline companies so far as they conduct such beverage business in cars or passenger trains or airplanes, shall sell any alcoholic beverages in this state or possess such beverages with intent to sell, unless such beverages have previously been subject to the tax imposed by this chapter.

(2) No person shall ship, transport or import alcoholic beverages into this state unless such alcoholic beverages are delivered to a licensed distributor or to an internal revenue or United States customs bonded warehouse under regulations prescribed by the Commissioner of Revenue Services, or are transported in bonded trucks to vessels in Connecticut ports for export; provided [(1)] (A) any individual may import alcoholic beverages purchased by [him] such individual within the territorial limits of the United States to an amount not to exceed five gallons in any sixty-day period for [his own consumption] such individual's own consumption, (B) any individual may import alcoholic beverages, whether or not purchased by such individual, from outside the territorial limits of the United States to an amount not to exceed five gallons in any three hundred sixty-five-day period for such individual's own consumption, and [(2)] (C) any individual who has resided outside the United States for a period of six months or more may, on one occasion and in conjunction with the return of [his] such individual's personal and household goods and effects upon the termination of such foreign residency, import wine to an amount not to exceed one hundred gallons, of which not more than twenty gallons shall be of the same brand and spirits not to exceed ten gallons of which not more than two gallons shall be of the same brand, after making application in [either] each such case to the Department of Consumer Protection and presenting with the application a certificate from the Commissioner of Revenue Services to the effect that the tax provided for in section 12-435 has been paid. A copy of the importation certificate issued by the Department of Consumer Protection shall accompany each such shipment.

(3) The provisions of this section shall not apply to alcoholic beverages which are actually brought into the state by any individual in quantities of four gallons or less.

(c) The [Commissioner of Revenue Services] commissioner may require a licensed distributor who is a consignee of any alcoholic beverages transported, shipped or imported into this state to prepare and sign two copies of an invoice, the form to be prescribed by the commissioner, furnishing a description of each shipment received. Such licensed distributor shall, on demand of the [Commissioner of Revenue Services] commissioner, within five days after the receipt of any shipment, file one copy of such invoice with the [Commissioner of Revenue Services] commissioner and retain the other copy in [his] such licensed distributor's files.

(d) Each distributor, when making a taxable sale, shall furnish to the purchaser an invoice showing the quantities of alcoholic beverages sold and the classification thereof within the provisions of this chapter. The distributor shall keep all such invoices as part of [his] the distributor's records.

(e) Any person holding a distributor's license may, not later than ten days before the end of any month, apply to the [Commissioner of Revenue Services] commissioner for cancellation of such license, such cancellation to be effective from the first day of the following month.

(f) Any distributor shipping any alcoholic beverages into any military reservation located within the territorial boundaries of this state shall file with the [Commissioner of Revenue Services] commissioner a duplicate invoice showing the quantities of alcoholic beverages shipped and the classification thereof within the provisions of this chapter.

(g) Any person who violates any provision of this section shall be fined not more than one thousand dollars or imprisoned not more than one year or both for each offense.

(h) (1) The commissioner may suspend or revoke the license of any distributor for failure to comply with any of the provisions of this chapter or regulations related thereto, following a hearing with respect to which notice in writing, specifying the time and place of such hearing and requiring such distributor to show cause why such license should not be revoked, is mailed or delivered to such distributor not less than ten days preceding the date of such hearing. Such notice may be served personally or by registered or certified mail.

(2) The commissioner shall not issue a new license to a distributor whose license is revoked unless the commissioner is satisfied that such distributor will comply with the provisions of this chapter and regulations related thereto.

Sec. 16. Section 12-541 of the general statutes is repealed and the following is substituted in lieu thereof:

There is hereby imposed a tax of ten per cent of the admission charge to any place of amusement, entertainment or recreation, except that no tax shall be imposed with respect to any admission charge (1) when the admission charge is less than one dollar or, in the case of any motion picture show, when the admission charge is not more than four dollars and fifty cents, (2) when a daily admission charge is imposed which entitles the patron to participate in an athletic or sporting activity, (3) to any event, other than events held at the stadium facility, as defined in section 32-621, all of the proceeds from which inure exclusively to an entity which is exempt from federal income tax under the Internal Revenue Code, provided such entity actively engages in and assumes the financial risk associated with the presentation of such event, (4) to any event, other than events held at the stadium facility, as defined in section 32-621, which in the opinion of the commissioner, is conducted primarily to raise funds for an entity which is exempt from federal income tax under the Internal Revenue Code, provided the commissioner is satisfied that the net profit which inures to such entity from such event will exceed the amount of the admissions tax which, but for this subdivision, would be imposed upon the person making such charge to such event, (5) to any event at the Hartford Civic Center, the New Haven Coliseum, New Britain Beehive Stadium, New Britain Veterans Memorial Stadium, facilities owned or managed by the Tennis Foundation of Connecticut or any successor organization or the William A. O'Neill Convocation Center, (6) other than for events held at the stadium facility, as defined in section 32-621, paid by centers of service for elderly persons, as described in subdivision (d) of section 17b-425, (7) to any production featuring live performances by actors or musicians presented at Gateway's Candlewood Playhouse, Ocean Beach Park or any nonprofit theater or playhouse in the state, provided such theater or playhouse possesses evidence confirming exemption from federal tax under Section 501 of the Internal Revenue Code, or (8) to any carnival or amusement ride. The tax shall be imposed upon the person making such charge and reimbursement for the tax shall be collected by such person from the purchaser. Such reimbursement, termed "tax", shall be paid by the purchaser to the person making the admission charge. Such tax, when added to the admission charge, shall be a debt from the purchaser to the person making the admission charge and shall be recoverable at law. The amount of tax reimbursement, when so collected, shall be deemed to be a special fund in trust for the state of Connecticut.

Sec. 17. Section 12-542 of the general statutes is repealed and the following is substituted in lieu thereof:

A tax is hereby imposed equivalent to five per cent of all amounts charged for admissions, refreshment, i.e., food and drink, service or merchandise at any cabaret or similar place furnishing music, dancing privileges or any other entertainment for profit during the time or times that such music, dancing privileges or any other entertainment is furnished. In such cases cabaret status begins at the earlier of (1) the time the music and dancing or other entertainment starts; or (2) the time any admission, cover, minimum, entertainment or similar charge is imposed. If any portion of an establishment is subject to the cabaret tax, the tax also applies to any other portion from which the entertainment can be viewed, or from which there is free access to the entertainment or dancing area. The tax imposed by this section is imposed upon the person making the charge for admission, refreshment, service or merchandise. Reimbursement for this tax shall be collected by such person from the purchaser. Such reimbursement termed "tax" shall be paid by the purchaser to the person charging such amounts. Such tax when added to the amounts charged shall be a debt from the purchaser to the person making the charges and shall be recoverable at law. The amount of tax reimbursement, when so collected, shall be deemed to be a special fund in trust for the state of Connecticut.

Sec. 18. Subsection (a) of section 12-543 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) There is hereby imposed a tax equivalent to ten per cent of any amount paid as dues or initiation fees to any social, athletic or sporting club. Such tax shall be imposed upon the club receiving such amounts. Reimbursement for such tax shall be collected by the club from the member. Such reimbursement, termed "tax", shall be paid by the member to the club charging the dues or initiation fees. Such tax when added to the amounts charged shall be a debt from the member to the club charging such amounts and shall be recoverable at law. The amount of tax reimbursement, when so collected, shall be deemed to be a special fund in trust for the state of Connecticut.

Sec. 19. Subsection (a) of section 12-548 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) The commissioner may examine the records of any person subject to a tax imposed under the provisions of this chapter as [he may deem] the commissioner deems necessary. If [he shall determine therefrom] the commissioner determines that there is a deficiency with respect to the payment of any such tax due under the provisions of this chapter, [he] the commissioner shall assess or reassess the deficiency in tax, give notice of such deficiency assessment or reassessment to the taxpayer and make demand upon [him] the taxpayer for payment. Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the date when the original tax was due and payable. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment, or fifty dollars, whichever is greater. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter or regulations promulgated thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No taxpayer shall be subject to more than one penalty under this subsection in relation to the same tax period. Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this chapter when it is proven to the commissioner's satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect. Any decision rendered by any federal court holding that a taxpayer has filed a fraudulent return with the Director of Internal Revenue shall subject the taxpayer to the penalty imposed by this section without the necessity of further proof thereof, except when it can be shown that the return to the state so differed from the return to the federal government as to afford a reasonable presumption that the attempt to defraud did not extend to the return filed with the state. Within thirty days of the mailing of such notice, the taxpayer shall pay to the commissioner, in cash, or by check, draft or money order drawn to the order of the Commissioner of Revenue Services, any additional amount of tax, penalty and interest shown to be due.

Sec. 20. Subdivision (1) of subsection (c) of section 12-587 of the general statutes is repealed and the following is substituted in lieu thereof:

(c) (1) Any company which imports or causes to be imported into this state petroleum products for [its use and consumption] sale, use or consumption in this state, other than a company subject to and having paid the tax on such company's gross earnings from first sales of petroleum products within this state, which earnings include gross earnings attributable to such imported or caused to be imported petroleum products, in accordance with subsection (b) of this section, shall pay a quarterly tax on the consideration given or contracted to be given for such petroleum product if the consideration given or contracted to be given for all such deliveries during the quarterly period for which such tax is to be paid exceeds one hundred thousand dollars. Except as otherwise provided in subdivision (3) of this subsection, the rate of tax shall be five per cent. Fuel in the fuel supply tanks of a motor vehicle, which fuel tanks are directly connected to the engine, shall not be considered a delivery for the purposes of this subsection.

Sec. 21. Subsection (a) of section 12-638c of the general statutes is repealed and the following is substituted in lieu thereof:

(a) On or before the last day of the month following the month in which the sale or transfer of a controlling interest in an entity which is subject to the tax imposed by section 12-638b, a return shall be filed with the commissioner by the person conveying the controlling interest, in such form as the commissioner may prescribe. Payment of the tax shall accompany such return. Returns shall be signed by the person required to file the return for such entity or by the authorized agent of such person but need not be verified by oath. If any entity fails to pay the amount of tax reported to be due on its return within the time specified under the provisions of this section, there shall be imposed a penalty equal to ten per cent of such amount due and unpaid or fifty dollars, whichever is greater. Such amount shall bear interest at the rate of one per cent per month or fraction thereof, from the due date. Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this chapter when it is proven to the commissioner's satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect.

Sec. 22. Section 12-723 of the general statutes is repealed and the following is substituted in lieu thereof:

The commissioner may for reasonable cause extend the time for the filing of any return, statement or other document due or required under this chapter and the payment of tax due pursuant to this chapter in accordance with regulations adopted in accordance with chapter 54. Said commissioner may require the filing of a tentative return and the payment of the tax reported to be due thereon in connection with such extension. Any additional tax which may be found to be due on the filing of a return, statement or other document as allowed by such extension shall bear interest at the rate of one per cent per month or fraction thereof from the original due date of such tax to the date of actual payment. Notwithstanding the provisions of section 12-735, no penalty shall be imposed on account of any failure to pay the amount of tax reported to be due on a return, statement or other document within the time specified under the provisions of this chapter if the excess of the amount of tax shown on the return, statement or other document over the amount of tax paid on or before the original due date of such return, statement or other document is no greater than ten per cent of the amount of tax shown on such return, statement or other document, and any balance due shown on such return, statement or other document is [paid on or before the extended due date of] remitted with such return, statement or other document.

Sec. 23. Subsection (a) of section 12-728 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) After a final return pursuant to the provisions of this chapter is filed, the commissioner shall cause the same to be examined and may make such further audit or investigation or reaudit as [he may deem] the commissioner deems necessary, and if [therefrom he shall determine] the commissioner determines that there is a deficiency with respect to the payment of any tax due under this chapter, [he] the commissioner shall assess or reassess the additional taxes, penalties and interest due to this state, give notice of such assessment or reassessment to the taxpayer and make demand upon [him] the taxpayer for payment. Within sixty days of the mailing of such notice, the taxpayer shall pay to the commissioner, in cash or by check, draft or money order drawn to the order of the commissioner, the amount of the deficiency. Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable. When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter or regulations adopted thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter or regulations adopted thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. No taxpayer shall be subject to more than one penalty under this section in relation to the same tax period. Any decision rendered by any federal court holding that a taxpayer has filed a fraudulent return with the Director of Internal Revenue shall subject the taxpayer to [a] the twenty-five per cent penalty imposed by [the preceding sentence] this subsection without the necessity of further proof thereof, except when it can be shown that the return to the state so differed from the return to the federal government as to afford a reasonable presumption that the attempt to defraud did not extend to the state.

Sec. 24. Section 12-729a of the general statutes is repealed and the following is substituted in lieu thereof:

(a) If the commissioner believes that the collection of any tax imposed under this chapter, including any amount of tax required to be deducted and withheld and paid over to the commissioner, will be jeopardized by delay, [he] the commissioner shall make a jeopardy assessment of [and collect such tax. The amount assessed is immediately due and payable. He] the tax, noting that fact upon the assessment and serving written notice thereof, personally or by mail, in the manner prescribed for service of notice of proposed assessment, on the person against whom the jeopardy assessment is made. Ten days after the date on which it is served, such notice shall constitute a final assessment except only for such amounts as to which such person has filed a written protest with the commissioner as provided in subsection (c) of this section.

(b) The amount assessed is due and payable no later than the tenth day after service of the notice of assessment, unless on or before such tenth day the person against whom such assessment is made has obtained a stay of collection as provided in subsection (c) of this section. To the extent that collection has not been stayed, the commissioner may enforce collection of such tax by using the method provided in section 12-35 or by using any other method provided for in the general statutes relating to the enforced collection of taxes [. If] provided, if the amount of such tax has been definitely fixed, the amount so fixed shall be assessed and collected [. If] and if the amount of such tax has not been definitely fixed, the commissioner shall assess and collect such amount as, in [his] the commissioner's opinion, from the facts available to [him] the commissioner, is sufficient. [(b)] If the amount specified in the notice of jeopardy assessment is not paid [within ten days] on or before the tenth day after service of notice [, personally or by mail,] upon the person against whom such jeopardy assessment is made, [the amount becomes final at the expiration of the ten days, unless a written protest is filed within such ten days, and] the penalty and the interest provided in section 12-735 shall attach to the amount of the tax.

(c) The person against whom the jeopardy assessment is made may file a written protest with the commissioner [within ten days] on or before the tenth day after the service upon [him] such person of notice of the jeopardy assessment. If a written protest is filed, the commissioner shall reconsider the jeopardy assessment and, if such person has so requested, may grant or deny such person or such person's authorized representatives an oral hearing. Such person may obtain a stay of collection of the whole or any part of the amount of such jeopardy assessment by filing with the commissioner, [within said ten-day period, a bond] on or before such tenth day, a bond of a surety company authorized to do business in this state or other security acceptable to the commissioner in such an amount, not exceeding double the amount as to which the stay is desired, [and with such surety] as the commissioner deems necessary to ensure compliance with this chapter, conditioned upon payment of as much of the amount, the collection of which is stayed by the bond, as is found to be due from such person. At any time thereafter in respect to the whole or any part of the amount covered by such bond, the person against whom a jeopardy assessment has been made may waive such stay, and if, as the result of such waiver, any part of the amount covered by the bond is paid, the bond shall, at the request of such person, be proportionately reduced.

(d) Notice of the commissioner's determination, following [his] reconsideration of the jeopardy assessment, shall be served, personally or by mail, on the person against whom the jeopardy assessment was made, and such notice shall set forth the commissioner's findings of fact and the basis of decision in each case decided in whole or in part adversely to such person.

(e) The determination of the commissioner following [his] reconsideration of the jeopardy assessment, shall be final upon the expiration of one month from the date on which notice thereof is served, personally or by mail, on the person against whom the jeopardy assessment was made unless within such period the taxpayer seeks judicial review of the commissioner's determination under section 12-730.

[(f) In the case of service by mail of any notice required by this section, the service is complete at the time of deposit in the United States Post Office or mail box. If served by mail, any notice to a person against whom a jeopardy assessment is made shall be addressed to such person's address as it appears in the records of the commissioner.]

Sec. 25. Subsections (d) and (e) of section 12-733 of the general statutes are repealed and the following is substituted in lieu thereof:

(d) (1) If a taxpayer fails to comply with the requirements of section 12-727 by not reporting a change or correction [increasing his] by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income, or [in] by not reporting a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or [in] by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time.

(2) If a taxpayer fails to comply with the requirements of subsection (b) of section 12-704 by not reporting a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time.

(e) (1) If the taxpayer, pursuant to section 12-727, reports a change or correction [, files an amended return increasing his] by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income or reports a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made at any time [within] not later than three years after such report or amended return is filed.

(2) If the taxpayer, pursuant to subsection (b) of section 12-704, reports a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made not later than three years after such report or amended return is filed.

Sec. 26. (NEW) Unless otherwise required by the general statutes, service of any notice provided by the Commissioner of Revenue Services may be made by first class mail and shall not require certified or registered mail. Any such notice to a person shall be addressed to such person's address as it appears in the records of the commissioner and service of such notice shall be complete at the time of deposit in the United States Post Office or mail box by the commissioner or the authorized agent of the commissioner.

Sec. 27. (NEW) (a) For purposes of sections 1-206, 3-114e, 3-114f, 3-114i, 4-147, 9-23g, 9-65, 9-153b, 9-311, 9-333j, 10-183g, 12-146, 20-429, 31-241, 31-248, 31-249a, 33-603, 33-663, 33-929, 33-1003, 33-1053, 33-1219, 38a-716 and 42-243 (1) any reference to the United States mail or a postmark shall be treated as including a reference to any delivery service designated by the Secretary of the Treasury of the United States pursuant to Section 7502 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, (2) any reference to a postmark made by the United States Postal Service shall be treated as including a reference to any date recorded or marked in the manner described in said Section 7502 of said Internal Revenue Code by a designated delivery service, and (3) any equivalent of registered or certified mail designated by the Secretary of the Treasury of the United States pursuant to said Section 7502 of said Internal Revenue Code shall be included within the meaning of registered or certified mail.

(b) The Legislative Commissioners' Office shall, in codifying the provisions of this section, make such technical, grammatical and punctuation changes and statutory placements and classifications, including, but not limited to, the addition of newly enacted material to the sections listed in subsection (a) of this section as are necessary to carry out the purposes of this section.

Sec. 28. This act shall take effect from its passage, except that section 2 shall be applicable to cash bonds remitted on or after June 8, 1998, section 7 shall be applicable to income years commencing on or after January 1, 1998, sections 3 to 6, inclusive, shall be applicable to income years commencing on or after January 1, 1999, section 22 shall be applicable to taxable years commencing on or after January 1, 1999, sections 16, 17 and 18 shall be applicable to periods commencing on or after July 1, 1999, section 20 shall be applicable to calendar quarters commencing on or after July 1, 1999, sections 10 and 11 shall take effect July 1, 1999, section 15 shall be applicable to sales occurring on or after October 1, 1999, and sections 8 and 9 shall be applicable to income years commencing on or after January 1, 2000.

Approved June 3, 1999

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