§ 12-217e — Tax credits for certain manufacturing, service and eligible facilities. No credit to be first claimed for income years commencing on or after January 1, 2018.

Connecticut § 12-217e

• Jurisdiction: Connecticut
• Title 12: Taxation
• Ch. 208: Corporation Business Tax

Text

(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. No credit allowed by this section may be first claimed for any income year commencing on or after January 1, 2018. (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. *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. See Sec. 32-9p for definitions of “manufacturing facility” and “service facility”.

Legislative History

(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; P.A. 18-145, S. 1.) 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; P.A. 18-145 amended Subsec. (d) to add provision re no credit may be first claimed for any income year commencing on or after January 1, 2018, effective July 1, 2018, and applicable to income years commencing on or after January 1, 2018.