(a)For purposes of this section, “fixed capital” means tangible personal property which (1) has a class life, in years, of more than four years, as described in Section 168(e) 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) is acquired by purchase from a person other than a related person, (3) is not acquired to be leased, and is not leased, to another person or persons during the twelve full months following its acquisition, and (4) will be held and used in this state by a corporation in the ordinary course of the corporation's trade or business in this state for not less than five full years following its acquisition. “Fixed capital” does not include inventory, land, buildings or structur
Free access — add to your briefcase to read the full text and ask questions with AI
(a) For purposes of this section, “fixed capital” means tangible personal property which (1) has a class life, in years, of more than four years, as described in Section 168(e) 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) is acquired by purchase from a person other than a related person, (3) is not acquired to be leased, and is not leased, to another person or persons during the twelve full months following its acquisition, and (4) will be held and used in this state by a corporation in the ordinary course of the corporation's trade or business in this state for not less than five full years following its acquisition. “Fixed capital” does not include inventory, land, buildings or structures, or mobile transportation property. With respect to a corporation claiming a credit under this section, a “related person” means a corporation, partnership, association or trust controlled by such corporation; an individual, corporation, partnership, association or trust that is in control of such corporation; a corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in control of such corporation; or a member of the same controlled group as such corporation. For purposes of this section, “control”, with respect to a corporation, means ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote; with respect to a trust, means ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, other than paragraph (3) of such section. (b) There shall be allowed a credit for any corporation against the tax imposed under this chapter in an amount paid or incurred by such corporation for any new fixed capital investment during the income year in which such fixed capital is acquired as follows: For any income year commencing on or after January 1, 1998, and prior to January 1, 1999, equal to three per cent of such amount paid or incurred by the corporation during such income year; for any income year commencing on or after January 1, 1999, and prior to January 1, 2000, equal to four per cent of such amount paid or incurred by the corporation during such income year; and for any income year commencing on or after January 1, 2000, equal to five per cent of such amount paid or incurred by the corporation during such income year. (c) The amount of such credit allowed to any corporation under this section shall not exceed the amount of tax due from such corporation under this chapter with respect to such income year. (d) No corporation claiming the credit under this section with respect to the acquisition of fixed capital, as defined in subsection (a) of this section, may claim a credit against any tax under any other provision of the general statutes with respect to the same acquisition. (e) Any tax credit not used in the income year during which the acquisition was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed. (f) If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for three full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture one hundred per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such three-year period expires. If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for five full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture fifty per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such five-year period expires. The provisions of this subsection shall not apply if the property that is the subject of the credit under this section is replaced. If any amount of credit required to be recaptured has not been paid to the commissioner on or before the first day of the fourth month next succeeding the end of the income year immediately succeeding the income year during which the three-year or five-year period, as the case may be, expires, such amount shall bear interest at the rate of one per cent per month or fraction thereof from such date to the date of payment. *Note: On and after July 1, 2025, this section, as amended by section 354 of public act 23-204, is to read as follows: “Sec. 12-217w. Tax credit for investment in fixed capital. (a) For purposes of this section: (1) “Fixed capital” means tangible personal property that (A) has a class life, in years, of more than four years, as described in Section 168(e) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, (B) is acquired by purchase from a person other than a related person, (C) is not acquired to be leased, and is not leased, to another person or persons during the twelve full months following its acquisition, and (D) will be held and used in this state by (i) for purposes of subdivision (1) of subsection (b) of this section, a corporation in the ordinary course of the corporation's trade or business in this state for not less than five full years following its acquisition, or (ii) for purposes of subdivision (2) of subsection (b) of this section, a limited liability company in the ordinary course of the limited liability company's trade or business in this state for not less than five full years following its acquisition. “Fixed capital” does not include inventory, land, buildings or structures or mobile transportation property; (2) “Related person” means, with respect to a corporation claiming a credit under this section, (A) a corporation, partnership, association or trust controlled by such corporation, (B) an individual, corporation, partnership, association or trust that is in control of such corporation, (C) a corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in control of such corporation, or (D) a member of the same controlled group as such corporation; (3) “Control” means (A) with respect to a corporation, ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of such corporation entitled to vote, or (B) with respect to a trust, ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, other than paragraph (3) of said section. (b) (1) There shall be allowed a credit for any corporation against the tax imposed under this chapter in an amount paid or incurred by such corporation for any new fixed capital investment during the income year in which such fixed capital is acquired as follows: For any income year commencing on or after January 1, 1999, and prior to January 1, 2000, equal to four per cent of such amount paid or incurred by the corporation during such income year; and for any income year commencing on or after January 1, 2000, equal to five per cent of such amount paid or incurred by the corporation during such income year. (2) There shall be allowed an additional credit against the tax imposed under this chapter for any corporation that (A) has its headquarters in this state, (B) owns at least eighty per cent, directly or indirectly, of a limited liability company that is, for federal income tax purposes, treated as a partnership or disregarded as an entity separate from its owner, and (C) provides telecommunications service, in an amount paid or incurred by such limited liability company for any new fixed capital investment during the income year in which such fixed capital is acquired as follows: For any income year commencing on or after July 1, 2025, equal to five per cent of such amount paid or incurred by the limited liability company. (c) The total amount of the credits allowed to any corporation under this section shall not exceed the amount of tax due from such corporation under this chapter with respect to such income year. (d) No corporation claiming a credit under this section and no limited liability company for which a corporation is claiming a credit under this section, with respect to the acquisition of fixed capital, may claim a credit against any tax under any other provision of the general statutes with respect to the same acquisition. (e) Any tax credit not used in the income year during which the acquisition was made may be carried forward for the five immediately succeeding income years until the full credit has been allowed. (f) If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for three full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture one hundred per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such three-year period expires. If the fixed capital on account of which a corporation has claimed the credit allowed by this section is not held and used in this state in the ordinary course of the corporation's trade or business in this state for five full years following its acquisition as provided in subsection (a) of this section, the corporation shall recapture fifty per cent of the amount of the credit allowed under this section on its corporation business tax return required to be filed for the income year immediately succeeding the income year during which such five-year period expires. The provisions of this subsection shall not apply if the property that is the subject of the credit under this section is replaced. If any amount of credit required to be recaptured has not been paid to the commissioner on or before the first day of the fourth month next succeeding the end of the income year immediately succeeding the income year during which the three-year or five-year period, as the case may be, expires, such amount shall bear interest at the rate of one per cent per month or fraction thereof from such date to the date of payment.”