Glossary

TAXES:

Luxury Tax
For various goods, including motor vehicles, boats, jewelry, clothing and footwear above a set price.

Corporation Business Tax
Corporations are subject to tax on income derived from in-state sources.


SALES TAX EXEMPTIONS

Motor vehicle fuel
Gross receipts from the distribution of and the storage, use or other consumption in the state of motor vehicle fuel that is subject to the motor fuels tax.

Certain utilities sales
The exemption applies to the following: (1) Gas and electricity for residential use and certain manufacturing or agricultural production. (2) Water, steam and telegraph. (3) Monthly charges of $150 dollars or less for electricity not otherwise exempt. (4) Gas, water, steam or electricity used in furnishing same to consumers.

Patient Care Services
Patient care services are those for which payment is received by the hospital.

World Wide Web
Services rendered in connection with the creation, development hosting or maintenance of all or part of a web site which is part of the graphical, hypertext portion of the Internet, commonly referred to as the World-Wide Web. Renovation and Repair for Residential Real Property Sales of renovation and repair services of paving of any sort, painting or staining, wallpapering, roofing, siding and exterior sheet metal work other than industrial, commercial or income producing real property.


CORPORATION BUSINESS TAX CREDITS

Urban and industrial reinvestment
The credit is available for investments associated with urban site remediation. It is administered by the Department of Economic and Community Development (DECD) and is allowable over 10 years. The credit amount may not exceed the amount of state revenue that DECD determines will be generated by the site. There is a recapture provision if the actual amount of revenue generated is less than the total sum of tax credits claimed. The credit is limited to $100 million per project and $650 million for all projects. Unused credits may be carried forward for 5 years.

Sale of certain credits
Companies with less than $70 million in gross sales that cannot take research and development credits under CGS Secs. 12-217j and 217n because they do not have a tax liability, are permitted to sell unused credits back to the state at 65% of their value. The maximum annual refund is $1.5 million per company.

Research and experimentation
The credit is available for incremental increases in research and experimental expenditures incurred in this state. The credit is 20% of the amount by which expenditures in the current income year exceed expenditures in the preceding year. Unused credits may be carried forward for 15 years.

Research and development
The credit is available for research and development expenditures incurred in this state. The credit increases from (1) 1% of expenditures up to $50 million to (2) 6% of expenditures over $200 million. Qualified small businesses with a gross income of less than $100 million are eligible for the 6% credit. The credit cannot be claimed if the credit under 12-217j is claimed. The credit for expenditures over $200 million is reduced if there are work force reductions and the credit for certain aerospace companies is subject to employment restrictions. Unused credits may be carried forward until fully taken.

Qualified small business job creation
An employer with less than 50 employees in Connecticut may earn a tax credit equal to $200 per month for hiring a Connecticut resident between May 6, 2010 and December 31, 2012.

New jobs creation
The credit is available to companies that: (1) relocate out-of-state operations to Connecticut; (2) create at least 10 new, full-time jobs here; and (3) hire new employees for those jobs and keep them employed for at least 12 months. The Department of Economic and Community Development (DECD) may approve full or partial credits only if the proposed company relocation: (1) is not economically viable without the credits and (2) provides a net benefit to economic development and employment in the state. The credit is up to 60% of the state income tax withheld from the new employeesí wages. For each new employee, the credit may be claimed for up to five consecutive years. There is a recapture provision if the number of new employees falls below that for which the taxpayer claimed the credit and they are not replace by other new employees. The annual limit for all companies is $10 million. Credits must be taken in the same income year they are earned. There are no carry-back or carry-forward provisions.

Neighborhood Assistance
A 60% credit of the amount contributed is available for expenditures on activities approved by municipalities such as: (1) neighborhood assistance; (2) job training or education; (3) community services; (4) crime prevention; (5) cash donations used for purchase of open space; or (6) community-based alcoholism prevention or treatment programs. A 100% credit is available for energy conservation or construction or rehabilitation of dwelling units for families of low and moderate income. The minimum amount for which a credit is granted is $250, the annual credit limit per business firm is $150,000 and the annual limit for all firms is $5 million. Unused credits may be carried back for 2 years.

Manufacturing facilities, service facilities, and enterprise zones
Manufacturing facilities: The credit ranges from 25% to 50% of the amount of tax that is allocable to a facility located in an Enterprise Zone or a municipality with an Entertainment District depending on whether the corporation is occupying a new or renovated facility or certain employment criteria is met. To qualify, the corporation must obtain certification from DECD. Unused credits may be carried forward 10 years.
Service facilities: The credit is based on certain employment criteria. It is available for between 15% and 50% of the amount of tax that is allocable to a service facility located in an Enterprise Zone or a municipality with an Entertainment District. To qualify for it, the corporation must obtain certification from DECD that it is occupying a new or renovated facility located within an Enterprise Zone or Entertainment District. Unused credits may be carried forward 10 years.
Enterprise Zones: The credit is available to qualified corporations for 100% of the corporationís tax liability for the first three taxable years and 50% of its liability for the next seven years. There are no carry-back or carry-forward provisions.

Machinery and equipment
The credit is available to small and medium-sized companies for the incremental increase in capital goods expenditures over the previous year. The credit is 10% for companies with 250 or fewer full-time, permanent employees and 5% for companies with 251 to 800 employees. There are no carry-back or carry-forward provisions.

Job Expansion Tax Credit
A three-year tax credit for businesses that create new jobs and hire certain Connecticut residents to fill them. The credit is $500 per month per new employee or $900 per month if the employee meets certain criteria. It applies to jobs created from January 1, 2012 to January 1, 2014. Small businesses (those with up to 50 full-time employees in Connecticut) qualify for a credit if they create at least one new job. Businesses that employ between 50 and 100 full-time employees in Connecticut must create at least five new jobs and those that employ more than 100 full-time employees must create at least 10.

Insurance Reinvestment Fund
The credit is available to investors in Insurance Reinvestment Funds. The credit is equal to the amount invested, which is taken over a 10-year period. The credit has recapture provisions under certain circumstances. Unused credits may be carried forward for five years. The credit is unavailable after 12/31/15.

Human capital
The credit is available for expenses related to: (1) job training; (2) work education; (3) donations or contributions to higher education institutions for the advancement of technology, including physical plant improvements; (4) day care facilities for children of employees; (5) childcare subsidies to employees; or (6) donations and contributions to the Individual Development Account Reserve Fund10. The credit is 5% of qualified expenditures. Unused credits may be carried forward 5 years.

Housing Program Contribution
The credit is available to firms making cash contributions to nonprofit organizations that develop, sponsor, or manage housing programs for families with low or moderate incomes. The credit is equal to the amount contributed. The minimum amount for which a credit is granted is $250 per firm. The annual limit for all firms is $10 million (of this total, $2 million is set aside for the Supportive Housing Pilots Initiative or the Next Steps Initiative and $1 million is set aside for workforce housing). The maximum amount a nonprofit organization may receive in the aggregate is $500,000. Unused credits may be carried backward or forward for 5 years.

Historic home rehabilitation, historic structure, and mixed use historic rehabilitation
Historic home rehabilitation: The credit is available for expenses associated with rehabilitating owner-occupied historic homes. The property must: (1) have 1 to 4 dwelling units, one of which is the principal residence of the owner, (2) be located in a federally qualified census tract, an economically distressed area or an urban or regional center, and (3) be listed individually on the National Register of Historic Places or located in a district listed in the National or State Register of Historic Places. In addition, DECD must certify that the property contributes to the districtís historic character. The minimum amount for which a credit is available is $25,000, the credit limit per dwelling unit is $30,000 (the home may have up to 4 dwelling units), and the annual limit for all taxpayers is $3 million. The owner must occupy the home for at least 5 years following the completion of the rehabilitation work. Unused credits may be carried forward for 4 years.
Historic structure: The credit is available to individuals, limited liability companies, and non-profit and for-profit corporations for expenses associated with rehabilitating historic commercial and industrial properties for residential use. The property must either be: (1) listed individually on the National Register of Historic Places or (2) located in a district listed in the National or State Register of Historic Places. In addition, DECD must certify that the property contributes to the districtís historic character. The credit is up to 25% of the qualified rehabilitation costs, the limit per structure is $2.7 million and the annual limit for all taxpayers is $15 million. Owners can claim the credit themselves or transfer it to others. Credit holders may claim a credit in the tax year when the property receives its certificate of occupancy. For multiphase projects, credit holders may claim a part of the credit in proportion to that part of the project that received a certificate of occupancy. Unused credits may be carried forward for 5 years.
Mixed use historic rehabilitation: The credit is available to individuals, limited liability companies, and nonprofit and for-profit corporations for expenses associated with rehabilitating historic property used for both residential and commercial purposes. The property must be an historic commercial or industrial property: (1) individually listed on the national or state Register of Historic Places or (2) located in an historic district listed on the national or state Register of Historic Places. In addition, DECD must certify that the property contributes to the district's historic character. The credit is up to 25% of the qualified rehabilitation costs or 30%, if a portion of the units are affordable to low- and moderate-income people. The total credit amount is up to $50 million per three-year cycle, beginning with FY 09 through FY 11. Tax credits for any single project are limited to 10% of the aggregate limit for all such tax credits for each three-year period.

Fixed capital
The credit is available for fixed capital which: (1) has an IRS class life of more than 4 years; (2) was not purchased from a related entity; (3) is not leased to another entity within 12 months of purchase; and (4) will be located and used in state for at least 5 full years following acquisition. The credit is 5% of qualified expenditures. There is a recapture provision if the fixed capital for which the credit is claimed is not located and used in state for 3 full years following its acquisition (100% credit recapture) or 5 full years following its acquisition (50% credit recapture). Unused credits may be carried forward 5 years.

Film production infrastructure
The credit is available for investments in state-certified infrastructure projects for the film and digital media industry. Credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of 3 transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits are not refundable. Credits may be claimed for the income year in which the eligible expenditures are made or may be carried forward for 3 years.

Film Production
The credit is available to companies that produce qualified entertainment content wholly or in part in this state. Qualified activities include production of: (1) motion pictures, (2) television programming, (3) sound recordings, (4) music videos, (5) video games, (6) commercials (infomercials are ineligible) and (7) certain interactive websites. The credit is administered by the Department of Economic and Community Development (DECD). Beginning with the 2010 income year, credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of three transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits can only be claimed for the income year in which the expenditures are made. Credits are not refundable. Unused credits may be carried forward for 3 years.

Electronic data processing
The credit is available for 100% of the local property tax paid on electronic data processing equipment, including computers, printers, peripheral computer equipment, bundled software and any other related equipment reported as Code 20 on the Personal Property Declaration. The credit is only for property tax liability and excludes any interest or penalties that the taxpayer may also be required to pay. It may only be taken when filing a final return and may not be used to calculate estimated payments. Unused credits may be carried forward for 5 years.

Digital Animation Production
The credit is available for developing and producing computer-generated animation content for public exhibition and distribution. To qualify for the credit, a company must: (1) be exclusively engaged in the production activity; (2) maintain a studio in this state; (3) employ at least 200 full-time employees; and (4) be certified by the Department of Economic and Community Development (DECD). Credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of three transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits can only be claimed for the income year in which the expenditures are made. The annual limit for all companies is $15 million. Companies receiving the digital animation credit are not eligible for the film production credit. Credits are not refundable. Unused credits may be carried forward for 3 years.

Apprenticeship training credit in construction, manufacturing, and plastics trades
The credit is available to corporations in the construction, manufacturing, plastics and plastics-related trades that employ apprentices. It is administered by the Department of Labor. For the manufacturing and plastics trades, the credit is the lesser of: (1) 50% of the actual wages paid to apprentices in the income year or (2) up to $4,800 per apprenticeship. For the construction trades, the credit is the lesser of: (1) 50% of the actual wages paid to the apprentice or (2) up to $4,000 per apprenticeship. The construction trades credit is awarded in the year the apprentice completes a 4-year program. There are no carry-back or carry-forward provisions.


INSURANCE PREMIUMS TAX CREDITS:

Urban and industrial reinvestment
The credit is available for investments associated with urban site remediation. The credit amount may not exceed the amount of state revenue that DECD determines will be generated by the site. There is a recapture provision if the actual amount of revenue generated is less than the total sum of tax credits claimed. The credit is limited to $100 million per project and $650 million for all projects. Unused credits may be carried forward for 5 years.

Job Expansion Tax Credit
A three-year tax credit for businesses that create new jobs and hire certain Connecticut residents to fill them. The credit is $500 per month per new employee or $900 per month if the employee meets certain criteria. It applies to jobs created from January 1, 2012 to January 1, 2014. Small businesses (those with up to 50 full-time employees in Connecticut) qualify for a credit if they create at least one new job. Businesses that employ between 50 and 100 full-time employees in Connecticut must create at least five new jobs and those that employ more than 100 full-time employees must create at least 10.

Insurance Reinvestment Fund
The credit is available to investors in Insurance Reinvestment Funds. The credit is equal to the amount invested, which is taken over a 10-year period. The credit has recapture provisions under certain circumstances.

Insurance Department Assessment Credit
Credit is for 80% of the Connecticut Insurance Department assessment paid by local domestic insurance companies whose assets do not exceed $95.0 million during the calendar year.

Housing Program Contribution
The credit is available to firms making cash contributions to nonprofit organizations that develop, sponsor, or manage housing programs for families with low or moderate incomes. The credit is equal to the amount contributed. The minimum amount for which a credit is granted is $250 per firm. The annual limit for all firms is $10 million (of this total, $2 million is set aside for the Supportive Housing Pilots Initiative or the Next Steps Initiative and $1 million is set aside for workforce housing). The maximum amount a nonprofit organization may receive in the aggregate is $500,000. Unused credits may be carried backward or forward for 5 years.

Historic home rehabilitation, historic structure, and mixed use historic rehabilitation
Historic home rehabilitation: The credit is available for expenses associated with rehabilitating owner-occupied historic homes. The property must: (1) have 1 to 4 dwelling units, one of which is the principal residence of the owner, (2) be located in a federally qualified census tract, an economically distressed area or an urban or regional center, and (3) be listed individually on the National Register of Historic Places or located in a district listed in the National or State Register of Historic Places. In addition, DECD must certify that the property contributes to the districtís historic character. The minimum amount for which a credit is available is $25,000, the credit limit per dwelling unit is $30,000 (the home may have up to 4 dwelling units), and the annual limit for all taxpayers is $3 million. The owner must occupy the home for at least 5 years following the completion of the rehabilitation work. Unused credits may be carried forward for 4 years.
Historic structure: The credit is available to individuals, limited liability companies, and non-profit and for-profit corporations for expenses associated with rehabilitating historic commercial and industrial properties for residential use. The property must either be: (1) listed individually on the National Register of Historic Places or (2) located in a district listed in the National or State Register of Historic Places. In addition, DECD must certify that the property contributes to the districtís historic character. The credit is up to 25% of the qualified rehabilitation costs, the limit per structure is $2.7 million and the annual limit for all taxpayers is $15 million. Owners can claim the credit themselves or transfer it to others. Credit holders may claim a credit in the tax year when the property receives its certificate of occupancy. For multiphase projects, credit holders may claim a part of the credit in proportion to that part of the project that received a certificate of occupancy. Unused credits may be carried forward for 5 years.
Mixed use historic rehabilitation: The credit is available to individuals, limited liability companies, and nonprofit and for-profit corporations for expenses associated with rehabilitating historic property used for both residential and commercial purposes. The property must be an historic commercial or industrial property: (1) individually listed on the national or state Register of Historic Places or (2) located in an historic district listed on the national or state Register of Historic Places. In addition, DECD must certify that the property contributes to the district's historic character. The credit is up to 25% of the qualified rehabilitation costs or 30%, if a portion of the units are affordable to low- and moderate-income people. The total credit amount is up to $50 million per three-year cycle, beginning with FY 09 through FY 11. Tax credits for any single project are limited to 10% of the aggregate limit for all such tax credits for each three-year period.

Film production infrastructure
The credit is available for investments in state-certified infrastructure projects for the film and digital media industry. Credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of 3 transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits are not refundable. Credits may be claimed for the income year in which the eligible expenditures are made or may be carried forward for 3 years.

Film Production
The credit is available to companies that produce qualified entertainment content wholly or in part in this state. Qualified activities include production of: (1) motion pictures, (2) television programming, (3) sound recordings, (4) music videos, (5) video games, (6) commercials (infomercials are ineligible) and (7) certain interactive websites. The credit is administered by the Department of Economic and Community Development (DECD). Beginning with the 2010 income year, credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of three transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits can only be claimed for the income year in which the expenditures are made. Credits are not refundable. Unused credits may be carried forward for 3 years.

Electronic data processing
The credit is available for 100% of the local property tax paid on electronic data processing equipment, including computers, printers, peripheral computer equipment, bundled software and any other related equipment reported as Code 20 on the Personal Property Declaration. The credit is only for property tax liability and excludes any interest or penalties that the taxpayer may also be required to pay. It may only be taken when filing a final return and may not be used to calculate estimated payments. Unused credits may be carried forward for 5 years.

Digital Animation Production
The credit is available for developing and producing computer-generated animation content for public exhibition and distribution. To qualify for the credit, a company must: (1) be exclusively engaged in the production activity; (2) maintain a studio in this state; (3) employ at least 200 full-time employees; and (4) be certified by the Department of Economic and Community Development (DECD). Credits may be: (1) sold or transferred to other eligible companies and (2) resold for a maximum of three transfers. Credit buyers and sellers must jointly notify DECD of a sale or transfer. Credits can only be claimed for the income year in which the expenditures are made. The annual limit for all companies is $15 million. Companies receiving the digital animation credit are not eligible for the film production credit. Credits are not refundable. Unused credits may be carried forward for 3 years.

Apprenticeship training credit in construction, manufacturing, and plastics trades
The credit is available to corporations in the construction, manufacturing, plastics and plastics-related trades that employ apprentices. It is administered by the Department of Labor. For the manufacturing and plastics trades, the credit is the lesser of: (1) 50% of the actual wages paid to apprentices in the income year or (2) up to $4,800 per apprenticeship. For the construction trades, the credit is the lesser of: (1) 50% of the actual wages paid to the apprentice or (2) up to $4,000 per apprenticeship. The construction trades credit is awarded in the year the apprentice completes a 4-year program. There are no carry-back or carry-forward provisions.

Urban and industrial reinvestment
The credit is available for investments associated with urban site remediation. The credit amount may not exceed the amount of state revenue that DECD determines will be generated by the site. There is a recapture provision if the actual amount of revenue generated is less than the total sum of tax credits claimed. The credit is limited to $100 million per project and $650 million for all projects. Unused credits may be carried forward for 5 years.


PERSONAL INCOME TAX CREDITS:

Job Expansion Tax Credit
A 3-year tax credit for businesses that create new jobs and hire certain Connecticut residents to fill them. The credit is $500 per month per new employee or $900 per month if the employee meets certain criteria. It applies to jobs created from January 1, 2012 to January 1, 2014. Small businesses (those with up to 50 full-time employees in Connecticut) qualify for a credit if they create at least one new job. Businesses that employ between 50 and 100 full-time employees in Connecticut must create at least five new jobs and those that employ more than 100 full-time employees must create at least 10.

Earned Income Tax Credit
A refundable state earned income tax credit (equal to 30% of the federal credit) available to taxpayers who work and earn incomes below certain levels. Credit amounts vary according to a taxpayerís income, filing status, the number of children he or she has.

Credit for property taxes paid
The credit is for Personal and Real Property Taxes paid on the taxpayer's primary residence or a motor vehicle. The credit is limited to two motor vehicles for Joint Filers and one motor vehicle for Single, Head of Household, and Married Filing Separate Filers.

Angel Investor Tax Credit
Available to taxpayers who invest in start-up, technology-based businesses in Connecticut. Each credit equals 25% of the cash investment, up to maximum of $ 250,000 in total credits for any investor.