General Assembly Substitute Bill No. 6584
January Session, 2011 *_____HB06584CE____032211____*
General Assembly
Substitute Bill No. 6584
January Session, 2011
*_____HB06584CE____032211____*
AN ACT ESTABLISHING A MANUFACTURING REINVESTMENT ACCOUNT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2011, and applicable to income years commencing on or after January 1, 2011) (a) For the purposes of this section, (1) "manufacturing reinvestment account" means a trust created or organized by a manufacturer and held by a Connecticut bank for the benefit of such manufacturer, to which the manufacturer may make cash contributions not to exceed the amount set forth in subsection (b) of this section for any income year. Moneys in a manufacturing reinvestment account shall not be invested in life insurance contracts or comingled with other property, and (2) "manufacturer" means any corporation subject to tax pursuant to chapter 208 of the general statutes that is engaged in the business of manufacturing as defined in subdivision (72) of section 12-81 of the general statutes.
(b) Any manufacturer may establish a manufacturing reinvestment account, provided (1) contributions in any income year shall not exceed the lesser of (A) two hundred fifty thousand dollars, or (B) such manufacturer's domestic gross receipts, (2) moneys may be held in such account for not more than five years, (3) distributions from such account shall be used by such manufacturer to purchase machinery, equipment or manufacturing facilities, as defined in said subdivision (72) of section 12-81, or for workforce training and development, and (4) disbursements shall be subject to tax under chapter 208 of the general statutes at a rate of three and one-half per cent.
(c) Any money remaining in a manufacturer's reinvestment account at the end of the five-year period shall be returned to the manufacturer who shall pay the full rate of tax on such amount under chapter 208 of the general statutes, provided such payment shall be deemed to be a timely payment if such tax is remitted to the Commissioner of Revenue Services not later than sixty days after the date of such return.
Sec. 2. Subdivision (1) of subsection (a) of section 12-217 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011, and applicable to income years commencing on and after January 1, 2012):
(a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income, (A) all items deductible under the Internal Revenue Code effective and in force on the last day of the income year except (i) any taxes imposed under the provisions of this chapter which are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation which are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (iv) in the case of any captive real estate investment trust, the deduction for dividends paid provided under Section 857(b)(2) of the Internal Revenue Code, and (B) additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code, and (C) in the case of a taxpayer maintaining an international banking facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided, no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section, and (D) additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation, and (E) additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land, and (F) in the case of manufacturers, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 1 of this act in the taxable year that such contribution is made.
Sec. 3. Subsection (a) of section 36a-250 of the general statutes is amended by adding a new subdivision (42) as follows (Effective July 1, 2011):
(NEW) (42) Act as trustee or custodian of a manufacturing reinvestment account established pursuant to section 1 of this act.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2011, and applicable to income years commencing on or after January 1, 2011 New section
Sec. 2 July 1, 2011, and applicable to income years commencing on and after January 1, 2012 12-217(a)(1)
Sec. 3 July 1, 2011 36a-250(a)
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2011, and applicable to income years commencing on or after January 1, 2011
New section
Sec. 2
July 1, 2011, and applicable to income years commencing on and after January 1, 2012
12-217(a)(1)
Sec. 3
July 1, 2011
36a-250(a)
Statement of Legislative Commissioners:
In section 1, the definition of "manufacturer" was added for clarity, the reference in subsection (a) to "two hundred thousand dollars" was changed to "the amount set forth in subsection (b) of this section" for accuracy, and the reference in subsection (a) to "the Department of Economic and Community Development" was changed to "manufacturer" for internal consistency and to represent the committee's intent.
CE Joint Favorable Subst.
CE
Joint Favorable Subst.