General Assembly Raised Bill No. 1218
January Session, 2011 LCO No. 4977
*04977_______FIN*
Referred to Committee on Finance, Revenue and Bonding
Introduced by:
(FIN)
General Assembly
Raised Bill No. 1218
January Session, 2011
LCO No. 4977
*04977_______FIN*
Referred to Committee on Finance, Revenue and Bonding
Introduced by:
(FIN)
AN ACT CONCERNING VARIOUS CHANGES TO TITLE 12.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2011) (a) As used in this section:
(1) "Commissioner" means the Commissioner of Revenue Services;
(2) "Department" means the Department of Revenue Services;
(3) "Issuance of a license" means the granting, renewing, amending or supplementing of a license;
(4) "License" means the whole or part of any public agency permit, certificate, approval, registration, charter or similar form of permission to engage in a profession, trade, business or occupation and any notification required to be made to any public agency that a profession, trade, business or occupation is being engaged in or is expected to be commenced;
(5) "License applicant" means the person making application for issuance of a license and any other person that is required to be included in such application;
(6) "Person" means an individual, partnership, society, association, joint stock company, corporation, limited liability company, estate, receiver, trustee, assignee, referee or any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, or any combination of the foregoing;
(7) "Public agency" means any department within the executive branch of state government as listed in section 4-38c of the general statutes. "Public agency" includes the Department of Education, the Department of Higher Education, the Department of Information Technology and the Division of Criminal Justice;
(8) "Taxes due to this state" means taxes, including additions to tax for penalties and interest, which are imposed under the laws of this state, which are finally due and payable to the commissioner, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed. "Taxes due to this state" does not include taxes with respect to which a payment agreement, not in default, has been entered into by a taxpayer and the department.
(b) The Commissioner of Revenue Services shall adopt regulations, in accordance with the provisions of chapter 54 of the general statutes, in consultation with the commissioner of a public agency that issues licenses, to ensure that no license shall be issued to an applicant until such applicant has paid all taxes due to this state. Such regulations shall (1) establish a means for a public agency, prior to the issuance of a license, to verify that an applicant has no taxes due to this state, (2) provide that, if an applicant has taxes due to this state, the commissioner shall provide notice and an opportunity for a hearing to such applicant, which hearing shall be limited to verifying whether such applicant has taxes due to this state, and (3) provide that, if it is established to the satisfaction of the commissioner that an undue hardship would otherwise result to a license applicant, a license shall be issued to the license applicant, notwithstanding the fact that such applicant has taxes due to this state. Such regulations shall also provide that, if such license applicant is not an individual, there shall be a means for a public agency, prior to the issuance of a license, to verify that the principals of a business entity have no taxes due to this state. The sole right to any hearing authorized pursuant to such regulations shall be to the commissioner and not to the public agency issuing the license.
Sec. 2. Subsection (b) of section 4-28o of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) (1) The commissioner may disclose to the Attorney General any information received under sections 4-28k to 4-28r, inclusive, and requested by the Attorney General for purposes of determining compliance with and enforcing the provisions of sections 4-28k to 4-28r, inclusive. The commissioner and the Attorney General shall share with each other the information received under sections 4-28k to 4-28r, inclusive, and may share such information with other federal, state or local agencies only for purposes of enforcement of the provisions of sections 4-28h to 4-28r, inclusive, or corresponding laws of other states.
(2) The commissioner may disclose to the Attorney General any returns or return information, as defined in section 12-15, received pursuant to this chapter or chapter 214 or 214a, when such returns or return information is relevant to any arbitration or other dispute resolution proceeding to which the state is a party, created or authorized under the terms of the Master Settlement Agreement, as defined in section 4-28h, or any amendments to said agreement. The Attorney General may further disclose such returns or return information in such arbitration or other dispute resolution proceeding.
Sec. 3. Subsection (b) of section 12-35f of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) (1) Upon the request and certification of the tax officer of a claimant state to the Commissioner of Revenue Services that a taxpayer owes taxes to such claimant state, the commissioner may withhold all or a portion of any refund to which such taxpayer would otherwise be entitled and pay over such withheld amount to the claimant state in accordance with the provisions of this section. The commissioner shall not withhold a refund unless the laws of the claimant state allow the Commissioner of Revenue Services to certify that a taxpayer owes taxes to this state and to request the tax officer of the claimant state to withhold all or a portion of any refund to which such taxpayer would otherwise be entitled, and provide for the payment over of such withheld amount to this state.
(2) Such certification shall include the full name and address of the taxpayer; the taxpayer's Social Security number or federal employer identification number; the amount of taxes owed to such state; [, including a detailed statement for each taxable period showing tax, interest and penalty;] and a statement that any administrative or judicial remedies, or both, have been exhausted or have lapsed and that the amount of taxes is legally enforceable under the laws of such state.
(3) Upon receipt by the commissioner of the required certification, [he] the commissioner shall notify the taxpayer, if the taxpayer is otherwise entitled to a tax refund from this state, that [he] the commissioner has received a request from the claimant state to withhold all or a portion of any refund, that the taxpayer has the right to protest the withholding of the refund, that failure to file a protest in accordance with subdivision (4) of this subsection shall constitute a waiver of any demand against this state on account of such withheld amount and that the withheld amount will be paid over to the claimant state. [The notice shall include a copy of the certification by the tax officer of such claimant state.] Thirty days after the date on which [it is mailed, a notice under this subdivision] a notice under this subdivision is mailed, such notice shall be final except only for such amounts as to which the taxpayer has filed, as provided in subdivision (4) of this subsection, a written protest with the Commissioner of Revenue Services.
(4) Any taxpayer notified in accordance with subdivision (3) of this subsection may, on or before the thirtieth day after the mailing of such notice by the Commissioner of Revenue Services, protest the withholding of all or a portion of a refund by filing with the commissioner a written protest in which the taxpayer shall set forth the grounds on which the protest is based. If a timely protest is filed, the commissioner shall impound the claimed amount of the refund, pay to the taxpayer the unclaimed amount, if any, of the refund, send a copy of the protest to the claimant state for determination of the protest on its merits in accordance with the laws of that state, and pay over to the taxpayer the impounded amount if the claimant state shall fail on or before the forty-fifth day after the sending of the copy of the protest by the commissioner to such claimant state to recertify to the commissioner that the claimant state has reviewed the stated grounds on which the protest is based, and to recertify the amount of taxes which is finally due and payable to the claimant state, which is legally enforceable under the laws of the claimant state against the taxpayer, and with respect to which any administrative or judicial remedies, or both, have been exhausted or have lapsed.
(5) Where the amount withheld in accordance with this subsection is a refund of any tax imposed upon the income of individuals and in connection with which the taxpayer filed a joint return with his or her spouse, and the spouse is not a taxpayer, the spouse shall have the right to be paid his or her portion of the refund by establishing his or her share of such refund. The amount of such spouse's share of such refund shall be established by recomputing the spouse's share of the joint liability and subtracting that amount from the taxpayer's contribution toward the joint liability, provided the amount of the overpayment refunded to the spouse shall not exceed the amount of the joint overpayment.
(6) Subject to the provisions of subdivisions (3), (4) and (5) of this subsection, the commissioner shall pay over to the claimant state the entire amount withheld or the amount certified, whichever is less; pay any refund in excess of the certified amount to the taxpayer; and, if the amount certified exceeds the amount withheld, withhold amounts from subsequent refunds due to the taxpayer, provided the claimant state agrees to withhold subsequent refunds due to taxpayers certified to the claimant state by the commissioner.
Sec. 4. Section 12-216a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to income years commencing on or after January 1, 2010):
(a) Any company that derives income from sources within this state [, or] and that has a substantial economic presence within this state, evidenced by a purposeful direction of business toward this state, examined in light of the frequency, quantity and systematic nature of a company's economic contacts with this state, without regard to physical presence, and to the extent permitted by the Constitution of the United States, shall be liable for the tax imposed under this chapter. Such company shall apportion its net income under the provisions of this chapter.
(b) The provisions of subsection (a) of this section shall not apply to any company that is treated as a foreign corporation under the Internal Revenue Code and has no income effectively connected with a United States trade or business, provided, to the extent that a company that is treated as a foreign corporation under the Internal Revenue Code has income effectively connected with a United States trade or business, such company's gross income shall be its income effectively connected with its United States trade or business. For net income tax apportionment purposes, only property utilized in, payroll attributable to and receipts effectively connected with such company's United States trade or business shall be considered for purposes of calculating such company's apportionment fraction. "Income effectively connected with a United States trade or business" shall be determined in accordance with the provisions of the Internal Revenue Code.
Sec. 5. Section 12-242g of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011, and applicable to estimated corporation business tax payments for income years commencing on or after January 1, 2012):
(a) If a company has paid as an installment of estimated tax an amount in excess of the amount determined to be the correct amount of such installment, such amount shall be credited against any unpaid installment or against the tax. If the amount already paid, whether or not on the basis of installments, exceeds the amount determined to be the correct amount of the tax, the company shall be paid by the State Treasurer, upon order of the Comptroller, the amount of such overpayment. [The commissioner may prescribe regulations providing for the crediting against the estimated tax for any taxable year of the amount determined to be an overpayment of the corporation business tax for a preceding taxable year.]
(b) If a company has filed its tax return under this chapter for the income year on or before the due date of such return or, if an extension of time to file has been requested and granted, the extended due date of such return, any overpayment reported on such return, if the company has elected to credit such overpayment against the company's estimated tax for the succeeding income year, shall be treated as if paid on the due date of the first required installment of estimated tax for such succeeding income year. Such reported overpayment shall be credited against otherwise unpaid required installments in the order in which such installments are required to be paid under section 12-242d.
Sec. 6. Subdivision (3) of subsection (a) of section 12-686 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011, and applicable to tax periods ending on or after said date):
(3) (A) Except as otherwise provided in subsections (b) and (c) of this section, the commissioner may require every employer who is deducting and withholding Connecticut income tax from employee wages to pay such tax during the twelve-month period following a determination of liability under this subdivision, by one of the means of electronic funds transfer approved by the department, if the commissioner determines that the amount of Connecticut income tax deducted and withheld from employee wages by such employer was more than two thousand dollars for the twelve-month period ending on the June thirtieth immediately preceding the quarterly period with respect to which the requirement to pay over tax by electronic funds transfer is established. The commissioner, in determining whether tax liability is more than two thousand dollars, shall base such determination on the taxes reported to be due on the quarterly withholding tax returns of such employer related to the period under examination. If any such tax return of such [person] employer for such period has not been filed, the commissioner may base such determination on any information available to the commissioner.
(B) Except as otherwise provided in subsections (b) and (c) of this section, the commissioner may require every payer, as defined in section 12-707, who is deducting and withholding Connecticut income tax from nonpayroll amounts, as defined in section 12-707, to pay such tax for the calendar year, following a determination of liability under this subdivision, by one of the means of electronic funds transfer approved by the department, if the commissioner determines that the amount of Connecticut income tax deducted and withheld from nonpayroll amounts by such payer for the look-back calendar year, as defined in section 12-707, was more than two thousand dollars. The commissioner, in determining whether the amount of Connecticut income tax deducted and withheld for the look-back calendar year, is more than two thousand dollars, shall base such determination on the tax reported to be due on the withholding tax return of such payer for such look-back calendar year. If any such tax return of such payer for such period has not been filed, the commissioner may base such determination on any information available to the commissioner.
Sec. 7. Section 12-707 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011, and applicable to sales of a business or stock of goods occurring on or after said date):
(a) (1) Each employer required to deduct and withhold tax under this chapter from the wages of employees shall be liable for such tax and shall file a withholding return as prescribed by the Commissioner of Revenue Services and pay over to the commissioner, or to a depositary designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.
(2) Each payer of nonpayroll amounts shall deduct and withhold tax under this chapter from the nonpayroll amounts of payees, shall be liable for such tax, and shall file a withholding return as prescribed by the commissioner and pay over to the commissioner, or to a depository designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.
(b) (1) (A) With respect to the tax required to be deducted and withheld under this chapter from wages paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each employer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If an employer is a weekly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If an employer is a monthly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If an employer is a quarterly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection. Notwithstanding any provision of this subsection, if an employer is a household employer, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (6) of this subsection.
(B) With respect to the tax required to be deducted and withheld under this chapter from nonpayroll amounts paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each payer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If a payer is a weekly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If a payer is a monthly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If a payer is a quarterly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection.
(2) (A) The annual determination for an employer required to deduct and withhold tax under this chapter shall be based on the employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period, provided, if any employer fails timely to file one or more required withholding tax returns for the four quarterly periods within the twelve-month look-back period, the commissioner may base the annual determination for the employer on any information available to the commissioner. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than ten thousand dollars, the employer is a weekly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than two thousand dollars but not more than ten thousand dollars, the employer is a monthly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was two thousand dollars or less, the employer is a quarterly remitter for the calendar year next succeeding such twelve-month period. Notwithstanding any provision of this section, if an employer is a seasonal employer, the annual determination shall be based on the seasonal employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period multiplied by a fraction, the numerator of which is four, and the denominator of which is the number of quarterly periods during such twelve-month period that the employer paid wages to employees.
(B) The annual determination for a payer required to deduct and withhold tax under this chapter shall be based on the payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year, provided, if any payer fails timely to file the required withholding tax return for the look-back calendar year, the commissioner may base the annual determination for the payer on any information available to the commissioner. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than ten thousand dollars, the payer is a weekly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than two thousand dollars but not more than ten thousand dollars, the payer is a monthly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was two thousand dollars or less, the payer is a quarterly remitter for the calendar year for which the annual determination is being made.
(3) (A) An employer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the Wednesday next succeeding the weekly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the Wednesday next succeeding the weekly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(4) (A) An employer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the fifteenth day of the month next succeeding the month during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the fifteenth day of the month next succeeding the month during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(5) (A) An employer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the last day of the month next succeeding the quarterly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the last day of the month next succeeding the quarterly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(6) An employer that is a household employer shall pay over to the department the tax required to be deducted and withheld under this chapter on or before the April fifteenth next succeeding the calendar year during which the wages from which the tax was required to be deducted and withheld were paid to household employees.
(c) In the case of an overpayment of tax under this chapter by an employer, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld by the employer.
(d) The amount of tax required to be deducted and withheld and paid over to the commissioner under this chapter, when so deducted and withheld, shall be held to be a special fund in trust for the state. No employee or other person shall have any right of action against the employer in respect to any moneys deducted and withheld from wages and paid over to the commissioner in compliance or in intended compliance with this chapter.
(e) (1) If an employer required to deduct and withhold tax under this chapter from the wages of employees and to pay over to the commissioner the taxes so required to be deducted and withheld sells the employer's business or stock of goods or quits the employer's business, the taxes required to be deducted and withheld under this chapter and paid over to the commissioner under this chapter prior to such sale or quitting of the business, together with any interest and penalties imposed on those taxes, become due and payable immediately, and such employer shall make a final return not later than thirty days after the date of selling or quitting the business. The employer's successor, if any, shall withhold sufficient of the purchase price to cover the amount of the taxes, interest and penalties due and unpaid until the former employer produces a receipt from the commissioner showing that the taxes, interest and penalties have been paid or a certificate indicating that no such taxes are due.
(2) If the purchaser of a business or stock of goods fails to withhold the purchase price as required, the purchaser shall be personally liable, to the extent of the purchase price, valued in money, for the payment of the taxes, interest and penalties accrued and unpaid during the operation of the business by the former employer. The commissioner shall assess the taxes, interest and penalties due from the purchaser under this subsection and shall give notice of such proposed assessment to the purchaser in the manner provided in section 12-728. Not later than sixty days after receiving a written request from a purchaser for a certificate indicating that no taxes are due, the commissioner shall either issue the certificate or mail notice to the purchaser at said purchaser's address as it appears on the records of the commissioner of the amount that must be paid as a condition of issuing the certificate. Failure of the commissioner to mail the notice shall release the purchaser from any further obligation to withhold sufficient of the purchase price as provided in subdivision (1) of this subsection.
[(e)] (f) As used in this section:
(1) "Employer" means an employer, as defined in Section 3401 of the Internal Revenue Code;
(2) "Payer" means a person making a payment of nonpayroll amounts to one or more payees;
(3) "Payee" means a person receiving a payment of nonpayroll amounts from a payer;
(4) "Nonpayroll amounts" includes (A) gambling winnings, other than Connecticut lottery winnings, that are paid to a resident, or to a person receiving payment on behalf of a resident, and that are subject to federal income tax withholding; (B) Connecticut lottery winnings that are required to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service, whether or not subject to federal income tax withholding, whether paid to a resident, nonresident or a part-year resident, and whether paid to an individual, trust or estate; (C) pension and annuity distributions, where the recipient is a resident individual and has requested that tax be deducted and withheld under this chapter; (D) military retired pay, where the payee is a resident individual and has requested that tax be deducted and withheld under this chapter; (E) unemployment compensation, where the recipient has requested that tax be deducted and withheld under this chapter; and (F) payments made to an athlete or entertainer, where the payments are not wages for federal income tax withholding purposes and where the commissioner requires the payer to deduct and withhold tax under this chapter;
(5) "Reported liability" means, in the case of an employer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the employer's withholding tax returns for the four quarterly periods within the twelve-month look-back period, and, in the case of a payer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the payer's withholding tax return for the look-back calendar year;
(6) "Twelve-month look-back period" means the twelve-month period that ended on the June thirtieth next preceding the calendar year for which the annual determination for an employer is made by the commissioner;
(7) "Look-back calendar year" means the calendar year preceding by two years the calendar year for which the annual determination for a payer is made by the commissioner;
(8) "Seasonal employer" means an employer that regularly in the same one or more quarterly periods of each calendar year pays no wages to employees;
(9) "Household employee" means an employee whose services of a household nature in or about a private home of an employer constitute domestic service in a private home of the employer, as the phrase is used in Section 3121(a)(7) of the Internal Revenue Code or in regulations adopted thereunder;
(10) "Household employer" means an employer of a household employee;
(11) "Weekly period" means the seven-day period beginning on a Saturday and ending on the following Friday; and
(12) "Quarterly period" means the period of three full months beginning on the first day of January, April, July or October.
Sec. 8. Subsection (b) of section 12-733 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years commencing on or after January 1, 2011):
(b) (1) If the taxpayer omits from Connecticut adjusted gross income, in the case of an individual, or from Connecticut taxable income, in the case of a trust or estate, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income or Connecticut taxable income, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer [within] not later than six years after the date on which the return is filed. For purposes of this [subsection] subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the Commissioner of Revenue Services of the nature and the amount of such item.
(2) If the taxpayer omits from the Connecticut adjusted gross income derived from or connected with sources within this state, in the case of a nonresident individual or part-year resident individual, or from Connecticut taxable income derived from or connected with sources within this state, in the case of a nonresident trust or estate of part-year resident trust, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within this state or Connecticut taxable income derived from or connected with sources within this state, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer [within] not later than six years after the date on which the return is filed. For purposes of this [subsection] subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the [Commissioner of Revenue Services] commissioner of the nature and the amount of such item.
(3) If an employer, as defined in section 12-707, as amended by this act, omits from Connecticut wages an amount properly includable that is in excess of twenty-five per cent of the amount of Connecticut wages stated in the Connecticut withholding tax return required under section 12-707, as amended by this act, a notice of a proposed deficiency assessment may be mailed to the employer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.
(4) If a pass-through entity, as defined in subparagraph (D) of subdivision (2) of subsection (b) of section 12-719, omits from the Connecticut adjusted gross income derived from or connected with sources within Connecticut of any nonresident individual who is a member of such pass-through entity an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within Connecticut stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.
Sec. 9. Subdivision (80) of section 12-412 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to all open tax periods):
(80) (A) Sales and the storage, use or other consumption of special equipment installed in a motor vehicle for the exclusive use of a person with physical disabilities, and repair or replacement parts for such equipment, whether such repair or replacement parts are purchased separately or in conjunction with such equipment, and whether such parts continue the original function or enhance the functionality of such equipment.
(B) When a motor vehicle in which special equipment exclusively for the use of a person with physical disabilities has previously been installed is sold by a licensed motor vehicle dealer for use by a person with physical disabilities, the taxes imposed by this chapter shall not apply to the portion of the sales price attributable to such equipment. Unless established otherwise, the portion of the sales price attributable to the motor vehicle shall be deemed to be the value determined pursuant to subsection (b) of section 12-431, as amended by this act.
Sec. 10. Section 12-431 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to all open tax periods):
(a) (1) Except as otherwise provided in subdivision (2) or (3) of this subsection, in case of the purchase of any motor vehicle, snowmobile, vessel or aircraft other than from a licensed motor vehicle dealer or licensed motor vehicle lessor, a snowmobile dealer, a licensed marine dealer or a retailer of aircraft, respectively, the receipts therefrom shall not be included in the measure of the sales tax, but the purchaser thereof shall pay a use tax on the total purchase price thereof to the Commissioner of Revenue Services, as provided in section 12-411, in the case of tangible personal property purchased from a retailer, and, in the case of motor vehicles, vessels and snowmobiles, before obtaining an original or transferal registration, in accordance with regulations prescribed by the Commissioner of Revenue Services and on forms approved by the Commissioner of Revenue Services and the Commissioner of Motor Vehicles, and, in the case of aircraft, before obtaining an original or transferal registration, in accordance with regulations prescribed by the Commissioner of Revenue Services and on forms approved by the Commissioner of Revenue Services and the Commissioner of Transportation.
(2) No use tax shall be payable in cases of purchase (A) when the purchaser is the spouse, mother, father, brother, sister or child of the seller, (B) when a motor vehicle or vessel is sold in connection with the organization, reorganization or liquidation of an incorporated business, provided the last taxable sale or use of the motor vehicle or vessel was subjected to a tax imposed by this chapter and the purchaser is the incorporated business or a stockholder thereof, (C) when a motor vehicle is sold in connection with the organization or termination of a partnership or limited liability company, provided the last taxable sale or use of the motor vehicle was subjected to a tax imposed by this chapter and the purchaser is the partnership or limited liability company, as the case may be, or a partner or member, thereof, as the case may be, or (D) when a motor vehicle which has been declared a total loss pursuant to the provisions of section 14-16c is rebuilt for sale or use, provided the purchaser was subjected to the tax imposed by this chapter for the last taxable sale of said vehicle.
(3) When a motor vehicle in which special equipment has previously been installed exclusively for the use of a person with physical disabilities is sold to a purchaser with physical disabilities, the purchaser shall pay a use tax on the total purchase price of the vehicle, less the portion of such price attributable to such special equipment. Unless established otherwise, the portion of the purchase price attributable to the motor vehicle shall be deemed to be the value determined pursuant to subsection (b) of this section.
(b) In order to determine the total purchase price of a motor vehicle for the purposes of this section, the commissioner shall, by regulation, adopt by reference a book of valuations, for various purposes, of motor vehicles published by a nationally recognized organization. The commissioner shall, by regulation, determine which of the various valuations of motor vehicles contained in any such book is appropriate for the purposes of this section and such value shall, regardless of the value placed on the motor vehicle at the time of the purchase by the parties to such transaction, be presumed to be the total purchase price of such motor vehicle for the purposes of this section unless the purchaser can prove to the satisfaction of the commissioner that such value is incorrect.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2011 New section
Sec. 2 from passage 4-28o(b)
Sec. 3 from passage 12-35f(b)
Sec. 4 from passage and applicable to income years commencing on or after January 1, 2010 12-216a
Sec. 5 October 1, 2011, and applicable to estimated corporation business tax payments for income years commencing on or after January 1, 2012 12-242g
Sec. 6 July 1, 2011, and applicable to tax periods ending on or after said date 12-686(a)(3)
Sec. 7 July 1, 2011, and applicable to sales of a business or stock of goods occurring on or after said date 12-707
Sec. 8 from passage and applicable to taxable years commencing on or after January 1, 2011 12-733(b)
Sec. 9 from passage and applicable to all open tax periods 12-412(80)
Sec. 10 from passage and applicable to all open tax periods 12-431
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2011
New section
Sec. 2
from passage
4-28o(b)
Sec. 3
from passage
12-35f(b)
Sec. 4
from passage and applicable to income years commencing on or after January 1, 2010
12-216a
Sec. 5
October 1, 2011, and applicable to estimated corporation business tax payments for income years commencing on or after January 1, 2012
12-242g
Sec. 6
July 1, 2011, and applicable to tax periods ending on or after said date
12-686(a)(3)
Sec. 7
July 1, 2011, and applicable to sales of a business or stock of goods occurring on or after said date
12-707
Sec. 8
from passage and applicable to taxable years commencing on or after January 1, 2011
12-733(b)
Sec. 9
from passage and applicable to all open tax periods
12-412(80)
Sec. 10
from passage and applicable to all open tax periods
12-431
Statement of Purpose:
To make various changes to title 12, including limiting issuance of licenses to persons owing taxes, allowing disclosure of returns and return information in connection with disputes under the Master Settlement Agreement, clarifying the process for offsets of tax refunds, clarifying the treatment of foreign companies for purposes of economic nexus, enabling business tax overpayments to be credited to later tax payments, extending requirements for tax payments by electronic funds transfer, requiring purchaser to be liable for seller's withholding tax liability, providing procedures for deficiency assessments in the case of certain taxes owed by employers and pass-through entities, and allowing a partial sales and use tax exemption for purchases of motor vehicles equipped for the use of persons with physical disabilities.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]