| 11 | 29 | | |
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| 12 | 30 | | AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE GOVERNOR'S BUDGET. |
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| 13 | 31 | | |
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| 14 | 32 | | Be it enacted by the Senate and House of Representatives in General Assembly convened: |
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| 15 | 33 | | |
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| 16 | 34 | | Section 1. (Effective from passage) (a) It is found and declared that the state of Connecticut derives revenue from a variety of taxes, fees and other sources, including the state sales and use tax and motor fuels tax; it is fair and reasonable to refund the existing state budget surplus in the form of a refund of nonbusiness consumer sales and use tax and motor fuels tax paid by residents of this state in calendar year 2013; information concerning the amount of sales and use tax paid at various income levels is contained in the 2013 Optional State Sales Tax Table promulgated by the United States Secretary of the Treasury; information concerning the amount of gasoline consumed per capita in Connecticut and the motor fuels tax rate are contained in the Economic Report of the Governor; it is fair and reasonable to use information contained in those reports to determine the share of the sales and use tax and motor fuels tax refund due each eligible individual since no effective or practical mechanism exists for determining the amount of actual sales and use tax and motor fuels tax paid by each eligible individual and therefore, it is fair and reasonable to provide a fixed amount of sales and use tax and motor fuels tax refund to all individuals since such information shows that the amount of spending on sales and use tax and motor fuels tax is disproportionate to income levels. |
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| 17 | 35 | | |
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| 18 | 36 | | (b) (1) For purposes of this section, an "eligible individual" means a resident of this state with a federal adjusted gross income of less than two hundred thousand dollars or, in the case of joint filers, with a federal adjusted gross income of less than four hundred thousand dollars who: (A) Is required to file and timely files or timely files an extension to file a resident income tax return with the Commissioner of Revenue Services for the taxable year commencing on January 1, 2013; (B) is not required to file a resident income tax return for the taxable year commencing on January 1, 2013, with the Commissioner of Revenue Services, but is required to file and files or files an extension to file a federal income tax return with the Commissioner of Internal Revenue; (C) is not required to file a resident income tax return for the taxable year commencing on January 1, 2013, with the Commissioner of Revenue Services, but is a recipient of a federal earned income tax credit for such taxable year; or (D) received benefits for the taxable year commencing on January 1, 2013, under Title II of the Social Security Act, as amended from time to time, and was not required to file an income tax return with the Commissioner of Revenue Services or the Commissioner of Internal Revenue for such taxable year. |
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| 19 | 37 | | |
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| 20 | 38 | | (2) For the purposes of subparagraphs (B) to (D), inclusive, of subdivision (1) of this subsection, an individual shall be deemed a resident of this state provided such individual was a resident of this state on the last day of calendar year 2013. |
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| 21 | 39 | | |
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| 22 | 40 | | (c) Each eligible individual shall be entitled to a sales and use tax and motor fuels tax refund for such taxes paid in calendar year 2013. |
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| 23 | 41 | | |
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| 24 | 42 | | (d) The amount of such refund shall be fifty-five dollars or, for residents filing jointly, one hundred ten dollars. |
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| 25 | 43 | | |
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| 26 | 44 | | (e) Amounts refunded pursuant to this section shall be subject to the provisions for set-off as provided in sections 12-739 and 12-742 of the general statutes. |
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| 27 | 45 | | |
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| 28 | 46 | | (f) Amounts refunded pursuant to this section shall not be considered income for purposes of sections 8-119l, 12-170d, 12-170aa, 17b-550, 17b-812, 47-88d and 47-287 of the general statutes. |
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| 29 | 47 | | |
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| 30 | 48 | | (g) The Commissioner of Revenue Services shall notify the State Comptroller of the names and addresses of the eligible individuals for the refunds pursuant to this section, and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to the eligible individuals. |
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| 31 | 49 | | |
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| 32 | 50 | | (h) The Commissioner of Revenue Services, in the commissioner's sole discretion, may determine that an individual qualifies as an eligible individual based upon such individual satisfying the commissioner that such individual was a resident of this state as provided in this section. |
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| 33 | 51 | | |
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| 34 | 52 | | Sec. 2. (Effective from passage) Not later than June 30, 2014, the Comptroller shall designate up to one hundred fifty-five million dollars from the resources of the General Fund for the fiscal year ending June 30, 2014, to be reserved for use in the payment of refunds as provided in section 1 of this act. Not later than April 1, 2015, the Commissioner of Revenue Services shall notify the Comptroller of any part of such resources not refunded to eligible individuals as provided in section 1 of this act, and the Comptroller may credit such resources not refunded to the resources of the General Fund for the fiscal year ending June 30, 2015. |
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| 35 | 53 | | |
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| 36 | 54 | | Sec. 3. Subdivision (7) of section 12-201 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage): |
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| 37 | 55 | | |
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| 38 | 56 | | (7) "Gross direct premiums" means all receipts of premiums from policyholders and applicants for policies, whether received in the form of money or other valuable consideration, but excluding (A) annuity premiums and considerations and premiums received for reinsurances assumed from other insurance companies, [and] (B) premiums received after July 1, 1990, and before January 1, 1995, for any special health care plan, as defined in section 38a-564, and (C) premiums received on or after July 1, 2014, for any new or renewal contract or policy to provide health care coverage to municipal employees, municipal retirees and dependents of such employees or retirees; |
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| 39 | 57 | | |
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| 40 | 58 | | Sec. 4. Subsection (b) of section 12-202a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage): |
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| 41 | 59 | | |
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| 42 | 60 | | (b) Notwithstanding the provisions of subsection (a) of this section, the tax shall not apply to: |
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| 43 | 61 | | |
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| 44 | 62 | | (1) Any new or renewal contract or policy entered into with the state on or after July 1, 1997, to provide health care coverage to state employees, retirees and their dependents; |
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| 45 | 63 | | |
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| 46 | 64 | | (2) Any subscriber charges received from the federal government to provide coverage for Medicare patients; |
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| 47 | 65 | | |
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| 48 | 66 | | (3) Any subscriber charges received under a contract or policy entered into with the state to provide health care coverage to Medicaid recipients which charges are attributable to a period on or after January 1, 1998; |
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| 49 | 67 | | |
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| 50 | 68 | | (4) Any new or renewal contract or policy entered into with the state on or after April 1, 1998, to provide health care coverage to eligible beneficiaries under the HUSKY Plan, Part A, HUSKY Plan, Part B, or HUSKY Plus programs, each as defined in section 17b-290; |
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| 51 | 69 | | |
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| 52 | 70 | | (5) Any new or renewal contract or policy entered into with the state on or after February 1, 2000, to provide health care coverage to retired teachers, spouses or surviving spouses covered by plans offered by the state teachers' retirement system; |
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| 53 | 71 | | |
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| 54 | 72 | | (6) Any new or renewal contract or policy entered into on or after July 1, 2001, and prior to July 1, 2014, to provide health care coverage to employees of a municipality and their dependents under a plan procured pursuant to section 5-259; |
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| 55 | 73 | | |
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| 56 | 74 | | (7) Any new or renewal contract or policy entered into on or after July 1, 2001, to provide health care coverage to employees of nonprofit organizations and their dependents under a plan procured pursuant to section 5-259; |
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| 57 | 75 | | |
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| 58 | 76 | | (8) Any new or renewal contract or policy entered into on or after July 1, 2003, to provide health care coverage to individuals eligible for a health coverage tax credit and their dependents under a plan procured pursuant to section 5-259; |
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| 59 | 77 | | |
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| 60 | 78 | | (9) Any new or renewal contract or policy entered into on or after July 1, 2005, to provide health care coverage to employees of community action agencies and their dependents under a plan procured pursuant to section 5-259; [or] |
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| 61 | 79 | | |
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| 62 | 80 | | (10) Any new or renewal contract or policy entered into on or after July 1, 2005, to provide health care coverage to retired members and their dependents under a plan procured pursuant to section 5-259; or |
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| 63 | 81 | | |
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| 64 | 82 | | (11) Any new or renewal contract or policy entered into on or after July 1, 2014, to provide health care coverage to municipal employees, municipal retirees and dependents of such employees or retirees. |
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| 65 | 83 | | |
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| 66 | 84 | | Sec. 5. Section 12-412 of the 2014 supplement to the general statutes is amended by adding subdivision (120) as follows (Effective July 1, 2014, and applicable to sales occurring on or after said date): |
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| 67 | 85 | | |
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| 68 | 86 | | (NEW) (120) Sales of the following nonprescription drugs or medicines available for purchase for use in or on the body: Vitamin or mineral concentrates; dietary supplements; natural or herbal drugs or medicines; products intended to be taken for coughs, cold, asthma or allergies, or antihistamines; laxatives; antidiarrheal medicines; analgesics; antibiotic, antibacterial, antiviral and antifungal medicines; antiseptics; astringents; anesthetics; steroidal medicines; anthelmintics; emetics and antiemetics; antacids; and any medication prepared to be used in the eyes, ears or nose. Nonprescription drugs or medicines shall not include cosmetics, dentrifrices, mouthwash, shaving and hair care products, soaps and deodorants. |
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| 69 | 87 | | |
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| 70 | 88 | | Sec. 6. Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 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, 2014): |
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| 71 | 89 | | |
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| 72 | 90 | | (B) There shall be subtracted therefrom (i) to the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law, (ii) to the extent allowable under section 12-718, exempt dividends paid by a regulated investment company, (iii) the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia, to the extent properly includable in gross income for federal income tax purposes, (iv) to the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits, (v) to the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years, (vi) to the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, (vii) to the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized, (viii) any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual, (ix) ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual, (x) (I) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and (II) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code, (xi) to the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746, (xii) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiii) to the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiv) to the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim, (xv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder, (xvi) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive, (xvii) to the extent properly [included] includable in gross income for federal income tax purposes, fifty per cent of the income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code, (xviii) to the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(x) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year; [and] (xix) to the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made; and (xx) to the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2014, twenty-five per cent of the income received from the state teachers' retirement system, and for the taxable year commencing January 1, 2015, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system. |
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| 73 | 91 | | |
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| 74 | 92 | | Sec. 7. Section 12-704d 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, 2014): |
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| 75 | 93 | | |
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| 76 | 94 | | (a) As used in this section: |
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| 77 | 95 | | |
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| 78 | 96 | | (1) "Angel investor" means an accredited investor, as defined by the Securities and Exchange Commission, or network of accredited investors who review new or proposed businesses for potential investment who may seek active involvement, such as consulting and mentoring, in a Connecticut business, but "angel investor" does not include (A) a person controlling fifty per cent or more of the Connecticut business invested in by the angel investor, (B) a venture capital company, or (C) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business; |
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| 79 | 97 | | |
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| 80 | 98 | | (2) "Cash investment" means the contribution of cash, at a risk of loss, to a qualified Connecticut business in exchange for qualified securities; |
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| 81 | 99 | | |
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| 82 | 100 | | (3) "Connecticut business" means any business with its principal place of business in Connecticut that is engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner of Economic and Community Development; |
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| 83 | 101 | | |
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| 84 | 102 | | (4) "Bioscience" means manufacturing pharmaceuticals, medicines, medical equipment or medical devices and analytical laboratory instruments, operating medical or diagnostic testing laboratories, or conducting pure research and development in life sciences; |
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| 85 | 103 | | |
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| 86 | 104 | | (5) "Advanced materials" means developing, formulating or manufacturing advanced alloys, coatings, lubricants, refrigerants, surfactants, emulsifiers or substrates; |
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| 87 | 105 | | |
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| 88 | 106 | | (6) "Photonics" means generation, emission, transmission, modulation, signal processing, switching, amplification, detection and sensing of light from ultraviolet to infrared and the manufacture, research or development of opto-electronic devices, including, but not limited to, lasers, masers, fiber optic devices, quantum devices, holographic devices and related technologies; |
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| 89 | 107 | | |
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| 90 | 108 | | (7) "Information technology" means software publishing, motion picture and video production, teleproduction and postproduction services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services and computer training; |
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| 91 | 109 | | |
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| 92 | 110 | | (8) "Clean technology" means the production, manufacture, design, research or development of clean energy, green buildings, smart grid, high-efficiency transportation vehicles and alternative fuels, environmental products, environmental remediation and pollution prevention; and |
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| 93 | 111 | | |
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| 94 | 112 | | (9) "Qualified securities" means any form of equity, including a general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position that must be convertible into common stock. |
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| 95 | 113 | | |
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| 96 | 114 | | (b) There shall be allowed a credit against the tax imposed under this chapter, other than the liability imposed by section 12-707, for a cash investment of not less than twenty-five thousand dollars in the qualified securities of a Connecticut business by an angel investor. The credit shall be in an amount equal to twenty-five per cent of such investor's cash investment, provided the total tax credits allowed to any angel investor shall not exceed two hundred fifty thousand dollars. The credit shall be claimed in the taxable year in which such cash investment is made by the angel investor and shall not be transferable. |
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| 97 | 115 | | |
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| 98 | 116 | | (c) To qualify for a tax credit pursuant to this section, a cash investment shall be in a Connecticut business that (1) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section; (2) had annual gross revenues of less than one million dollars in the most recent income year of such business; (3) has fewer than twenty-five employees, not less than seventy-five per cent of whom reside in this state; (4) has been operating in this state for less than seven consecutive years; (5) is primarily owned by the management of the business and their families; and (6) received less than two million dollars in cash investments eligible for the tax credits provided by this section. |
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| 99 | 117 | | |
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| 100 | 118 | | (d) (1) A Connecticut business may apply to Connecticut Innovations, Incorporated, for approval as a Connecticut business qualified to receive cash investments eligible for a tax credit pursuant to this section. The application shall include (A) the name of the business and a copy of the organizational documents of such business, (B) a business plan, including a description of the business and the management, product, market and financial plan of the business, (C) a description of the business's innovative technology, product or service, (D) a statement of the potential economic impact of the business, including the number, location and types of jobs expected to be created, (E) a description of the qualified securities to be issued and the amount of cash investment sought by the qualified Connecticut business, (F) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities, and (G) such other information as the [executive director] chief executive officer of Connecticut Innovations, Incorporated, may require. |
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| 101 | 119 | | |
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| 102 | 120 | | (2) Said [executive director shall, on or before August 1, 2010, and monthly thereafter] chief executive officer shall, on a monthly basis, compile a list of approved applications, categorized by the cash investments being sought by the qualified Connecticut business and type of qualified securities offered. |
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| 103 | 121 | | |
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| 104 | 122 | | (e) (1) Any angel investor that intends to make a cash investment in a business on such list may apply to Connecticut Innovations, Incorporated, to reserve a tax credit in the amount indicated by such investor. The aggregate amount of all tax credits under this section that may be reserved by Connecticut Innovations, Incorporated, shall not exceed six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and shall not exceed three million dollars in each fiscal year thereafter. Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investment made on or after July 1, [2014] 2016. |
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| 105 | 123 | | |
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| 106 | 124 | | (2) The amount of the credit allowed to any investor pursuant to this section shall not exceed the amount of tax due from such investor under this chapter, other than section 12-707, with respect to such taxable year. Any tax credit that is claimed by the angel investor but not applied against the tax due under this chapter, other than the liability imposed under section 12-707, may be carried forward for the five immediately succeeding taxable years until the full credit has been applied. |
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| 107 | 125 | | |
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| 108 | 126 | | (f) If the angel investor is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the angel investor. If the angel investor is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by such limited liability company's owner, provided such owner is a person subject to the tax imposed under this chapter. |
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| 109 | 127 | | |
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