General Assembly Substitute Bill No. 369
February Session, 2014 *_____SB00369FIN___032514____*
General Assembly
Substitute Bill No. 369
February Session, 2014
*_____SB00369FIN___032514____*
AN ACT CONCERNING CHANGES TO DEPARTMENT OF REVENUE SERVICES STATUTES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 12-7a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2014):
(a) (1) The annual report prepared by the Commissioner of Revenue Services for submission to the Governor and publication as provided in section 4-60 shall not be required to include the name of any person liable for payment of any tax which is unpaid. The commissioner shall prepare and maintain a list related to each type of tax levied by the state, containing the name and address of any person or corporation liable for payment of any such tax and the amount thereof, including any applicable interest or penalties, which tax, as of the end of the fiscal year with respect to which such report is prepared, is unpaid and a period in excess of ninety days has elapsed following the date on which such tax was due, exclusive of any tax determined to be uncollectible in accordance with section 12-37, any tax on which an appeal is pending and any tax which has been abated by said commissioner as provided in section 12-39. Such lists shall be available to the public for inspection by any person.
(2) The commissioner shall, prior to eliminating any person or corporation from the list prepared and maintained as provided in subdivision (1) of this subsection, indicate on such list whether such person or corporation is being eliminated from such list due to (A) payment in full of the tax, including applicable interest or penalties, (B) a negotiated settlement of the amount of tax due, or (C) a determination by the commissioner that such tax is uncollectable.
(b) The commissioner shall annually prepare, from the list prepared pursuant to subsection (a) of this section, a list of taxpayers who are delinquent in the payment of the corporation business tax under chapter 208. The list shall be arranged in sequential order by the taxpayer identification number assigned by the commissioner and shall be provided to the Secretary of the Office of Policy and Management not later than July fifteenth annually, commencing July 15, 1998.
(c) The commissioner may make available for public inspection a list of those persons who have applied to the commissioner for a license, permit or certificate and whose application has been denied, and those persons who were issued a license, permit or certificate by the commissioner and whose license, permit or certificate has been revoked, suspended or not renewed by the commissioner. The list shall be arranged by tax type and may include the date on which an application was denied or the date on which the license, permit or certificate was revoked, suspended or not renewed, and may include the reason for each such action.
Sec. 2. Section 12-414 of the general statutes is repealed and the following is substituted thereof (Effective October 1, 2014):
[(1)] (a) The taxes imposed by this chapter are due and payable to the commissioner monthly on or before the [last] twentieth day of the month next succeeding each monthly period except that (1) every person whose total tax liability for the twelve-month period [ended] ending on the preceding June thirtieth was less than four thousand dollars shall [file returns] remit tax on a quarterly basis, and (2) every person described in subdivision (2) of subsection (e) of this section shall remit tax as prescribed by the commissioner under said subdivision (2). "Quarterly" means a period of three calendar months commencing on the first day of January, April, July or October of each year or, if any seller commences business on a date other than the first day of January, April, July or October, a period beginning on the date of commencement of business and ending on March thirty-first, June thirtieth, September thirtieth or December thirty-first, respectively.
[(2)] (b) On or before the [last] twentieth day of the month following each monthly or quarterly period, as the case may be, or on the date or dates prescribed by the commissioner under subsection (e) of this section, a return for the preceding period shall be filed with the commissioner in such form as the commissioner may prescribe. For purposes of the sales tax a return shall be filed by every seller. For purposes of the use tax a return shall be filed by every retailer engaged in business in the state and by every person purchasing services or tangible personal property, the storage, acceptance, consumption or other use of which is subject to the use tax, who has not paid the use tax due a retailer required to collect the tax, except that every person making such purchases for personal use or consumption in this state, and not for use or consumption in carrying on a trade, occupation, business or profession, need file only one use tax return covering purchases during a calendar year. Such return shall be filed and the tax due thereon paid on or before the fifteenth day of the fourth month succeeding the end of the calendar year for which such return is filed. Returns shall be signed by the person required to file the return or by his or her authorized agent but need not be verified by oath, provided a return required to be filed by a corporation shall be signed by an officer of such corporation.
[(3)] (c) For purposes of the sales tax, the return shall show the gross receipts of the seller during the preceding reporting period. For purposes of the use tax, in case of a return filed by a retailer, the return shall show the total sales price of the services or property sold by [him] the retailer, the storage, acceptance, consumption or other use of which became subject to the use tax during the preceding reporting period; in case of a return filed by a purchaser, the return shall show the total sales price of the service or property purchased by [him] the purchaser, the storage, acceptance, consumption or other use of which became subject to the use tax during the preceding reporting period. The return shall also show the amount of the taxes for the period covered by the return in such manner as the commissioner may require and such other information as the commissioner deems necessary for the proper administration of this chapter. The Commissioner of Revenue Services is authorized in his or her discretion, for purposes of expediency, to permit returns to be filed in an alternative form wherein the person filing the return may elect to report his or her gross receipts, including the tax reimbursement to be collected as provided for [herein] in this section, as a part of such gross receipts or to report his or her gross receipts exclusive of the tax collected in such cases where the gross receipts from sales have been segregated from tax collections. In the case of the former, the percentage of such tax-included gross receipts that may be considered to be the gross receipts from sales exclusive of the taxes collected thereon shall be computed by dividing the numeral one by the sum of the rate of tax provided in section 12-408, expressed as a decimal, and the numeral one.
[(4)] (d) Returns, together with the amount of the tax due thereon, shall be filed with the Commissioner of Revenue Services.
[(5)] (e) (1) The commissioner, if he or she deems it necessary in order to insure payment to or facilitate the collection by the state of the amount of taxes, may permit or require returns and payment of the amount of taxes for other than monthly or quarterly periods.
(2) (A) For purposes of this subdivision, "weekly period" means the seven-day period beginning on a Saturday and ending the following Friday. The commissioner may require any person who is delinquent, as described in section 12-7a, as amended by this act, to remit the tax collected during a weekly period on a weekly basis. Any person who is required to remit tax for a weekly period shall remit such tax to the commissioner on or before the Wednesday next succeeding the weekly period and shall do so in the manner and method prescribed by the commissioner. The requirement to remit tax on a weekly basis shall not alter a person's obligation to file monthly or quarterly returns, as the case may be, as provided in subsection (b) of this section. To the extent that the end of one month and the beginning of the following month may fall within the same weekly period, each person required by the commissioner to remit tax under this subparagraph shall report all of the tax collected and remitted during such weekly period, regardless of the month, along with the corresponding gross receipts, on the return covering the monthly period that ended during such weekly period.
(B) The commissioner shall send a written notice, in accordance with the provisions of section 12-2f, informing each person required to remit tax on a weekly basis pursuant to this subdivision of such requirement. Any person so required shall remit tax on a weekly basis for a period of one year commencing from the date set forth in such notice. Such notice shall also contain information regarding the manner and method of such remittal.
(C) Any person who fails to remit tax as provided in this subdivision shall be subject to all penalties imposed under this chapter, including revocation of such person's permit.
[(6) The] (f) Except for returns and payments required to be made under subdivision (2) of subsection (e) of this section, the commissioner for good cause may extend the time for making any return and paying any amount required to be paid under this chapter, if a written request therefor is filed with the commissioner together with a tentative return which must be accompanied by a payment of the tax, which shall be estimated in such tentative return, on or before the last day for filing the return. Any person to whom an extension is granted shall pay, in addition to the tax, interest at the rate of one per cent per month or fraction thereof from the date on which the tax would have been due without the extension until the date of payment.
Sec. 3. (NEW) (Effective from passage) (a) The Commissioner of Revenue Services shall enter into agreements with financial institutions, as defined in Section 469A(d)(1) of the Social Security Act, as amended from time to time, doing business in this state, to develop and operate a data match system using automated data exchanges to the maximum extent feasible. Notwithstanding the provisions of section 12-15 of the general statutes, the commissioner shall provide to each financial institution a list of taxpayers who owe taxes to the state, which taxes are finally due and payable and with respect to which every administrative or judicial remedy, or both, has been exhausted or has lapsed. Such list shall include each taxpayer's address, Social Security number or other taxpayer identification number. Not later than ninety days after receipt of such list from the commissioner, each financial institution shall provide the commissioner with the names of those taxpayers who appear on the commissioner's list who maintain an account with such financial institution, the address and Social Security number or other taxpayer identification number associated with each such account and a statement as to whether the balance of each such account exceeds one thousand dollars. For the purposes of this section, "account" means a demand deposit account, checking or negotiable withdrawal order account, savings account, time deposit account or money market mutual fund account.
(b) A financial institution shall not be liable to any person for (1) disclosing information to the Commissioner of Revenue Services pursuant to this section, or (2) any other action taken in good faith to comply with the requirements of subsection (a) of this section.
Sec. 4. Subdivision (10) 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):
(10) "Connecticut fiduciary adjustment" means the net positive or negative total of the following items relating to income, gain, loss or deduction of a trust or estate: (A) There shall be added together (i) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity, exclusive of such 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 and exclusive of any such income with respect to which taxation by any state is prohibited by federal law, (ii) any exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, exclusive of such exempt-interest dividends derived 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 and exclusive of such exempt-interest dividends derived from obligations, the income with respect to which taxation by any state is prohibited by federal law, (iii) any interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States which federal law exempts from federal income tax but does not exempt from state income taxes, (iv) 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 loss 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 loss was recognized, (v) to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, any income taxes imposed by this state, (vi) to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is exempt from tax under this chapter, (vii) expenses paid or incurred during the taxable year for the production or collection of income which is exempt from tax under this chapter, 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 exempt from taxation under this chapter, to the extent that such expenses and premiums are deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, [and] (viii) to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, the deduction allowable as qualified domestic production activities income, pursuant to Section 199 of the Internal Revenue Code, and (ix) to the extent not includable in federal taxable income prior to deductions relating to distributions to beneficiaries, the total amount of a lump sum distribution for the taxable year. (B) There shall be subtracted from the sum of such items (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) with respect to any trust or estate which is a shareholder of an S corporation which is carrying on, or which has the right to carry on, business in this state, as said term is used in section 12-214, the amount of such shareholder's pro rata share of such corporation's nonseparately computed items, as defined in Section 1366 of the Internal Revenue Code, that is subject to tax under chapter 208, in accordance with subsection (c) of section 12-217 multiplied by such corporation's apportionment fraction, if any, as determined in accordance with section 12-218, (iv) 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, (v) 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, (vi) 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 taxable income prior to deductions relating to distributions to beneficiaries, (vii) 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 taxable income prior to deductions relating to distributions to beneficiaries, and (viii) the amount of any refund or credit for overpayment of income taxes imposed by this state, to the extent properly includable in gross income for federal income tax purposes for the taxable year and to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries for the preceding taxable year.
Sec. 5. Subsection (a) of section 12-711 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) The income of a nonresident natural person derived from or connected with sources within this state shall be the sum of the net amount of items of income, gain, loss and deduction entering into his or her Connecticut adjusted gross income for the taxable year, derived from or connected with sources within this state, including: (1) His or her distributive share of partnership income, gain, loss and deduction, determined under section 12-712; [, and] (2) his or her pro rata share of S corporation income, gain, loss and deduction, determined under section 12-712; [, and] (3) his or her share of estate or trust income, gain, loss and deduction, determined under section 12-714; and (4) his or her compensation from nonqualified deferred compensation plans attributable to services performed within the state, including, but not limited to, compensation required to be included in federal gross income under Section 457A of the Internal Revenue Code.
Sec. 6. Subsections (b) and (c) of section 12-711 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years commencing on or after January 1, 2014):
(b) (1) Items of income, gain, loss and deduction derived from or connected with sources within this state shall be those items attributable to: (A) The ownership or disposition of any interest in real property in this state or tangible personal property in this state, as determined pursuant to subdivision (5) of this subsection; (B) a business, trade, profession or occupation carried on in this state; (C) in the case of a shareholder of an S corporation, the ownership of shares issued by such corporation, to the extent determined under section 12-712; or (D) winnings from a wager placed in a lottery conducted by the Connecticut Lottery Corporation, if the proceeds from such wager are required, under the Internal Revenue Code or regulations adopted thereunder, to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service.
(2) Income from intangible personal property, including annuities, dividends, interest and gains from the disposition of intangible personal property, shall constitute income derived from sources within this state only to the extent that such income is from (A) property employed in a business, trade, profession or occupation carried on in this state, or (B) winnings from a wager placed in a lottery conducted by the Connecticut Lottery Corporation, if the proceeds from such wager are required, under the Internal Revenue Code or regulations adopted thereunder, to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service.
(3) Deductions with respect to capital losses and net operating losses shall be based solely on income, gain, loss and deduction derived from or connected with sources within this state, under regulations adopted by the commissioner, but otherwise shall be determined in the same manner as the corresponding federal deductions.
(4) Income directly or indirectly derived by an athlete, entertainer or performing artist from closed-circuit and cable television transmissions of an event, other than events occurring on a regularly scheduled basis, taking place within this state as a result of the rendition of services by such athlete, entertainer or performing artist shall constitute income derived from or connected with sources within this state only to the extent that such transmissions were received or exhibited within this state.
(5) For purposes of subparagraph (A) of subdivision (1) of this subsection, "interest in real property in this state" includes an interest in an entity, and "entity" means a partnership, limited liability company or S corporation that owns real property that is located within this state and has a fair market value that equals or exceeds fifty per cent of all the assets of the entity on the date of sale or disposition by a nonresident natural person of such person's interest in the entity. Only those assets that the entity owned for at least two years prior to the date of the sale or disposition of the person's interest in the entity shall be used in determining the fair market value of all the assets of the entity on the date of such sale or disposition. The gain or loss derived from Connecticut sources from such person's sale or disposition of an interest in such entity is the total gain or loss for federal income tax purposes from such sale or disposition multiplied by a fraction, the numerator of which is the fair market value of all real property located in this state owned by the entity on the date of such sale or disposition, and the denominator of which is the fair market value of all the assets of the entity on the date of such sale or disposition.
(c) (1) If a business, trade, profession or occupation is carried on partly within and partly without this state, as determined under rules or regulations of the commissioner, the items of income, gain, loss and deduction derived from or connected with sources within this state shall be determined by apportionment under such rules or regulations and the provisions of this subsection.
(2) The proportion of the net amount of the items of income, gain, loss and deduction attributable to the activities of the business, trade, profession or occupation carried on in this state shall be determined by multiplying the net amount of the items of income, gain, loss and deduction of the business, trade, profession or occupation by the average of the percentages of property, payroll and gross income in this state. The gross income percentage shall be computed by dividing the gross receipts from sales of property or services earned within this state by the total gross receipts from sales of property or services, whether earned within or without this state. Gross receipts from sales of property are considered to be earned within this state when the property is delivered or shipped to a purchaser within this state, regardless of the F.O.B. point or other conditions of the sale. Gross receipts from sales of services are considered to be earned within the state when the services are performed by an employee, agent, agency or independent contractor chiefly situated at, connected by contract or otherwise, with or sent out from, offices or branches of the business, trade, profession or occupation or other agencies or locations situated within this state.
Sec. 7. Section 12-432c of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2014):
(a) If any cumulative monthly financial statement issued by the Comptroller pursuant to section 3-115 after September 9, 2009, and before January 1, 2010, indicates that the estimated gross tax revenue to the General Fund, to the end of the fiscal year ending June 30, 2010, is at least one per cent less than the estimated gross tax revenue to the General Fund for said fiscal year, included in public act 09-3 of the June special session pursuant to section 2-35, the amendments made to the provisions of subdivisions (1) and (3) of section 12-408, subdivision (1) of section 12-411, subsection (c) of section 12-411b and [subdivision (3)] subsection (c) of section 12-414, as amended by this act, pursuant to sections 108 to 112, inclusive, of public act 09-3 of the June special session, shall not take effect.
(b) If any cumulative monthly financial statement issued by the Comptroller pursuant to section 3-115 after January 1, 2010, and on or before June 30, 2010, indicates that the estimated gross tax revenue to the General Fund, to the end of the fiscal year ending June 30, 2010, is at least one per cent less than the estimated gross tax revenue to the General Fund for said fiscal year, included in public act 09-3 of the June special session pursuant to section 2-35, (1) the amendments made to the provisions of subdivisions (1) and (3) of section 12-408, subdivision (1) of section 12-411, subsection (c) of section 12-411b and [subdivision (3)] subsection (c) of section 12-414, as amended by this act, pursuant to sections 108 to 112, inclusive, of public act 09-3 of the June special session, shall, on and after July 1, 2010, be inoperative and have no effect, and (2) the provisions of said subdivisions and subsection of said sections of the general statutes, revision of 1958, revised to December 31, 2009, shall be effective on and after July 1, 2010.
This act shall take effect as follows and shall amend the following sections:
Section 1 July 1, 2014 12-7a
Sec. 2 October 1, 2014 12-414
Sec. 3 from passage New section
Sec. 4 from passage and applicable to taxable years commencing on or after January 1, 2014 12-701(a)(10)
Sec. 5 from passage 12-711(a)
Sec. 6 from passage and applicable to taxable years commencing on or after January 1, 2014 12-711(b) and (c)
Sec. 7 October 1, 2014 12-432c
This act shall take effect as follows and shall amend the following sections:
Section 1
July 1, 2014
12-7a
Sec. 2
October 1, 2014
12-414
Sec. 3
from passage
New section
Sec. 4
from passage and applicable to taxable years commencing on or after January 1, 2014
12-701(a)(10)
Sec. 5
from passage
12-711(a)
Sec. 6
from passage and applicable to taxable years commencing on or after January 1, 2014
12-711(b) and (c)
Sec. 7
October 1, 2014
12-432c
FIN Joint Favorable Subst.
FIN
Joint Favorable Subst.