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General Assembly Substitute Bill No. 877
January Session, 2019
AN ACT CONCERNING RE VENUE ITEMS TO IMPLEMENT THE
BIENNIAL BUDGET.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (Effective from passage) (a) The Department of Revenue 1
Services shall analyze the impact on taxpayers of implementing a 2
payroll tax of five per cent on wages and reducing the personal income 3
tax rates under section 12-700 of the general statutes on wage income 4
by four percentage points for individuals in the top three income tax 5
brackets and five percentage points for individuals in all other income 6
tax brackets. Such analysis shall determine (1) the net federal and state 7
income tax liability for wage income for each income tax bracket for all 8
taxpayers, and (2) the refundable income tax credits that would be 9
necessary for taxpayers in certain income tax brackets to ensure that no 10
income tax bracket realizes an overall increase in income tax liability. 11
Such analysis shall include tables showing the adjusted net federal and 12
state income tax liability for each tax bracket for all taxpayers and 13
information about the rates, bases and credits required to implement 14
such reduction. 15
(b) Not later than January 1, 2020, the Commissioner of Revenue 16
Services shall submit such analysis, in accordance with the provisions 17
of section 11-4a of the general statutes, to the joint standing committee 18
of the General Assembly having cognizance of matters relating to 19 Substitute Bill No. 877
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finance, revenue and bonding. 20
Sec. 2. Subparagraph (B) of subdivision (20) of subsection (a) of 21
section 12-701 of the general statutes is repealed and the following is 22
substituted in lieu thereof (Effective from passage and applicable to taxable 23
years commencing on or after January 1, 2019): 24
(B) There shall be subtracted therefrom: 25
(i) To the extent properly includable in gross income for federal 26
income tax purposes, any income with respect to which taxation by 27
any state is prohibited by federal law; 28
(ii) To the extent allowable under section 12-718, exempt dividends 29
paid by a regulated investment company; 30
(iii) To the extent properly includable in gross income for federal 31
income tax purposes, the amount of any refund or credit for 32
overpayment of income taxes imposed by this state, or any other state 33
of the United States or a political subdivision thereof, or the District of 34
Columbia; 35
(iv) To the extent properly includable in gross income for federal 36
income tax purposes and not otherwise subtracted from federal 37
adjusted gross income pursuant to clause (x) of this subparagraph in 38
computing Connecticut adjusted gross income, any tier 1 railroad 39
retirement benefits; 40
(v) To the extent any additional allowance for depreciation under 41
Section 168(k) of the Internal Revenue Code for property placed in 42
service after September 27, 2017, was added to federal adjusted gross 43
income pursuant to subparagraph (A)(ix) of this subdivision in 44
computing Connecticut adjusted gross income, twenty-five per cent of 45
such additional allowance for depreciation in each of the four 46
succeeding taxable years; 47
(vi) To the extent properly includable in gross income for federal 48 Substitute Bill No. 877
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income tax purposes, any interest income from obligations issued by or 49
on behalf of the state of Connecticut, any political subdivision thereof, 50
or public instrumentality, state or local authority, district or similar 51
public entity created under the laws of the state of Connecticut; 52
(vii) To the extent properly includable in determining the net gain 53
or loss from the sale or other disposition of capital assets for federal 54
income tax purposes, any gain from the sale or exchange of obligations 55
issued by or on behalf of the state of Connecticut, any political 56
subdivision thereof, or public instrumentality, state or local authority, 57
district or similar public entity created under the laws of the state of 58
Connecticut, in the income year such gain was recognized; 59
(viii) Any interest on indebtedness incurred or continued to 60
purchase or carry obligations or securities the interest on which is 61
subject to tax under this chapter but exempt from federal income tax, 62
to the extent that such interest on indebtedness is not deductible in 63
determining federal adjusted gross income and is attributable to a 64
trade or business carried on by such individual; 65
(ix) Ordinary and necessary expenses paid or incurred during the 66
taxable year for the production or collection of income which is subject 67
to taxation under this chapter but exempt from federal income tax, or 68
the management, conservation or maintenance of property held for the 69
production of such income, and the amortizable bond premium for the 70
taxable year on any bond the interest on which is subject to tax under 71
this chapter but exempt from federal income tax, to the extent that 72
such expenses and premiums are not deductible in determining federal 73
adjusted gross income and are attributable to a trade or business 74
carried on by such individual; 75
(x) (I) For taxable years commencing prior to January 1, 2019, for a 76
person who files a return under the federal income tax as an 77
unmarried individual whose federal adjusted gross income for such 78
taxable year is less than fifty thousand dollars, or as a married 79
individual filing separately whose federal adjusted gross income for 80 Substitute Bill No. 877
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such taxable year is less than fifty thousand dollars, or for a husband 81
and wife who file a return under the federal income tax as married 82
individuals filing jointly whose federal adjusted gross income for such 83
taxable year is less than sixty thousand dollars or a person who files a 84
return under the federal income tax as a head of household whose 85
federal adjusted gross income for such taxable year is less than sixty 86
thousand dollars, an amount equal to the Social Security benefits 87
includable for federal income tax purposes; 88
(II) For taxable years commencing prior to January 1, 2019, for a 89
person who files a return under the federal income tax as an 90
unmarried individual whose federal adjusted gross income for such 91
taxable year is fifty thousand dollars or more, or as a married 92
individual filing separately whose federal adjusted gross income for 93
such taxable year is fifty thousand dollars or more, or for a husband 94
and wife who file a return under the federal income tax as married 95
individuals filing jointly whose federal adjusted gross income from 96
such taxable year is sixty thousand dollars or more or for a person who 97
files a return under the federal income tax as a head of household 98
whose federal adjusted gross income for such taxable year is sixty 99
thousand dollars or more, an amount equal to the difference between 100
the amount of Social Security benefits includable for federal income tax 101
purposes and the lesser of twenty-five per cent of the Social Security 102
benefits received during the taxable year, or twenty-five per cent of the 103
excess described in Section 86(b)(1) of the Internal Revenue Code; 104
(III) For the taxable year commencing January 1, 2019, and each 105
taxable year thereafter, for a person who files a return under the 106
federal income tax as an unmarried individual whose federal adjusted 107
gross income for such taxable year is less than seventy-five thousand 108
dollars, or as a married individual filing separately whose federal 109
adjusted gross income for such taxable year is less than seventy-five 110
thousand dollars, or for a husband and wife who file a return under 111
the federal income tax as married individuals filing jointly whose 112
federal adjusted gross income for such taxable year is less than one 113 Substitute Bill No. 877
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hundred thousand dollars or a person who files a return under the 114
federal income tax as a head of household whose federal adjusted 115
gross income for such taxable year is less than one hundred thousand 116
dollars, an amount equal to the Social Security benefits includable for 117
federal income tax purposes; and 118
(IV) For the taxable year commencing January 1, 2019, and each 119
taxable year thereafter, for a person who files a return under the 120
federal income tax as an unmarried individual whose federal adjusted 121
gross income for such taxable year is seventy-five thousand dollars or 122
more, or as a married individual filing separately whose federal 123
adjusted gross income for such taxable year is seventy-five thousand 124
dollars or more, or for a husband and wife who file a return under the 125
federal income tax as married individuals filing jointly whose federal 126
adjusted gross income from such taxable year is one hundred 127
thousand dollars or more or for a person who files a return under the 128
federal income tax as a head of household whose federal adjusted 129
gross income for such taxable year is one hundred thousand dollars or 130
more, an amount equal to the difference between the amount of Social 131
Security benefits includable for federal income tax purposes and the 132
lesser of twenty-five per cent of the Social Security benefits received 133
during the taxable year, or twenty-five per cent of the excess described 134
in Section 86(b)(1) of the Internal Revenue Code; 135
(xi) To the extent properly includable in gross income for federal 136
income tax purposes, any amount rebated to a taxpayer pursuant to 137
section 12-746; 138
(xii) To the extent properly includable in the gross income for 139
federal income tax purposes of a designated beneficiary, any 140
distribution to such beneficiary from any qualified state tuition 141
program, as defined in Section 529(b) of the Internal Revenue Code, 142
established and maintained by this state or any official, agency or 143
instrumentality of the state; 144
(xiii) To the extent allowable under section 12-701a, contributions to 145 Substitute Bill No. 877
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accounts established pursuant to any qualified state tuition program, 146
as defined in Section 529(b) of the Internal Revenue Code, established 147
and maintained by this state or any official, agency or instrumentality 148
of the state; 149
(xiv) To the extent properly includable in gross income for federal 150
income tax purposes, the amount of any Holocaust victims' settlement 151
payment received in the taxable year by a Holocaust victim; 152
(xv) To the extent properly includable in gross income for federal 153
income tax purposes of an account holder, as defined in section 31-154
51ww, interest earned on funds deposited in the individual 155
development account, as defined in section 31-51ww, of such account 156
holder; 157
(xvi) To the extent properly includable in the gross income for 158
federal income tax purposes of a designated beneficiary, as defined in 159
section 3-123aa, interest, dividends or capital gains earned on 160
contributions to accounts established for the designated beneficiary 161
pursuant to the Connecticut Homecare Option Program for the Elderly 162
established by sections 3-123aa to 3-123ff, inclusive; 163
(xvii) To the extent properly includable in gross income for federal 164
income tax purposes, any income received from the United States 165
government as retirement pay for a retired member of (I) the Armed 166
Forces of the United States, as defined in Section 101 of Title 10 of the 167
United States Code, or (II) the National Guard, as defined in Section 168
101 of Title 10 of the United States Code; 169
(xviii) To the extent properly includable in gross income for federal 170
income tax purposes for the taxable year, any income from the 171
discharge of indebtedness in connection with any reacquisition, after 172
December 31, 2008, and before January 1, 2011, of an applicable debt 173
instrument or instruments, as those terms are defined in Section 108 of 174
the Internal Revenue Code, as amended by Section 1231 of the 175
American Recovery and Reinvestment Act of 2009, to the extent any 176 Substitute Bill No. 877
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such income was added to federal adjusted gross income pursuant to 177
subparagraph (A)(xi) of this subdivision in computing Connecticut 178
adjusted gross income for a preceding taxable year; 179
(xix) To the extent not deductible in determining federal adjusted 180
gross income, the amount of any contribution to a manufacturing 181
reinvestment account established pursuant to section 32-9zz in the 182
taxable year that such contribution is made; 183
(xx) To the extent properly includable in gross income for federal 184
income tax purposes, (I) for the taxable year commencing January 1, 185
2015, ten per cent of the income received from the state teachers' 186
retirement system, (II) for the taxable years commencing January 1, 187
2016, [January 1, 2017, and January 1, 2018] to January 1, 2020, 188
inclusive, twenty-five per cent of the income received from the state 189
teachers' retirement system, and (III) for the taxable year commencing 190
January 1, [2019] 2021, and each taxable year thereafter, fifty per cent of 191
the income received from the state teachers' retirement system or the 192
percentage, if applicable, pursuant to clause (xxi) of this subparagraph; 193
(xxi) To the extent properly includable in gross income for federal 194
income tax purposes, except for retirement benefits under clause (iv) of 195
this subparagraph and retirement pay under clause (xvii) of this 196
subparagraph, for a person who files a return under the federal income 197
tax as an unmarried individual whose federal adjusted gross income 198
for such taxable year is less than seventy-five thousand dollars, or as a 199
married individual filing separately whose federal adjusted gross 200
income for such taxable year is less than seventy-five thousand dollars, 201
or as a head of household whose federal adjusted gross income for 202
such taxable year is less than seventy-five thousand dollars, or for a 203
husband and wife who file a return under the federal income tax as 204
married individuals filing jointly whose federal adjusted gross income 205
for such taxable year is less than one hundred thousand dollars, (I) for 206
the taxable year commencing January 1, 2019, fourteen per cent of any 207
pension or annuity income, (II) for the taxable year commencing 208
January 1, 2020, twenty-eight per cent of any pension or annuity 209 Substitute Bill No. 877
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income, (III) for the taxable year commencing January 1, 2021, forty-210
two per cent of any pension or annuity income, (IV) for the taxable 211
year commencing January 1, 2022, fifty-six per cent of any pension or 212
annuity income, (V) for the taxable year commencing January 1, 2023, 213
seventy per cent of any pension or annuity income, (VI) for the taxable 214
year commencing January 1, 2024, eighty-four per cent of any pension 215
or annuity income, and (VII) for the taxable year commencing January 216
1, 2025, and each taxable year thereafter, any pension or annuity 217
income; 218
(xxii) The amount of lost wages and medical, travel and housing 219
expenses, not to exceed ten thousand dollars in the aggregate, incurred 220
by a taxpayer during the taxable year in connection with the donation 221
to another person of an organ for organ transplantation occurring on 222
or after January 1, 2017; 223
(xxiii) To the extent properly includable in gross income for federal 224
income tax purposes, the amount of any financial assistance received 225
from the Crumbling Foundations Assistance Fund or paid to or on 226
behalf of the owner of a residential building pursuant to sections 8-442 227
and 8-443; [, and] 228
(xxiv) To the extent properly includable in gross income for federal 229
income tax purposes, the amount calculated pursuant to subsection (b) 230
of section 12-704g for income received by a general partner of a 231
venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended 232
from time to time; and 233
(xxv) To the extent any portion of a deduction under Section 179 of 234
the Internal Revenue Code was added to federal adjusted gross income 235
pursuant to subparagraph (A)(xiv) of this subdivision in computing 236
Connecticut adjusted gross income, twenty-five per cent of such 237
disallowed portion of the deduction in each of the four succeeding 238
taxable years. 239
Sec. 3. (NEW) (Effective January 1, 2020) (a) For taxable years 240 Substitute Bill No. 877
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commencing on or after January 1, 2020, there is imposed a surcharge 241
on a taxpayer, excluding a trust or an estate, whose Connecticut 242
adjusted gross income is equal to or greater than the threshold amount 243
specified in section 12-700 of the general statutes for imposition of the 244
highest marginal rate on such taxpayer. Such surcharge shall be at the 245
rate of two per cent of the net gain from the sale or exchange of capital 246
assets, as determined for federal income tax purposes, that are 247
includable in such taxpayer's Connecticut adjusted gross income and 248
are derived from or connected with sources within this state. The 249
surcharge shall be in addition to any other tax, fee or surcharge for 250
which the taxpayer is liable. 251
(b) Each taxpayer subject to the surcharge shall file a return, in 252
accordance with the provisions of subsection (a) of section 12-719 of 253
the general statutes, with the Commissioner of Revenue Services in 254
such form and containing such information as the commissioner may 255
prescribe. Such return shall accurately set forth the amount of the net 256
gain calculated pursuant to subsection (a) of this section for the taxable 257
year and the amount of the taxpayer's surcharge liability for such year. 258
A person required to file a return under this section shall, without 259
assessment, notice or demand, pay any surcharge due thereon to the 260
commissioner on or before the date specified in subsection (a) of 261
section 12-719 of the general statutes, determined without regard to 262
any extension of time for filing the return. 263
(c) If any person fails to pay the amount of the surcharge reported 264
due on a return under this section within the time specified, there shall 265
be imposed a penalty equal to ten per cent of such amount due and 266
unpaid, or fifty dollars, whichever is greater. Such amount shall bear 267
interest at the rate of one per cent per month or fraction thereof, from 268
the due date of such surcharge until the date of payment. Subject to the 269
provisions of section 12-3a of the general statutes, the commissioner 270
may waive all or part of the penalties provided under this section 271
when it is proven to the commissioner's satisfaction that the failure to 272
pay any surcharge was due to reasonable cause and was not 273 Substitute Bill No. 877
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intentional or due to neglect. 274
(d) The provisions of sections 12-550 to 12-554, inclusive, and 275
sections 12-555a, 12-723, 12-728, 12-729 and 12-733 of the general 276
statutes shall apply to the provisions of this section in the same 277
manner and with the same force and effect as if the language of said 278
sections had been incorporated in full into this section and had 279
expressly referred to the surcharge under this section, except to the 280
extent that any provision is inconsistent with a provision in this 281
section. 282
(e) The commissioner may adopt regulations, in accordance with the 283
provisions of chapter 54 of the general statutes, to implement the 284
provisions of this section. 285
(f) At the close of each fiscal year commencing with the fiscal year 286
ending June 30, 2020, the Comptroller is authorized to record as 287
revenue for such fiscal year the amount of the surcharge imposed 288
under this section that is received by the commissioner not later than 289
five business days from the last day of July immediately following the 290
end of such fiscal year. 291
Sec. 4. Section 12-640 of the general statutes is repealed and the 292
following is substituted in lieu thereof (Effective from passage and 293
applicable to gifts made on or after January 1, 2019): 294
For [the calendar year 1991 and each year thereafter] calendar years 295
commencing January 1, 1991, but prior to January 1, 2019, a tax 296
computed as provided in section 12-642, as amended by this act, is 297
hereby imposed on the transfer of property by gift during such taxable 298
year by any individual resident or nonresident provided, for the 299
calendar year commencing January 1, 1991, such tax shall be imposed 300
only on those gifts [which are] that were transferred on or after 301
September 1, 1991. 302
Sec. 5. Section 12-642 of the general statutes is repealed and the 303
following is substituted in lieu thereof (Effective from passage): 304 Substitute Bill No. 877
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(a) (1) With respect to calendar years commencing prior to January 305
1, 2001, the tax imposed by section 12-640, as amended by this act, for 306
the calendar year shall be at a rate of the taxable gifts made by the 307
donor during the calendar year set forth in the following schedule: 308
T1 Amount of Taxable Gifts Rate of Tax
T2 Not over $25,000 1%
T3 Over $25,000 $250, plus 2% of the excess
T4 but not over $50,000 over $25,000
T5 Over $50,000 $750, plus 3% of the excess
T6 but not over $75,000 over $50,000
T7 Over $75,000 $1,500, plus 4% of the excess
T8 but not over $100,000 over $75,000
T9 Over $100,000 $2,500, plus 5% of the excess
T10 but not over $200,000 over $100,000
T11 Over $200,000 $7,500, plus 6% of the excess
T12 over $200,000
(2) With respect to the calendar years commencing January 1, 2001, 309
January 1, 2002, January 1, 2003, and January 1, 2004, the tax imposed 310
by section 12-640, as amended by this act, for each such calendar year 311
shall be at a rate of the taxable gifts made by the donor during the 312
calendar year set forth in the following schedule: 313
T13 Amount of Taxable Gifts Rate of Tax
T14 Over $25,000 $250, plus 2% of the excess
T15 but not over $50,000 over $25,000
T16 Over $50,000 $750, plus 3% of the excess
T17 but not over $75,000 over $50,000
T18 Over $75,000 $1,500, plus 4% of the excess
T19 but not over $100,000 over $75,000
T20 Over $100,000 $2,500, plus 5% of the excess
T21 but not over $675,000 over $100,000
T22 Over $675,000 $31,250, plus 6% of the excess Substitute Bill No. 877
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T23 over $675,000
(3) With respect to Connecticut taxable gifts, as defined in section 314
12-643, as amended by this act, made by a donor during a calendar 315
year commencing on or after January 1, 2005, but prior to January 1, 316
2010, including the aggregate amount of all Connecticut taxable gifts 317
made by the donor during all calendar years commencing on or after 318
January 1, 2005, but prior to January 1, 2010, the tax imposed by 319
section 12-640, as amended by this act, for the calendar year shall be at 320
the rate set forth in the following schedule, with a credit allowed 321
against such tax for any tax previously paid to this state pursuant to 322
this subdivision: 323
T24 Amount of Taxable Gifts Rate of Tax
T25 Not over $2,000,000 None
T26 Over $2,000,000
T27 but not over $2,100,000 5.085% of the excess over $0
T28 Over $2,100,000 $106,800 plus 8% of the excess
T29 but not over $2,600,000 over $2,100,000
T30 Over $2,600,000 $146,800 plus 8.8% of the excess
T31 but not over $3,100,000 over $2,600,000
T32 Over $3,100,000 $190,800 plus 9.6% of the excess
T33 but not over $3,600,000 over $3,100,000
T34 Over $3,600,000 $238,800 plus 10.4% of the excess
T35 but not over $4,100,000 over $3,600,000
T36 Over $4,100,000 $290,800 plus 11.2% of the excess
T37 but not over $5,100,000 over $4,100,000
T38 Over $5,100,000 $402,800 plus 12% of the excess
T39 but not over $6,100,000 over $5,100,000
T40 Over $6,100,000 $522,800 plus 12.8% of the excess
T41 but not over $7,100,000 over $6,100,000
T42 Over $7,100,000 $650,800 plus 13.6% of the excess
T43 but not over $8,100,000 over $7,100,000
T44 Over $8,100,000 $786,800 plus 14.4% of the excess Substitute Bill No. 877
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T45 but not over $9,100,000 over $8,100,000
T46 Over $9,100,000 $930,800 plus 15.2% of the excess
T47 but not over $10,100,000 over $9,100,000
T48 Over $10,100,000 $1,082,800 plus 16% of the excess
T49 over $10,100,000
(4) With respect to Connecticut taxable gifts, as defined in section 324
12-643, as amended by this act, made by a donor during a calendar 325
year commencing on or after January 1, 2010, but prior to January 1, 326
2011, including the aggregate amount of all Connecticut taxable gifts 327
made by the donor during all calendar years commencing on or after 328
January 1, 2005, the tax imposed by section 12-640, as amended by this 329
act, for the calendar year shall be at the rate set forth in the following 330
schedule, with a credit allowed against such tax for any tax previously 331
paid to this state pursuant to this subdivision or pursuant to 332
subdivision (3) of this subsection, provided such credit shall not 333
exceed the amount of tax imposed by this section: 334
T50 Amount of Taxable Gifts Rate of Tax
T51 Not over $3,500,000 None
T52 Over $3,500,000 7.2% of the excess
T53 but not over $3,600,000 over $3,500,000
T54 Over $3,600,000 $7,200 plus 7.8% of the excess
T55 but not over $4,100,000 over $3,600,000
T56 Over $4,100,000 $46,200 plus 8.4% of the excess
T57 but not over $5,100,000 over $4,100,000
T58 Over $5,100,000 $130,200 plus 9.0% of the excess
T59 but not over $6,100,000 over $5,100,000
T60 Over $6,100,000 $220,200 plus 9.6% of the excess
T61 but not over $7,100,000 over $6,100,000
T62 Over $7,100,000 $316,200 plus 10.2% of the excess
T63 but not over $8,100,000 over $7,100,000
T64 Over $8,100,000 $418,200 plus 10.8% of the excess
T65 but not over $9,100,000 over $8,100,000 Substitute Bill No. 877
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T66 Over $9,100,000 $526,200 plus 11.4% of the excess
T67 but not over $10,100,000 over $9,100,000
T68 Over $10,100,000 $640,200 plus 12% of the excess
T69 over $10,100,000
(5) With respect to Connecticut taxable gifts, as defined in section 335
12-643, as amended by this act, made by a donor during a calendar 336
year commencing on or after January 1, 2011, but prior to January 1, 337
2018, including the aggregate amount of all Connecticut taxable gifts 338
made by the donor during all calendar years commencing on or after 339
January 1, 2005, the tax imposed by section 12-640, as amended by this 340
act, for the calendar year shall be at the rate set forth in the following 341
schedule, with a credit allowed against such tax for any tax previously 342
paid to this state pursuant to this subdivision or pursuant to 343
subdivision (3) or (4) of this subsection, provided such credit shall not 344
exceed the amount of tax imposed by this section: 345
T70
Amount of Taxable Gifts Rate of Tax
T71 Not over $2,000,000 None
T72 Over $2,000,000 7.2% of the excess
T73 but not over $3,600,000 over $2,000,000
T74 Over $3,600,000 $115,200 plus 7.8% of the excess
T75 but not over $4,100,000 over $3,600,000
T76 Over $4,100,000 $154,200 plus 8.4% of the excess
T77 but not over $5,100,000 over $4,100,000
T78 Over $5,100,000 $238,200 plus 9.0% of the excess
T79 but not over $6,100,000 over $5,100,000
T80 Over $6,100,000 $328,200 plus 9.6% of the excess
T81 but not over $7,100,000 over $6,100,000
T82 Over $7,100,000 $424,200 plus 10.2% of the excess
T83 but not over $8,100,000 over $7,100,000
T84 Over $8,100,000 $526,200 plus 10.8% of the excess
T85 but not over $9,100,000 over $8,100,000
T86 Over $9,100,000 $634,200 plus 11.4% of the excess Substitute Bill No. 877
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T87 but not over $10,100,000 over $9,100,000
T88 Over $10,100,000 $748,200 plus 12% of the excess
T89 over $10,100,000
(6) With respect to Connecticut taxable gifts, as defined in section 346
12-643, as amended by this act, made by a donor during a calendar 347
year commencing on or after January 1, 2018, but prior to January 1, 348
2019, including the aggregate amount of all Connecticut taxable gifts 349
made by the donor during all calendar years commencing on or after 350
January 1, 2005, the tax imposed by section 12-640, as amended by this 351
act, for the calendar year shall be at the rate set forth in the following 352
schedule, with a credit allowed against such tax for any tax previously 353
paid to this state pursuant to this subdivision or pursuant to 354
subdivision (3), (4) or (5) of this subsection, provided such credit shall 355
not exceed the amount of tax imposed by this section: 356
T90
Amount of Taxable Gifts Rate of Tax
T91 Not over $2,600,000 None
T92 Over $2,600,000 7.2% of the excess
T93 but not over $3,600,000 over $2,600,000
T94 Over $3,600,000 $72,000 plus 7.8% of the excess
T95 but not over $4,100,000 over $3,600,000
T96 Over $4,100,000 $111,000 plus 8.4% of the excess
T97 but not over $5,100,000 over $4,100,000
T98 Over $5,100,000 $195,000 plus 10% of the excess
T99 but not over $6,100,000 over $5,100,000
T100 Over $6,100,000 $295,000 plus 10.4% of the excess
T101 but not over $7,100,000 over $6,100,000
T102 Over $7,100,000 $399,000 plus 10.8% of the excess
T103 but not over $8,100,000 over $7,100,000
T104 Over $8,100,000 $507,000 plus 11.2% of the excess
T105 but not over $9,100,000 over $8,100,000
T106 Over $9,100,000 $619,000 plus 11.6% of the excess
T107 but not over $10,100,000 over $9,100,000 Substitute Bill No. 877
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T108 Over $10,100,000 $735,000 plus 12% of the excess
T109 over $10,100,000
[(7) With respect to Connecticut taxable gifts, as defined in section 357
12-643, made by a donor during a calendar year commencing on or 358
after January 1, 2019, but prior to January 1, 2020, including the 359
aggregate amount of all Connecticut taxable gifts made by the donor 360
during all calendar years commencing on or after January 1, 2005, the 361
tax imposed by section 12-640 for the calendar year shall be at the rate 362
set forth in the following schedule, with a credit allowed against such 363
tax for any tax previously paid to this state pursuant to this 364
subdivision or pursuant to subdivision (3), (4), (5) or (6) of this 365
subsection, provided such credit shall not exceed the amount of tax 366
imposed by this section: 367
T110
Amount of Taxable Gifts Rate of Tax
T111 Not over $3,600,000 None
T112 Over $3,600,000 7.8% of the excess
T113 but not over $4,100,000 over $3,600,000
T114 Over $4,100,000 $39,000 plus 8.4% of the excess
T115 but not over $5,100,000 over $4,100,000
T116 Over $5,100,000 $123,000 plus 10% of the excess
T117 but not over $6,100,000 over $5,100,000
T118 Over $6,100,000 $223,000 plus 10.4% of the excess
T119 but not over $7,100,000 over $6,100,000
T120 Over $7,100,000 $327,000 plus 10.8% of the excess
T121 but not over $8,100,000 over $7,100,000
T122 Over $8,100,000 $435,000 plus 11.2% of the excess
T123 but not over $9,100,000 over $8,100,000
T124 Over $9,100,000 $547,000 plus 11.6% of the excess
T125 but not over $10,100,000 over $9,100,000
T126 Over $10,100,000 $663,000 plus 12% of the excess
T127 over $10,100,000
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(8) With respect to Connecticut taxable gifts, as defined in section 368
12-643, made by a donor during a calendar year commencing on or 369
after January 1, 2020, but prior to January 1, 2021, including the 370
aggregate amount of all Connecticut taxable gifts made by the donor 371
during all calendar years commencing on or after January 1, 2005, the 372
tax imposed by section 12-640 for the calendar year shall be at the rate 373
set forth in the following schedule, with a credit allowed against such 374
tax for any tax previously paid to this state pursuant to this 375
subdivision or pursuant to subdivision (3), (4), (5), (6) or (7) of this 376
subsection, provided such credit shall not exceed the amount of tax 377
imposed by this section: 378
T128 Amount of Taxable Gifts Rate of Tax
T129 Not over $5,100,000 None
T130 Over $5,100,000 10% of the excess
T131 but not over $6,100,000 over $5,100,000
T132 Over $6,100,000 $100,000 plus 10.4% of the excess
T133 but not over $7,100,000 over $6,100,000
T134 Over $7,100,000 $204,000 plus 10.8% of the excess
T135 but not over $8,100,000 over $7,100,000
T136 Over $8,100,000 $312,000 plus 11.2% of the excess
T137 but not over $9,100,000 over $8,100,000
T138 Over $9,100,000 $424,000 plus 11.6% of the excess
T139 but not over $10,100,000 over $9,100,000
T140 Over $10,100,000 $540,000 plus 12% of the excess
T141 over $10,100,000
(9) With respect to Connecticut taxable gifts, as defined in section 379
12-643, made by a donor during a calendar year commencing on or 380
after January 1, 2021, but prior to January 1, 2022, including the 381
aggregate amount of all Connecticut taxable gifts made by the donor 382
during all calendar years commencing on or after January 1, 2005, the 383
tax imposed by section 12-640 for the calendar year shall be at the rate 384
set forth in the following schedule, with a credit allowed against such 385
tax for any tax previously paid to this state pursuant to this 386 Substitute Bill No. 877
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subdivision or pursuant to subdivision (3), (4), (5), (6), (7) or (8) of this 387
subsection, provided such credit shall not exceed the amount of tax 388
imposed by this section: 389
T142 Amount of Taxable Gifts Rate of Tax
T143 Not over $7,100,000 None
T144 Over $7,100,000 10.8% of the excess
T145 but not over $8,100,000 over $7,100,000
T146 Over $8,100,000 $108,000 plus 11.2% of the excess
T147 but not over $9,100,000 over $8,100,000
T148 Over $9,100,000 $220,000 plus 11.6% of the excess
T149 but not over $10,100,000 over $9,100,000
T150 Over $10,100,000 $336,000 plus 12% of the excess
T151 over $10,100,000
(10) With respect to Connecticut taxable gifts, as defined in section 390
12-643, made by a donor during a calendar year commencing on or 391
after January 1, 2022, but prior to January 1, 2023, including the 392
aggregate amount of all Connecticut taxable gifts made by the donor 393
during all calendar years commencing on or after January 1, 2005, the 394
tax imposed by section 12-640 for the calendar year shall be at the rate 395
set forth in the following schedule, with a credit allowed against such 396
tax for any tax previously paid to this state pursuant to this 397
subdivision or pursuant to subdivision (3), (4), (5), (6), (7), (8) or (9) of 398
this subsection, provided such credit shall not exceed the amount of 399
tax imposed by this section: 400
T152 Amount of Taxable Gifts Rate of Tax
T153 Not over $9,100,000 None
T154 Over $9,100,000 11.6% of the excess
T155 but not over $10,100,000 over $9,100,000
T156 Over $10,100,000 $116,000 plus 12% of the excess
T157 over $10,100,000
(11) With respect to Connecticut taxable gifts, as defined in section 401 Substitute Bill No. 877
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12-643, made by a donor during a calendar year commencing on or 402
after January 1, 2023, including the aggregate amount of all 403
Connecticut taxable gifts made by the donor during all calendar years 404
commencing on or after January 1, 2005, the tax imposed by section 12-405
640 for the calendar year shall be at the rate set forth in the following 406
schedule, with a credit allowed against such tax for any tax previously 407
paid to this state pursuant to this subdivision or pursuant to 408
subdivision (3), (4), (5), (6), (7), (8), (9) or (10) of this subsection, 409
provided such credit shall not exceed the amount of tax imposed by 410
this section: 411
T158 Amount of Taxable Gifts Rate of Tax
T159 Not over the None
T160 federal basic exclusion amount
T161 Over the 12% of the excess over the
T162 federal basic exclusion amount federal basic exclusion amount]
(b) The tax imposed by section 12-640, as amended by this act, shall 412
be paid by the donor. If the gift tax is not paid when due the donee of 413
any gift shall be personally liable for the tax to the extent of the value 414
of the gift. 415
(c) [(1)] With respect to Connecticut taxable gifts, as defined in 416
section 12-643, as amended by this act, made by a donor during a 417
calendar year commencing on or after January 1, 2016, but prior to 418
January 1, 2019, the aggregate amount of tax imposed by section 12-419
640, as amended by this act, for all calendar years commencing on or 420
after January 1, 2016, shall not exceed twenty million dollars. 421
[(2) With respect to Connecticut taxable gifts, as defined in section 422
12-643, made by a donor during a calendar year commencing on or 423
after January 1, 2019, the aggregate amount of tax imposed by section 424
12-640 for all calendar years commencing on or after January 1, 2016, 425
shall not exceed fifteen million dollars.] 426
Sec. 6. Subdivision (3) of section 12-643 of the general statutes is 427 Substitute Bill No. 877
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repealed and the following is substituted in lieu thereof (Effective from 428
passage and applicable to estates of decedents dying on or after January 1, 429
2019): 430
(3) "Connecticut taxable gifts" means taxable gifts made during a 431
calendar year commencing on or after January 1, 2005, but prior to 432
January 1, 2019, that are, (A) for residents of this state, taxable gifts, 433
wherever located, but excepting gifts of real estate or tangible personal 434
property located outside this state, and (B) for nonresidents of this 435
state, gifts of real estate or tangible personal property located within 436
this state. 437
Sec. 7. Subsections (c) to (e), inclusive, of section 12-391 of the 438
general statutes are repealed and the following is substituted in lieu 439
thereof (Effective from passage and applicable to estates of decedents dying on 440
or after January 1, 2019): 441
(c) For purposes of this section and section 12-392, as amended by 442
this act: 443
(1) (A) "Connecticut taxable estate" means, with respect to the 444
estates of decedents dying on or after January 1, 2005, but prior to 445
January 1, 2010, (i) the gross estate less allowable deductions, as 446
determined under Chapter 11 of the Internal Revenue Code, plus (ii) 447
the aggregate amount of all Connecticut taxable gifts, as defined in 448
section 12-643, as amended by this act, made by the decedent for all 449
calendar years beginning on or after January 1, 2005, but prior to 450
January 1, 2010. The deduction for state death taxes paid under Section 451
2058 of said code shall be disregarded. 452
(B) "Connecticut taxable estate" means, with respect to the estates of 453
decedents dying on or after January 1, 2010, but prior to January 1, 454
2015, (i) the gross estate less allowable deductions, as determined 455
under Chapter 11 of the Internal Revenue Code, plus (ii) the aggregate 456
amount of all Connecticut taxable gifts, as defined in section 12-643, as 457
amended by this act, made by the decedent for all calendar years 458 Substitute Bill No. 877
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beginning on or after January 1, 2005, but prior to January 1, 2015. The 459
deduction for state death taxes paid under Section 2058 of said code 460
shall be disregarded. 461
(C) "Connecticut taxable estate" means, with respect to the estates of 462
decedents dying on or after January 1, 2015, but prior to January 1, 463
2019, (i) the gross estate less allowable deductions, as determined 464
under Chapter 11 of the Internal Revenue Code, plus (ii) the aggregate 465
amount of all Connecticut taxable gifts, as defined in section 12-643, as 466
amended by this act, made by the decedent for all calendar years 467
beginning on or after January 1, 2005, but prior to January 1, 2019, 468
other than Connecticut taxable gifts that are includable in the gross 469
estate for federal estate tax purposes of the decedent, plus (iii) the 470
amount of any tax paid to this state pursuant to section 12-642, as 471
amended by this act, by the decedent or the decedent's estate on any 472
gift made by the decedent or the decedent's spouse during the three-473
year period preceding the date of the decedent's death. The deduction 474
for state death taxes paid under Section 2058 of the Internal Revenue 475
Code shall be disregarded. 476
(D) "Connecticut taxable estate" means, with respect to the estates of 477
decedents dying on or after January 1, 2019, (i) the gross estate less 478
allowable deductions, as determined under Chapter 11 of the Internal 479
Revenue Code, plus (ii) the aggregate amount of all taxable gifts, as 480
defined in section 12-643, as amended by this act, made by the 481
decedent for all calendar years beginning on or after January 1, 2005, 482
but prior to January 1, 2019, other than Connecticut taxable gifts that 483
are includable in the gross estate for federal tax purposes of the 484
decedent, plus (iii) the amount of any tax paid to this state pursuant to 485
section 12-642, as amended by this act, by the decedent or the 486
decedent's estate on any gift made by the decedent or the decedent's 487
spouse during the three-year period preceding the date of the 488
decedent's death, plus (iv) the amount of any taxable gift, as defined in 489
Section 2503 of the Internal Revenue Code, excluding any taxable gift 490
made when the decedent was a nonresident or that is real property or 491 Substitute Bill No. 877
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tangible personal property having an actual situs outside this state at 492
the time the gift was made, that is (I) made on or after January 1, 2019, 493
(II) not otherwise included in the decedent's gross estate, and (III) 494
made during the three-year period preceding the date of the decedent's 495
death. The deduction for state death taxes paid under Section 2058 of 496
the Internal Revenue Code shall be disregarded. 497
(2) "Internal Revenue Code" means the Internal Revenue Code of 498
1986, or any subsequent corresponding internal revenue code of the 499
United States, as amended from time to time, except in the event of 500
repeal of the federal estate tax, then all references to the Internal 501
Revenue Code in this section shall mean the Internal Revenue Code as 502
in force on the day prior to the effective date of such repeal. 503
(3) "Gross estate" means the gross estate, for federal estate tax 504
purposes. 505
(4) "Federal basic exclusion amount" means the dollar amount 506
published annually by the Internal Revenue Service at which a 507
decedent would be required to file a federal estate tax return based on 508
the value of the decedent's gross estate and federally taxable gifts. 509
(d) (1) (A) With respect to the estates of decedents who die on or 510
after January 1, 2005, but prior to January 1, 2010, a tax is imposed 511
upon the transfer of the estate of each person who at the time of death 512
was a resident of this state. The amount of the tax shall be determined 513
using the schedule in subsection (g) of this section. A credit shall be 514
allowed against such tax for any taxes paid to this state pursuant to 515
section 12-642, as amended by this act, for Connecticut taxable gifts 516
made on or after January 1, 2005, but prior to January 1, 2010. 517
(B) With respect to the estates of decedents who die on or after 518
January 1, 2010, but prior to January 1, 2015, a tax is imposed upon the 519
transfer of the estate of each person who at the time of death was a 520
resident of this state. The amount of the tax shall be determined using 521
the schedule in subsection (g) of this section. A credit shall be allowed 522 Substitute Bill No. 877
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against such tax for any taxes paid to this state pursuant to section 12-523
642, as amended by this act, for Connecticut taxable gifts made on or 524
after January 1, 2005, but prior to January 1, 2015, provided such credit 525
shall not exceed the amount of tax imposed by this section. 526
(C) With respect to the estates of decedents who die on or after 527
January 1, 2015, but prior to January 1, 2016, a tax is imposed upon the 528
transfer of the estate of each person who at the time of death was a 529
resident of this state. The amount of the tax shall be determined using 530
the schedule in subsection (g) of this section. A credit shall be allowed 531
against such tax for (i) any taxes paid to this state pursuant to section 532
12-642, as amended by this act, by the decedent or the decedent's estate 533
for Connecticut taxable gifts made on or after January 1, 2005, but prior 534
to January 1, 2016, and (ii) any taxes paid by the decedent's spouse to 535
this state pursuant to section 12-642, as amended by this act, for 536
Connecticut taxable gifts made by the decedent on or after January 1, 537
2005, but prior to January 1, 2016, that are includable in the gross estate 538
of the decedent, provided such credit shall not exceed the amount of 539
tax imposed by this section. 540
(D) With respect to the estates of decedents who die on or after 541
January 1, 2016, but prior to January 1, 2019, a tax is imposed upon the 542
transfer of the estate of each person who at the time of death was a 543
resident of this state. The amount of the tax shall be determined using 544
the schedule in subsection (g) of this section. A credit shall be allowed 545
against such tax for (i) any taxes paid to this state pursuant to section 546
12-642, as amended by this act, by the decedent or the decedent's estate 547
for Connecticut taxable gifts made on or after January 1, 2005, but prior 548
to January 1, 2019, and (ii) any taxes paid by the decedent's spouse to 549
this state pursuant to section 12-642, as amended by this act, for 550
Connecticut taxable gifts made by the decedent on or after January 1, 551
2005, but prior to January 1, 2019, that are includable in the gross estate 552
of the decedent, provided such credit shall not exceed the amount of 553
tax imposed by this section. In no event shall the amount of tax 554
payable under this section exceed twenty million dollars. Such twenty-555 Substitute Bill No. 877
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million-dollar limit shall be reduced by the amount of (I) any taxes 556
paid to this state pursuant to section 12-642, as amended by this act, by 557
the decedent or the decedent's estate for Connecticut taxable gifts 558
made on or after January 1, 2016, but prior to January 1, 2019, and (II) 559
any taxes paid by the decedent's spouse to this state pursuant to 560
section 12-642, as amended by this act, for Connecticut taxable gifts 561
made by the decedent on or after January 1, 2016, but prior to January 562
1, 2019, that are includable in the gross estate of the decedent, but in no 563
event shall the amount be reduced below zero. 564
(E) With respect to the estates of decedents who die on or after 565
January 1, 2019, a tax is imposed upon the transfer of the estate of each 566
person who at the time of death was a resident of this state. The 567
amount of the tax shall be determined using the schedule in subsection 568
(g) of this section. A credit shall be allowed against such tax for (i) any 569
taxes paid to this state pursuant to section 12-642, as amended by this 570
act, by the decedent or the decedent's estate for Connecticut taxable 571
gifts made on or after January 1, 2005, and (ii) any taxes paid by the 572
decedent's spouse to this state pursuant to section 12-642, as amended 573
by this act, for Connecticut taxable gifts made by the decedent on or 574
after January 1, 2005, that are includable in the gross estate of the 575
decedent, provided such credit shall not exceed the amount of tax 576
imposed by this section. In no event shall the amount of tax payable 577
under this section exceed fifteen million dollars. Such fifteen-million-578
dollar limit shall be reduced by the amount of (I) any taxes paid to this 579
state pursuant to section 12-642, as amended by this act, by the 580
decedent or the decedent's estate for Connecticut taxable gifts made on 581
or after January 1, 2016, and (II) any taxes paid by the decedent's 582
spouse to this state pursuant to section 12-642, as amended by this act, 583
for Connecticut taxable gifts made by the decedent on or after January 584
1, 2016, that are includable in the gross estate of the decedent, but in no 585
event shall the amount be reduced below zero. 586
(2) If real or tangible personal property of such decedent is located 587
outside this state, the amount of tax due under this section shall be 588 Substitute Bill No. 877
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reduced by an amount computed by multiplying the tax otherwise due 589
pursuant to subdivision (1) of this subsection, without regard to the 590
credit allowed for any taxes paid to this state pursuant to section 12-591
642, as amended by this act, by a fraction, (A) the numerator of which 592
is the value of that part of the decedent's gross estate attributable to 593
real or tangible personal property located outside of the state, and (B) 594
the denominator of which is the value of the decedent's gross estate. 595
(3) For a resident estate, the state shall have the power to levy the 596
estate tax upon real property situated in this state, tangible personal 597
property having an actual situs in this state and intangible personal 598
property included in the gross estate of the decedent, regardless of 599
where it is located. The state is permitted to calculate the estate tax and 600
levy said tax to the fullest extent permitted by the Constitution of the 601
United States. 602
(e) (1) (A) With respect to the estates of decedents who die on or 603
after January 1, 2005, but prior to January 1, 2010, a tax is imposed 604
upon the transfer of the estate of each person who at the time of death 605
was a nonresident of this state. The amount of such tax shall be 606
computed by multiplying (i) the amount of tax determined using the 607
schedule in subsection (g) of this section by (ii) a fraction, the 608
numerator of which is the value of that part of the decedent's gross 609
estate over which this state has jurisdiction for estate tax purposes, and 610
the denominator of which is the value of the decedent's gross estate. A 611
credit shall be allowed against such tax for any taxes paid to this state 612
pursuant to section 12-642, as amended by this act, for Connecticut 613
taxable gifts made on or after January 1, 2005, but prior to January 1, 614
2010. 615
(B) With respect to the estates of decedents who die on or after 616
January 1, 2010, but prior to January 1, 2016, a tax is imposed upon the 617
transfer of the estate of each person who at the time of death was a 618
nonresident of this state. The amount of such tax shall be computed by 619
multiplying (i) the amount of tax determined using the schedule in 620
subsection (g) of this section by (ii) a fraction, the numerator of which 621 Substitute Bill No. 877
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is the value of that part of the decedent's gross estate over which this 622
state has jurisdiction for estate tax purposes, and the denominator of 623
which is the value of the decedent's gross estate. A credit shall be 624
allowed against such tax for any taxes paid to this state pursuant to 625
section 12-642, as amended by this act, for Connecticut taxable gifts 626
made on or after January 1, 2005, but prior to January 1, 2016, provided 627
such credit shall not exceed the amount of tax imposed by this section. 628
(C) With respect to the estates of decedents who die on or after 629
January 1, 2016, but prior to January 1, 2019, a tax is imposed upon the 630
transfer of the estate of each person who at the time of death was a 631
nonresident of this state. The amount of such tax shall be computed by 632
multiplying (i) the amount of tax determined using the schedule in 633
subsection (g) of this section by (ii) a fraction, the numerator of which 634
is the value of that part of the decedent's gross estate over which this 635
state has jurisdiction for estate tax purposes, and the denominator of 636
which is the value of the decedent's gross estate. A credit shall be 637
allowed against such tax for any taxes paid to this state pursuant to 638
section 12-642, as amended by this act, for Connecticut taxable gifts 639
made on or after January 1, 2005, but prior to January 1, 2019, provided 640
such credit shall not exceed the amount of tax imposed by this section. 641
In no event shall the amount of tax payable under this section exceed 642
twenty million dollars. Such twenty-million-dollar limit shall be 643
reduced by the amount of (I) any taxes paid to this state pursuant to 644
section 12-642, as amended by this act, by the decedent or the 645
decedent's estate for Connecticut taxable gifts made on or after January 646
1, 2016, but prior to January 1, 2019, and (II) any taxes paid by the 647
decedent's spouse to this state pursuant to section 12-642, as amended 648
by this act, for Connecticut taxable gifts made by the decedent on or 649
after January 1, 2016, but prior to January 1, 2019, that are includable in 650
the gross estate of the decedent, but in no event shall the amount be 651
reduced below zero. 652
(D) With respect to the estates of decedents who die on or after 653
January 1, 2019, a tax is imposed upon the transfer of the estate of each 654 Substitute Bill No. 877
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person who at the time of death was a nonresident of this state. The 655
amount of such tax shall be computed by multiplying the amount of 656
tax determined using the schedule in subsection (g) of this section by a 657
fraction, the numerator of which is the value of that part of the 658
decedent's gross estate over which this state has jurisdiction for estate 659
tax purposes, and the denominator of which is the value of the 660
decedent's gross estate. A credit shall be allowed against such tax for 661
(i) any taxes paid to this state pursuant to section 12-642, as amended 662
by this act, by the decedent or the decedent's estate for Connecticut 663
taxable gifts made on or after January 1, 2005, and (ii) any taxes paid 664
by the decedent's spouse to this state pursuant to section 12-642, as 665
amended by this act, for Connecticut taxable gifts made by the 666
decedent on or after January 1, 2005, that are includable in the gross 667
estate of the decedent, provided such credit shall not exceed the 668
amount of tax imposed by this section. In no event shall the amount of 669
tax payable under this section exceed fifteen million dollars. Such 670
fifteen-million-dollar limit shall be reduced by the amount of (I) any 671
taxes paid to this state pursuant to section 12-642, as amended by this 672
act, by the decedent or the decedent's estate for Connecticut taxable 673
gifts made on or after January 1, 2016, and (II) any taxes paid by the 674
decedent's spouse to this state pursuant to section 12-642, as amended 675
by this act, for Connecticut taxable gifts made by the decedent on or 676
after January 1, 2016, that are includable in the gross estate of the 677
decedent, but in no event shall the amount be reduced below zero. 678
(2) For a nonresident estate, the state shall have the power to levy 679
the estate tax upon all real property situated in this state and tangible 680
personal property having an actual situs in this state. The state is 681
permitted to calculate the estate tax and levy said tax to the fullest 682
extent permitted by the Constitution of the United States. 683
Sec. 8. Subparagraph (L) of subdivision (1) of section 12-408 of the 684
general statutes is repealed and the following is substituted in lieu 685
thereof (Effective July 1, 2019, and applicable to sales occurring on or after 686
July 1, 2019): 687 Substitute Bill No. 877
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(L) (i) For calendar months commencing on or after July 1, 2017, the 688
commissioner shall deposit into the Special Transportation Fund 689
established under section 13b-68 seven and nine-tenths per cent of the 690
amounts received by the state from the tax imposed under 691
subparagraph (A) of this subdivision; 692
(ii) For calendar months commencing on or after July 1, 2018, but 693
prior to July 1, 2019, the commissioner shall deposit into the Special 694
Transportation Fund established under section 13b-68 eight per cent of 695
the amounts received by the state from the tax imposed under 696
subparagraphs (A) and (H) of this subdivision on the sale of a motor 697
vehicle; 698
(iii) For calendar months commencing on or after July 1, 2019, but 699
prior to July 1, 2020, the commissioner shall deposit into the Special 700
Transportation Fund established under section 13b-68 [thirty-three] 701
fifteen per cent of the amounts received by the state from the tax 702
imposed under subparagraphs (A) and (H) of this subdivision on the 703
sale of a motor vehicle; and 704
(iv) For calendar months commencing on or after July 1, 2020, [but 705
prior to July 1, 2021,] the commissioner shall deposit into the Special 706
Transportation Fund established under section 13b-68 [fifty-six] 707
eighteen per cent of the amounts received by the state from the tax 708
imposed under subparagraphs (A) and (H) of this subdivision on the 709
sale of a motor vehicle. [;] 710
[(v) For calendar months commencing on or after July 1, 2021, but 711
prior to July 1, 2022, the commissioner shall deposit into the Special 712
Transportation Fund established under section 13b-68 seventy-five per 713
cent of the amounts received by the state from the tax imposed under 714
subparagraphs (A) and (H) of this subdivision on the sale of a motor 715
vehicle; and 716
(vi) For calendar months commencing on or after July 1, 2022, the 717
commissioner shall deposit into the Special Transportation Fund 718 Substitute Bill No. 877
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established under section 13b-68 one hundred per cent of the amounts 719
received by the state from the tax imposed under subparagraphs (A) 720
and (H) of this subdivision on the sale of a motor vehicle.] 721
Sec. 9. Subparagraph (K) of subdivision (1) of section 12-411 of the 722
general statutes is repealed and the following is substituted in lieu 723
thereof (Effective July 1, 2019, and applicable to sales occurring on or after 724
July 1, 2019): 725
(K) (i) For calendar months commencing on or after July 1, 2017, the 726
commissioner shall deposit into said Special Transportation Fund 727
seven and nine-tenths per cent of the amounts received by the state 728
from the tax imposed under subparagraph (A) of this subdivision; 729
(ii) For calendar months commencing on or after July 1, 2018, but 730
prior to July 1, 2019, the commissioner shall deposit into the Special 731
Transportation Fund established under section 13b-68 eight per cent of 732
the amounts received by the state from the tax imposed under 733
subparagraphs (A) and (H) of this subdivision on the acceptance or 734
receipt in this state of a motor vehicle; 735
(iii) For calendar months commencing on or after July 1, 2019, but 736
prior to July 1, 2020, the commissioner shall deposit into the Special 737
Transportation Fund established under section 13b-68 [thirty-three] 738
fifteen per cent of the amounts received by the state from the tax 739
imposed under subparagraphs (A) and (H) of this subdivision on the 740
acceptance or receipt in this state of a motor vehicle; and 741
(iv) For calendar months commencing on or after July 1, 2020, [but 742
prior to July 1, 2021,] the commissioner shall deposit into the Special 743
Transportation Fund established under section 13b-68 [fifty-six] 744
eighteen per cent of the amounts received by the state from the tax 745
imposed under subparagraphs (A) and (H) of this subdivision on the 746
acceptance or receipt in this state of a motor vehicle. [;] 747
[(v) For calendar months commencing on or after July 1, 2021, but 748
prior to July 1, 2022, the commissioner shall deposit into the Special 749 Substitute Bill No. 877
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Transportation Fund established under section 13b-68 seventy-five per 750
cent of the amounts received by the state from the tax imposed under 751
subparagraphs (A) and (H) of this subdivision on the acceptance or 752
receipt in this state of a motor vehicle; and 753
(vi) For calendar months commencing on or after July 1, 2022, the 754
commissioner shall deposit into the Special Transportation Fund 755
established under section 13b-68 one hundred per cent of the amounts 756
received by the state from the tax imposed under subparagraphs (A) 757
and (H) of this subdivision on the acceptance or receipt in this state of 758
a motor vehicle.] 759
Sec. 10. Subdivision (13) of subsection (a) of section 12-407 of the 760
general statutes is repealed and the following is substituted in lieu 761
thereof (Effective October 1, 2019, and applicable to sales occurring on or 762
after October 1, 2019): 763
(13) "Tangible personal property" means personal property [which] 764
that may be seen, weighed, measured, felt or touched or [which] that is 765
in any other manner perceptible to the senses. [including] "Tangible 766
personal property" includes (A) digital goods, (B) canned or prewritten 767
computer software, [. Tangible personal property includes] including 768
canned or prewritten software that is electronically accessed or 769
transferred, other than when purchased by a business for use by such 770
business, and any additional content related to such software, and (C) 771
the distribution, generation or transmission of electricity. 772
Sec. 11. Subsection (a) of section 12-407 of the general statutes is 773
amended by adding subdivision (43) as follows (Effective October 1, 774
2019, and applicable to sales occurring on or after October 1, 2019): 775
(NEW) (43) "Digital goods" means audio works, visual works, 776
audio-visual works, reading materials or ring tones, that are 777
electronically accessed or transferred. 778
Sec. 12. Subdivision (5) of section 12-410 of the general statutes is 779
repealed and the following is substituted in lieu thereof (Effective 780 Substitute Bill No. 877
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October 1, 2019, and applicable to sales occurring on or after October 1, 781
2019): 782
(5) (A) For the purpose of the proper administration of this chapter 783
and to prevent evasion of the sales tax, a sale of any service described 784
in subdivision (37) of subsection (a) of section 12-407, as amended by 785
this act, shall be considered a sale for resale only if the service to be 786
resold is an integral, inseparable component part of a service described 787
in said subdivision that is to be subsequently sold by the purchaser to 788
an ultimate consumer. The purchaser of the service for resale shall 789
maintain, in such form as the commissioner requires, records that 790
substantiate: (i) From whom the service was purchased and to whom 791
the service was sold, (ii) the purchase price of the service, and (iii) the 792
nature of the service to demonstrate that the services were an integral, 793
inseparable component part of a service described in subdivision (37) 794
of subsection (a) of section 12-407, as amended by this act, that was 795
subsequently sold to a consumer. 796
(B) Notwithstanding the provisions of subparagraph (A) of this 797
subdivision, no sale of a service described in subdivision (37) of 798
subsection (a) of section 12-407, as amended by this act, by a seller 799
shall be considered a sale for resale if such service is to be 800
subsequently sold by the purchaser to an ultimate consumer that is 801
affiliated with the purchaser in the manner described in subparagraph 802
(A) of subdivision (62) of section 12-412. 803
(C) For purposes of subparagraph (A) of this subdivision, the sale of 804
canned or prewritten computer software shall be considered a sale for 805
resale if such software is subsequently sold, licensed or leased 806
unaltered by the purchaser to an ultimate consumer. The purchaser of 807
the software for resale shall maintain, in such form as the 808
commissioner requires, records that substantiate: (i) From whom the 809
software was purchased and to whom the software was sold, licensed 810
or leased, (ii) the purchase price of the software, and (iii) the nature of 811
the transaction with the ultimate consumer to demonstrate that the 812
same software was provided unaltered to the ultimate consumer. 813 Substitute Bill No. 877
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(D) For purposes of subparagraph (A) of this subdivision, the sale of 814
digital goods or services described in subdivision (37) of subsection (a) 815
of section 12-407, as amended by this act, shall be considered a sale for 816
resale if such digital goods or services are subsequently resold as an 817
integral, inseparable component part of a digital good or a service 818
described in subdivision (37) of subsection (a) of section 12-407, as 819
amended by this act, by the purchaser to an ultimate consumer. The 820
purchaser of the digital goods or services described in subdivision (37) 821
of subsection (a) of section 12-407, as amended by this act, for resale 822
shall maintain, in such form as the commissioner requires, records that 823
substantiate: (i) From whom such digital goods or services were 824
purchased and to whom such digital goods or services were resold, (ii) 825
the purchase price of such digital goods or services, and (iii) the nature 826
of the transaction with the ultimate consumer. 827
Sec. 13. Subdivision (37) of subsection (a) of section 12-407 of the 828
general statutes is repealed and the following is substituted in lieu 829
thereof (Effective October 1, 2019, and applicable to sales occurring on or 830
after October 1, 2019): 831
(37) "Services" for purposes of subdivision (2) of this subsection, 832
means: 833
(A) Computer and data processing services, including, but not 834
limited to, time, programming, code writing, modification of existing 835
programs, feasibility studies and installation and implementation of 836
software programs and systems even where such services are rendered 837
in connection with the development, creation or production of canned 838
or custom software or the license of custom software, but excluding 839
digital goods; 840
(B) Credit information and reporting services; 841
(C) Services by employment agencies and agencies providing 842
personnel services; 843
(D) Private investigation, protection, patrol work, watchman and 844 Substitute Bill No. 877
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armored car services, exclusive of (i) services of off-duty police officers 845
and off-duty firefighters, and (ii) coin and currency services provided 846
to a financial services company by or through another financial 847
services company. For purposes of this subparagraph, "financial 848
services company" has the same meaning as provided under 849
subparagraphs (A) to (H), inclusive, of subdivision (6) of subsection (a) 850
of section 12-218b; 851
(E) Painting and lettering services; 852
(F) Photographic studio services; 853
(G) Telephone answering services; 854
(H) Stenographic services; 855
(I) Services to industrial, commercial or income-producing real 856
property, including, but not limited to, such services as management, 857
electrical, plumbing, painting and carpentry, provided 858
income-producing property shall not include property used 859
exclusively for residential purposes in which the owner resides and 860
which contains no more than three dwelling units, or a housing facility 861
for low and moderate income families and persons owned or operated 862
by a nonprofit housing organization, as defined in subdivision (29) of 863
section 12-412; 864
(J) Business analysis, management, management consulting and 865
public relations services, excluding (i) any environmental consulting 866
services, (ii) any training services provided by an institution of higher 867
education licensed or accredited by the Board of Regents for Higher 868
Education or Office of Higher Education pursuant to sections 10a-35a 869
and 10a-34, respectively, and (iii) on and after January 1, 1994, any 870
business analysis, management, management consulting and public 871
relations services when such services are rendered in connection with 872
an aircraft leased or owned by a certificated air carrier or in connection 873
with an aircraft which has a maximum certificated take-off weight of 874
six thousand pounds or more; 875 Substitute Bill No. 877
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(K) Services providing "piped-in" music to business or professional 876
establishments; 877
(L) Flight instruction and chartering services by a certificated air 878
carrier on an aircraft, the use of which for such purposes, but for the 879
provisions of subdivision (4) of section 12-410 and subdivision (12) of 880
section 12-411, would be deemed a retail sale and a taxable storage or 881
use, respectively, of such aircraft by such carrier; 882
(M) Motor vehicle repair services, including any type of repair, 883
painting or replacement related to the body or any of the operating 884
parts of a motor vehicle; 885
(N) Motor vehicle parking, including the provision of space, other 886
than metered space, in a lot having thirty or more spaces, excluding (i) 887
space in a parking lot owned or leased under the terms of a lease of not 888
less than ten years' duration and operated by an employer for the 889
exclusive use of its employees, (ii) space in municipally operated 890
railroad parking facilities in municipalities located within an area of 891
the state designated as a severe nonattainment area for ozone under 892
the federal Clean Air Act or space in a railroad parking facility in a 893
municipality located within an area of the state designated as a severe 894
nonattainment area for ozone under the federal Clean Air Act owned 895
or operated by the state on or after April 1, 2000, (iii) space in a 896
seasonal parking lot provided by an entity subject to the exemption set 897
forth in subdivision (1) of section 12-412, and (iv) space in a 898
municipally owned parking lot; 899
(O) Radio or television repair services; 900
(P) Furniture reupholstering and repair services; 901
(Q) Repair services to any electrical or electronic device, including, 902
but not limited to, equipment used for purposes of refrigeration or 903
air-conditioning; 904
(R) Lobbying or consulting services for purposes of representing the 905 Substitute Bill No. 877
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interests of a client in relation to the functions of any governmental 906
entity or instrumentality; 907
(S) Services of the agent of any person in relation to the sale of any 908
item of tangible personal property for such person, exclusive of the 909
services of a consignee selling works of art, as defined in subsection (b) 910
of section 12-376c, or articles of clothing or footwear intended to be 911
worn on or about the human body other than (i) any special clothing 912
or footwear primarily designed for athletic activity or protective use 913
and which is not normally worn except when used for the athletic 914
activity or protective use for which it was designed, and (ii) jewelry, 915
handbags, luggage, umbrellas, wallets, watches and similar items 916
carried on or about the human body but not worn on the body, under 917
consignment, exclusive of services provided by an auctioneer; 918
(T) Locksmith services; 919
(U) Advertising or public relations services, including layout, art 920
direction, graphic design, mechanical preparation or production 921
supervision, not related to the development of media advertising or 922
cooperative direct mail advertising; 923
(V) Landscaping and horticulture services; 924
(W) Window cleaning services; 925
(X) Maintenance services; 926
(Y) Janitorial services; 927
(Z) Exterminating services; 928
(AA) Swimming pool cleaning and maintenance services; 929
(BB) Miscellaneous personal services included in industry group 729 930
in the Standard Industrial Classification Manual, United States Office 931
of Management and Budget, 1987 edition, or [U.S.] industry group 932
532220, 812191, 812199 or 812990 [in] of the North American 933 Substitute Bill No. 877
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[Industrial] Industry Classification System United States Manual, 934
United States Office of Management and Budget (NAICS), 1997 935
edition, exclusive of (i) services rendered by massage therapists 936
licensed pursuant to chapter 384a, and (ii) services rendered by an 937
electrologist licensed pursuant to chapter 388; 938
(CC) Any repair or maintenance service to any item of tangible 939
personal property including any contract of warranty or service related 940
to any such item; 941
(DD) Business analysis, management or managing consulting 942
services rendered by a general partner, or an affiliate thereof, to a 943
limited partnership, provided (i) the general partner, or an affiliate 944
thereof, is compensated for the rendition of such services other than 945
through a distributive share of partnership profits or an annual 946
percentage of partnership capital or assets established in the limited 947
partnership's offering statement, and (ii) the general partner, or an 948
affiliate thereof, offers such services to others, including any other 949
partnership. As used in this subparagraph "an affiliate of a general 950
partner" means an entity which is directly or indirectly owned fifty per 951
cent or more in common with a general partner; 952
(EE) Notwithstanding the provisions of section 12-412, as amended 953
by this act, except subdivision (87) of said section 12-412, patient care 954
services, as defined in subdivision (29) of this subsection by a hospital, 955
except that "sale" and "selling" does not include such patient care 956
services for which payment is received by the hospital during the 957
period commencing July 1, 2001, and ending June 30, 2003; 958
(FF) Health and athletic club services, exclusive of (i) any such 959
services provided without any additional charge which are included in 960
any dues or initiation fees paid to any such club, which dues or fees 961
are subject to tax under section 12-543, and (ii) any such services 962
provided by a municipality or an organization that is described in 963
Section 501(c) of the Internal Revenue Code of 1986, or any subsequent 964
corresponding internal revenue code of the United States, as amended 965 Substitute Bill No. 877
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from time to time; [amended;] 966
(GG) Motor vehicle storage services, including storage of motor 967
homes, campers and camp trailers, other than the furnishing of space 968
as described in subparagraph (P) of subdivision (2) of this subsection; 969
(HH) Packing and crating services, other than those provided in 970
connection with the sale of tangible personal property by the retailer of 971
such property; 972
(II) Motor vehicle towing and road services, other than motor 973
vehicle repair services; 974
(JJ) Intrastate transportation services provided by livery services, 975
including limousines, community cars or vans, with a driver. Intrastate 976
transportation services shall not include transportation by taxicab, 977
motor bus, ambulance or ambulette, scheduled public transportation, 978
nonemergency medical transportation provided under the Medicaid 979
program, paratransit services provided by agreement or arrangement 980
with the state or any political subdivision of the state, dial-a-ride 981
services or services provided in connection with funerals; 982
(KK) Pet grooming and pet boarding services, except if such services 983
are provided as an integral part of professional veterinary services, 984
and pet obedience services; 985
(LL) Services in connection with a cosmetic medical procedure. For 986
purposes of this subparagraph, "cosmetic medical procedure" means 987
any medical procedure performed on an individual that is directed at 988
improving the individual's appearance and that does not meaningfully 989
promote the proper function of the body or prevent or treat illness or 990
disease. "Cosmetic medical procedure" includes, but is not limited to, 991
cosmetic surgery, hair transplants, cosmetic injections, cosmetic soft 992
tissue fillers, dermabrasion and chemical peel, laser hair removal, laser 993
skin resurfacing, laser treatment of leg veins and sclerotherapy. 994
"Cosmetic medical procedure" does not include reconstructive surgery. 995
"Reconstructive surgery" includes any surgery performed on abnormal 996 Substitute Bill No. 877
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structures caused by or related to congenital defects, developmental 997
abnormalities, trauma, infection, tumors or disease, including 998
procedures to improve function or give a more normal appearance; 999
(MM) Manicure services, pedicure services and all other nail 1000
services, regardless of where performed, including airbrushing, fills, 1001
full sets, nail sculpting, paraffin treatments and polishes; 1002
(NN) Spa services, regardless of where performed, including body 1003
waxing and wraps, peels, scrubs and facials; [and] 1004
(OO) Car wash services, including coin-operated car washes; 1005
(PP) Prearranged rides that originate in this state, provided by 1006
transportation network companies. As used in this subparagraph, 1007
"prearranged ride" and "transportation network company" have the 1008
same meanings as provided in section 13b-116. 1009
Sec. 14. Subsections (b) and (c) of section 13b-121 of the general 1010
statutes are repealed and the following is substituted in lieu thereof 1011
(Effective from passage): 1012
(b) Each transportation network company shall pay a fee of twenty-1013
five cents on each prearranged ride that originates in this state prior to 1014
October 1, 2019. 1015
(c) On or before the last day of the month next succeeding each 1016
calendar quarter, until and including October 31, 2019, each 1017
transportation network company shall: (1) File a return electronically 1018
for the preceding period with the Commissioner of Revenue Services 1019
on such forms as the commissioner may prescribe; and (2) make 1020
payment of the fees required under subsection (b) of this section by 1021
electronic funds transfer in the manner provided by chapter 228g. Any 1022
document received and maintained by the commissioner with respect 1023
to a transportation network company shall be return information, as 1024
defined in section 12-15, and shall not be subject to disclosure under 1025
the Freedom of Information Act, as defined in section 1-200. 1026 Substitute Bill No. 877
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Sec. 15. Subdivision (1) of section 12-408 of the general statutes, as 1027
amended by section 8 of this act, is repealed and the following is 1028
substituted in lieu thereof (Effective January 1, 2020, and applicable to 1029
sales occurring on or after January 1, 2020): 1030
(1) (A) For the privilege of making any sales, as defined in 1031
subdivision (2) of subsection (a) of section 12-407, at retail, in this state 1032
for a consideration, a tax is hereby imposed on all retailers at the rate 1033
of six and thirty-five-hundredths per cent of the gross receipts of any 1034
retailer from the sale of all tangible personal property sold at retail or 1035
from the rendering of any services constituting a sale in accordance 1036
with subdivision (2) of subsection (a) of section 12-407, except, in lieu 1037
of said rate, [of six and thirty-five-hundredths per cent,] the rates 1038
provided in subparagraphs (B) to [(H)] (I), inclusive, of this 1039
subdivision; 1040
(B) (i) At a rate of fifteen per cent with respect to each transfer of 1041
occupancy, from the total amount of rent received by a hotel or 1042
lodging house for the first period not exceeding thirty consecutive 1043
calendar days; 1044
(ii) At a rate of eleven per cent with respect to each transfer of 1045
occupancy, from the total amount of rent received by a bed and 1046
breakfast establishment for the first period not exceeding thirty 1047
consecutive calendar days; 1048
(C) With respect to the sale of a motor vehicle to any individual who 1049
is a member of the armed forces of the United States and is on full-time 1050
active duty in Connecticut and who is considered, under 50 App USC 1051
574, a resident of another state, or to any such individual and the 1052
spouse thereof, at a rate of four and one-half per cent of the gross 1053
receipts of any retailer from such sales, provided such retailer requires 1054
and maintains a declaration by such individual, prescribed as to form 1055
by the commissioner and bearing notice to the effect that false 1056
statements made in such declaration are punishable, or other evidence, 1057
satisfactory to the commissioner, concerning the purchaser's state of 1058 Substitute Bill No. 877
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residence under 50 App USC 574; 1059
(D) (i) With respect to the sales of computer and data processing 1060
services occurring on or after July 1, 2001, at the rate of one per cent, 1061
and (ii) with respect to sales of Internet access services, on and after 1062
July 1, 2001, such services shall be exempt from such tax; 1063
(E) (i) With respect to the sales of labor that is otherwise taxable 1064
under subparagraph (C) or (G) of subdivision (2) of subsection (a) of 1065
section 12-407 on existing vessels and repair or maintenance services 1066
on vessels occurring on and after July 1, 1999, such services shall be 1067
exempt from such tax; 1068
(ii) With respect to the sale of a vessel, a motor for a vessel or a 1069
trailer used for transporting a vessel, at the rate of two and ninety-1070
nine-hundredths per cent, except that the sale of a vessel shall be 1071
exempt from such tax if such vessel is docked in this state for sixty or 1072
fewer days in a calendar year; 1073
(F) With respect to patient care services for which payment is 1074
received by the hospital on or after July 1, 1999, and prior to July 1, 1075
2001, at the rate of five and three-fourths per cent and on and after July 1076
1, 2001, such services shall be exempt from such tax; 1077
(G) With respect to the rental or leasing of a passenger motor 1078
vehicle for a period of thirty consecutive calendar days or less, at a rate 1079
of nine and thirty-five-hundredths per cent; 1080
(H) With respect to the sale of (i) a motor vehicle for a sales price 1081
exceeding fifty thousand dollars, at a rate of seven and three-fourths 1082
per cent on the entire sales price, (ii) jewelry, whether real or imitation, 1083
for a sales price exceeding five thousand dollars, at a rate of seven and 1084
three-fourths per cent on the entire sales price, and (iii) an article of 1085
clothing or footwear intended to be worn on or about the human body, 1086
a handbag, luggage, umbrella, wallet or watch for a sales price 1087
exceeding one thousand dollars, at a rate of seven and three-fourths 1088
per cent on the entire sales price. For purposes of this subparagraph, 1089 Substitute Bill No. 877
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"motor vehicle" has the meaning provided in section 14-1, but does not 1090
include a motor vehicle subject to the provisions of subparagraph (C) 1091
of this subdivision, a motor vehicle having a gross vehicle weight 1092
rating over twelve thousand five hundred pounds, or a motor vehicle 1093
having a gross vehicle weight rating of twelve thousand five hundred 1094
pounds or less that is not used for private passenger purposes, but is 1095
designed or used to transport merchandise, freight or persons in 1096
connection with any business enterprise and issued a commercial 1097
registration or more specific type of registration by the Department of 1098
Motor Vehicles; 1099
(I) With respect to the sale of meals, as defined in subdivision (13) of 1100
section 12-412, sold by an eating establishment, caterer or grocery 1101
store; and spirituous, malt or vinous liquors, soft drinks, sodas or 1102
beverages such as are ordinarily dispensed at bars and soda fountains, 1103
or in connection therewith; at the rate of seven and thirty-five-1104
hundredths per cent; 1105
[(I)] (J) The rate of tax imposed by this chapter shall be applicable to 1106
all retail sales upon the effective date of such rate, except that a new 1107
rate [which] that represents an increase in the rate applicable to the 1108
sale shall not apply to any sales transaction wherein a binding sales 1109
contract without an escalator clause has been entered into prior to the 1110
effective date of the new rate and delivery is made within ninety days 1111
after the effective date of the new rate. For the purposes of payment of 1112
the tax imposed under this section, any retailer of services taxable 1113
under subdivision (37) of subsection (a) of section 12-407, as amended 1114
by this act, who computes taxable income, for purposes of taxation 1115
under the Internal Revenue Code of 1986, or any subsequent 1116
corresponding internal revenue code of the United States, as amended 1117
from time to time, [amended,] on an accounting basis [which] that 1118
recognizes only cash or other valuable consideration actually received 1119
as income and who is liable for such tax only due to the rendering of 1120
such services may make payments related to such tax for the period 1121
during which such income is received, without penalty or interest, 1122 Substitute Bill No. 877
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without regard to when such service is rendered; 1123
[(J)] (K) (i) For calendar quarters ending on or after September 30, 1124
2019, the commissioner shall deposit into the regional planning 1125
incentive account, established pursuant to section 4-66k, six and seven-1126
tenths per cent of the amounts received by the state from the tax 1127
imposed under subparagraph (B) of this subdivision and ten and 1128
seven-tenths per cent of the amounts received by the state from the tax 1129
imposed under subparagraph (G) of this subdivision; 1130
(ii) For calendar quarters ending on or after September 30, 2018, the 1131
commissioner shall deposit into the Tourism Fund established under 1132
section 10-395b ten per cent of the amounts received by the state from 1133
the tax imposed under subparagraph (B) of this subdivision; 1134
[(K)] (L) For calendar months commencing on or after July 1, 2021, 1135
the commissioner shall deposit into the municipal revenue sharing 1136
account established pursuant to section 4-66l seven and nine-tenths per 1137
cent of the amounts received by the state from the tax imposed under 1138
subparagraph (A) of this subdivision; and 1139
[(L)] (M) (i) For calendar months commencing on or after July 1, 1140
2017, the commissioner shall deposit into the Special Transportation 1141
Fund established under section 13b-68 seven and nine-tenths per cent 1142
of the amounts received by the state from the tax imposed under 1143
subparagraph (A) of this subdivision; 1144
(ii) For calendar months commencing on or after July 1, 2018, but 1145
prior to July 1, 2019, the commissioner shall deposit into the Special 1146
Transportation Fund established under section 13b-68 eight per cent of 1147
the amounts received by the state from the tax imposed under 1148
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1149
vehicle; 1150
(iii) For calendar months commencing on or after July 1, 2019, but 1151
prior to July 1, 2020, the commissioner shall deposit into the Special 1152
Transportation Fund established under section 13b-68 fifteen per cent 1153 Substitute Bill No. 877
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of the amounts received by the state from the tax imposed under 1154
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1155
vehicle; and 1156
(iv) For calendar months commencing on or after July 1, 2020, the 1157
commissioner shall deposit into the Special Transportation Fund 1158
established under section 13b-68 eighteen per cent of the amounts 1159
received by the state from the tax imposed under subparagraphs (A) 1160
and (H) of this subdivision on the sale of a motor vehicle. 1161
Sec. 16. Subdivision (1) of section 12-411 of the general statutes, as 1162
amended by section 9 of this act, is repealed and the following is 1163
substituted in lieu thereof (Effective January 1, 2020, and applicable to 1164
sales occurring on or after January 1, 2020): 1165
(1) (A) An excise tax is hereby imposed on the storage, acceptance, 1166
consumption or any other use in this state of tangible personal 1167
property purchased from any retailer for storage, acceptance, 1168
consumption or any other use in this state, the acceptance or receipt of 1169
any services constituting a sale in accordance with subdivision (2) of 1170
subsection (a) of section 12-407, purchased from any retailer for 1171
consumption or use in this state, or the storage, acceptance, 1172
consumption or any other use in this state of tangible personal 1173
property which has been manufactured, fabricated, assembled or 1174
processed from materials by a person, either within or without this 1175
state, for storage, acceptance, consumption or any other use by such 1176
person in this state, to be measured by the sales price of materials, at 1177
the rate of six and thirty-five-hundredths per cent of the sales price of 1178
such property or services, except, in lieu of said rate: [of six and thirty-1179
five-hundredths per cent;] 1180
(B) (i) At a rate of fifteen per cent of the rent paid to a hotel or 1181
lodging house for the first period not exceeding thirty consecutive 1182
calendar days; 1183
(ii) At a rate of eleven per cent of the rent paid to a bed and 1184 Substitute Bill No. 877
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breakfast establishment for the first period not exceeding thirty 1185
consecutive calendar days; 1186
(C) With respect to the storage, acceptance, consumption or use in 1187
this state of a motor vehicle purchased from any retailer for storage, 1188
acceptance, consumption or use in this state by any individual who is a 1189
member of the armed forces of the United States and is on full-time 1190
active duty in Connecticut and who is considered, under 50 App USC 1191
574, a resident of another state, or to any such individual and the 1192
spouse of such individual at a rate of four and one-half per cent of the 1193
sales price of such vehicle, provided such retailer requires and 1194
maintains a declaration by such individual, prescribed as to form by 1195
the commissioner and bearing notice to the effect that false statements 1196
made in such declaration are punishable, or other evidence, 1197
satisfactory to the commissioner, concerning the purchaser's state of 1198
residence under 50 App USC 574; 1199
(D) (i) With respect to the acceptance or receipt in this state of labor 1200
that is otherwise taxable under subparagraph (C) or (G) of subdivision 1201
(2) of subsection (a) of section 12-407 on existing vessels and repair or 1202
maintenance services on vessels occurring on and after July 1, 1999, 1203
such services shall be exempt from such tax; 1204
(ii) (I) With respect to the storage, acceptance or other use of a vessel 1205
in this state, at the rate of two and ninety-nine-hundredths per cent, 1206
except that such storage, acceptance or other use shall be exempt from 1207
such tax if such vessel is docked in this state for sixty or fewer days in 1208
a calendar year; 1209
(II) With respect to the storage, acceptance or other use of a motor 1210
for a vessel or a trailer used for transporting a vessel in this state, at the 1211
rate of two and ninety-nine-hundredths per cent; 1212
(E) (i) With respect to the acceptance or receipt in this state of 1213
computer and data processing services purchased from any retailer for 1214
consumption or use in this state occurring on or after July 1, 2001, at 1215 Substitute Bill No. 877
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the rate of one per cent of such services, and (ii) with respect to the 1216
acceptance or receipt in this state of Internet access services, on and 1217
after July 1, 2001, such services shall be exempt from such tax; 1218
(F) With respect to the acceptance or receipt in this state of patient 1219
care services purchased from any retailer for consumption or use in 1220
this state for which payment is received by the hospital on or after July 1221
1, 1999, and prior to July 1, 2001, at the rate of five and three-fourths 1222
per cent and on and after July 1, 2001, such services shall be exempt 1223
from such tax; 1224
(G) With respect to the rental or leasing of a passenger motor 1225
vehicle for a period of thirty consecutive calendar days or less, at a rate 1226
of nine and thirty-five-hundredths per cent; 1227
(H) With respect to the acceptance or receipt in this state of (i) a 1228
motor vehicle for a sales price exceeding fifty thousand dollars, at a 1229
rate of seven and three-fourths per cent on the entire sales price, (ii) 1230
jewelry, whether real or imitation, for a sales price exceeding five 1231
thousand dollars, at a rate of seven and three-fourths per cent on the 1232
entire sales price, and (iii) an article of clothing or footwear intended to 1233
be worn on or about the human body, a handbag, luggage, umbrella, 1234
wallet or watch for a sales price exceeding one thousand dollars, at a 1235
rate of seven and three-fourths per cent on the entire sales price. For 1236
purposes of this subparagraph, "motor vehicle" has the meaning 1237
provided in section 14-1, but does not include a motor vehicle subject 1238
to the provisions of subparagraph (C) of this subdivision, a motor 1239
vehicle having a gross vehicle weight rating over twelve thousand five 1240
hundred pounds, or a motor vehicle having a gross vehicle weight 1241
rating of twelve thousand five hundred pounds or less that is not used 1242
for private passenger purposes, but is designed or used to transport 1243
merchandise, freight or persons in connection with any business 1244
enterprise and issued a commercial registration or more specific type 1245
of registration by the Department of Motor Vehicles; 1246
(I) With respect to the acceptance or receipt in this state of meals, as 1247 Substitute Bill No. 877
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defined in subdivision (13) of section 12-412, sold by an eating 1248
establishment, caterer or grocery store; and spirituous, malt or vinous 1249
liquors, soft drinks, sodas or beverages such as are ordinarily 1250
dispensed at bars and soda fountains, or in connection therewith; at 1251
the rate of seven and thirty-five-hundredths per cent; 1252
[(I)] (J) (i) For calendar quarters ending on or after September 30, 1253
2019, the commissioner shall deposit into the regional planning 1254
incentive account, established pursuant to section 4-66k, six and seven-1255
tenths per cent of the amounts received by the state from the tax 1256
imposed under subparagraph (B) of this subdivision and ten and 1257
seven-tenths per cent of the amounts received by the state from the tax 1258
imposed under subparagraph (G) of this subdivision; 1259
(ii) For calendar quarters ending on or after September 30, 2018, the 1260
commissioner shall deposit into the Tourism Fund established under 1261
section 10-395b ten per cent of the amounts received by the state from 1262
the tax imposed under subparagraph (B) of this subdivision; 1263
[(J)] (K) For calendar months commencing on or after July 1, 2021, 1264
the commissioner shall deposit into said municipal revenue sharing 1265
account seven and nine-tenths per cent of the amounts received by the 1266
state from the tax imposed under subparagraph (A) of this 1267
subdivision; and 1268
[(K)] (L) (i) For calendar months commencing on or after July 1, 1269
2017, the commissioner shall deposit into said Special Transportation 1270
Fund seven and nine-tenths per cent of the amounts received by the 1271
state from the tax imposed under subparagraph (A) of this 1272
subdivision; 1273
(ii) For calendar months commencing on or after July 1, 2018, but 1274
prior to July 1, 2019, the commissioner shall deposit into the Special 1275
Transportation Fund established under section 13b-68 eight per cent of 1276
the amounts received by the state from the tax imposed under 1277
subparagraphs (A) and (H) of this subdivision on the acceptance or 1278 Substitute Bill No. 877
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receipt in this state of a motor vehicle; 1279
(iii) For calendar months commencing on or after July 1, 2019, but 1280
prior to July 1, 2020, the commissioner shall deposit into the Special 1281
Transportation Fund established under section 13b-68 fifteen per cent 1282
of the amounts received by the state from the tax imposed under 1283
subparagraphs (A) and (H) of this subdivision on the acceptance or 1284
receipt in this state of a motor vehicle; and 1285
(iv) For calendar months commencing on or after July 1, 2020, the 1286
commissioner shall deposit into the Special Transportation Fund 1287
established under section 13b-68 eighteen per cent of the amounts 1288
received by the state from the tax imposed under subparagraphs (A) 1289
and (H) of this subdivision on the acceptance or receipt in this state of 1290
a motor vehicle. 1291
Sec. 17. Subdivision (37) of subsection (a) of section 12-407 of the 1292
general statutes, as amended by section 13 of this act, is repealed and 1293
the following is substituted in lieu thereof (Effective January 1, 2020, and 1294
applicable to sales occurring on or after January 1, 2020): 1295
(37) "Services" for purposes of subdivision (2) of this subsection, 1296
means: 1297
(A) Computer and data processing services, including, but not 1298
limited to, time, programming, code writing, modification of existing 1299
programs, feasibility studies and installation and implementation of 1300
software programs and systems even where such services are rendered 1301
in connection with the development, creation or production of canned 1302
or custom software or the license of custom software, but excluding 1303
digital goods; 1304
(B) Credit information and reporting services; 1305
(C) Services by employment agencies and agencies providing 1306
personnel services; 1307 Substitute Bill No. 877
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(D) Private investigation, protection, patrol work, watchman and 1308
armored car services, exclusive of (i) services of off-duty police officers 1309
and off-duty firefighters, and (ii) coin and currency services provided 1310
to a financial services company by or through another financial 1311
services company. For purposes of this subparagraph, "financial 1312
services company" has the same meaning as provided under 1313
subparagraphs (A) to (H), inclusive, of subdivision (6) of subsection (a) 1314
of section 12-218b; 1315
(E) Painting and lettering services; 1316
(F) Photographic studio services; 1317
(G) Telephone answering services; 1318
(H) Stenographic services; 1319
(I) Services to industrial, commercial or income-producing real 1320
property, including, but not limited to, such services as management, 1321
electrical, plumbing, painting and ca rpentry, provided 1322
income-producing property shall not include property used 1323
exclusively for residential purposes in which the owner resides and 1324
which contains no more than three dwelling units, or a housing facility 1325
for low and moderate income families and persons owned or operated 1326
by a nonprofit housing organization, as defined in subdivision (29) of 1327
section 12-412; 1328
(J) Business analysis, management, management consulting and 1329
public relations services, excluding (i) any environmental consulting 1330
services, (ii) any training services provided by an institution of higher 1331
education licensed or accredited by the Board of Regents for Higher 1332
Education or Office of Higher Education pursuant to sections 10a-35a 1333
and 10a-34, respectively, and (iii) on and after January 1, 1994, any 1334
business analysis, management, management consulting and public 1335
relations services when such services are rendered in connection with 1336
an aircraft leased or owned by a certificated air carrier or in connection 1337
with an aircraft which has a maximum certificated take-off weight of 1338 Substitute Bill No. 877
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six thousand pounds or more; 1339
(K) Services providing "piped-in" music to business or professional 1340
establishments; 1341
(L) Flight instruction and chartering services by a certificated air 1342
carrier on an aircraft, the use of which for such purposes, but for the 1343
provisions of subdivision (4) of section 12-410 and subdivision (12) of 1344
section 12-411, would be deemed a retail sale and a taxable storage or 1345
use, respectively, of such aircraft by such carrier; 1346
(M) Motor vehicle repair services, including any type of repair, 1347
painting or replacement related to the body or any of the operating 1348
parts of a motor vehicle; 1349
(N) Motor vehicle parking, [including the provision of space, other 1350
than metered space, in a lot having thirty or more spaces,] excluding 1351
[(i)] space in a parking lot owned or leased under the terms of a lease 1352
of not less than ten years' duration and operated by an employer for 1353
the exclusive use of its employees; [, (ii) space in municipally operated 1354
railroad parking facilities in municipalities located within an area of 1355
the state designated as a severe nonattainment area for ozone under 1356
the federal Clean Air Act or space in a railroad parking facility in a 1357
municipality located within an area of the state designated as a severe 1358
nonattainment area for ozone under the federal Clean Air Act owned 1359
or operated by the state on or after April 1, 2000, (iii) space in a 1360
seasonal parking lot provided by an entity subject to the exemption set 1361
forth in subdivision (1) of section 12-412, and (iv) space in a 1362
municipally owned parking lot;] 1363
(O) Radio or television repair services; 1364
(P) Furniture reupholstering and repair services; 1365
(Q) Repair services to any electrical or electronic device, including, 1366
but not limited to, equipment used for purposes of refrigeration or 1367
air-conditioning; 1368 Substitute Bill No. 877
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(R) Lobbying or consulting services for purposes of representing the 1369
interests of a client in relation to the functions of any governmental 1370
entity or instrumentality; 1371
(S) Services of the agent of any person in relation to the sale of any 1372
item of tangible personal property for such person, exclusive of the 1373
services of a consignee selling works of art, as defined in subsection (b) 1374
of section 12-376c, or articles of clothing or footwear intended to be 1375
worn on or about the human body other than (i) any special clothing 1376
or footwear primarily designed for athletic activity or protective use 1377
and which is not normally worn except when used for the athletic 1378
activity or protective use for which it was designed, and (ii) jewelry, 1379
handbags, luggage, umbrellas, wallets, watches and similar items 1380
carried on or about the human body but not worn on the body, under 1381
consignment, exclusive of services provided by an auctioneer; 1382
(T) Locksmith services; 1383
(U) Advertising or public relations services, including layout, art 1384
direction, graphic design, mechanical preparation or production 1385
supervision, not related to the development of media advertising or 1386
cooperative direct mail advertising; 1387
(V) Landscaping and horticulture services; 1388
(W) Window cleaning services; 1389
(X) Maintenance services; 1390
(Y) Janitorial services; 1391
(Z) Exterminating services; 1392
(AA) Swimming pool cleaning and maintenance services; 1393
(BB) Miscellaneous personal services included in industry group 729 1394
in the Standard Industrial Classification Manual, United States Office 1395
of Management and Budget, 1987 edition, or industry group 532220, 1396 Substitute Bill No. 877
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812191, 812199 or 812990 of the North American Industry 1397
Classification System United States Manual, United States Office of 1398
Management and Budget (NAICS), 1997 edition, exclusive of (i) 1399
services rendered by massage therapists licensed pursuant to chapter 1400
384a, and (ii) services rendered by an electrologist licensed pursuant to 1401
chapter 388; 1402
(CC) Any repair or maintenance service to any item of tangible 1403
personal property including any contract of warranty or service related 1404
to any such item; 1405
(DD) Business analysis, management or managing consulting 1406
services rendered by a general partner, or an affiliate thereof, to a 1407
limited partnership, provided (i) the general partner, or an affiliate 1408
thereof, is compensated for the rendition of such services other than 1409
through a distributive share of partnership profits or an annual 1410
percentage of partnership capital or assets established in the limited 1411
partnership's offering statement, and (ii) the general partner, or an 1412
affiliate thereof, offers such services to others, including any other 1413
partnership. As used in this subparagraph "an affiliate of a general 1414
partner" means an entity which is directly or indirectly owned fifty per 1415
cent or more in common with a general partner; 1416
(EE) Notwithstanding the provisions of section 12-412, as amended 1417
by this act, except subdivision (87) of said section 12-412, patient care 1418
services, as defined in subdivision (29) of this subsection by a hospital, 1419
except that "sale" and "selling" does not include such patient care 1420
services for which payment is received by the hospital during the 1421
period commencing July 1, 2001, and ending June 30, 2003; 1422
(FF) Health and athletic club services, exclusive of (i) any such 1423
services provided without any additional charge which are included in 1424
any dues or initiation fees paid to any such club, which dues or fees 1425
are subject to tax under section 12-543, and (ii) any such services 1426
provided by a municipality or an organization that is described in 1427
Section 501(c) of the Internal Revenue Code of 1986, or any subsequent 1428 Substitute Bill No. 877
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corresponding internal revenue code of the United States, as amended 1429
from time to time; 1430
(GG) Motor vehicle storage services, including storage of motor 1431
homes, campers and camp trailers, other than the furnishing of space 1432
as described in subparagraph (P) of subdivision (2) of this subsection; 1433
(HH) Packing and crating services, other than those provided in 1434
connection with the sale of tangible personal property by the retailer of 1435
such property; 1436
(II) Motor vehicle towing and road services, other than motor 1437
vehicle repair services; 1438
(JJ) Intrastate transportation services provided by livery services, 1439
including limousines, community cars or vans, with a driver. Intrastate 1440
transportation services shall not include transportation by taxicab, 1441
motor bus, ambulance or ambulette, scheduled public transportation, 1442
nonemergency medical transportation provided under the Medicaid 1443
program, paratransit services provided by agreement or arrangement 1444
with the state or any political subdivision of the state, dial-a-ride 1445
services or services provided in connection with funerals; 1446
(KK) Pet grooming and pet boarding services, except if such services 1447
are provided as an integral part of professional veterinary services, 1448
and pet obedience services; 1449
(LL) Services in connection with a cosmetic medical procedure. For 1450
purposes of this subparagraph, "cosmetic medical procedure" means 1451
any medical procedure performed on an individual that is directed at 1452
improving the individual's appearance and that does not meaningfully 1453
promote the proper function of the body or prevent or treat illness or 1454
disease. "Cosmetic medical procedure" includes, but is not limited to, 1455
cosmetic surgery, hair transplants, cosmetic injections, cosmetic soft 1456
tissue fillers, dermabrasion and chemical peel, laser hair removal, laser 1457
skin resurfacing, laser treatment of leg veins and sclerotherapy. 1458
"Cosmetic medical procedure" does not include reconstructive surgery. 1459 Substitute Bill No. 877
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"Reconstructive surgery" includes any surgery performed on abnormal 1460
structures caused by or related to congenital defects, developmental 1461
abnormalities, trauma, infection, tumors or disease, including 1462
procedures to improve function or give a more normal appearance; 1463
(MM) Manicure services, pedicure services and all other nail 1464
services, regardless of where performed, including airbrushing, fills, 1465
full sets, nail sculpting, paraffin treatments and polishes; 1466
(NN) Spa services, regardless of where performed, including body 1467
waxing and wraps, peels, scrubs and facials; 1468
(OO) Car wash services, including coin-operated car washes; 1469
(PP) Prearranged rides that originate in this state, provided by 1470
transportation network companies. As used in this subparagraph, 1471
"prearranged ride" and "transportation network company" have the 1472
same meanings as provided in section 13b-116; [.] 1473
(QQ) Dry cleaning services and laundry services, excluding coin-1474
operated services; 1475
(RR) Interior design services described in industry group 54141 of 1476
the NAICS, 2017 edition, as amended from time to time. 1477
Sec. 18. Section 12-412 of the general statutes is amended by adding 1478
subdivision (124) as follows (Effective January 1, 2020, and applicable to 1479
sales occurring on or after January 1, 2020): 1480
(NEW) (124) (A) Sales of interior design services set forth in 1481
subparagraph (RR) of subdivision (37) of subsection (a) of section 12-1482
407, as amended by this act, that are purchased by a business for use 1483
by such business. 1484
(B) To qualify for such exemption, each purchaser of the services 1485
exempt pursuant to the provisions of this subdivision shall present a 1486
certificate to the retailer, in such form as the commissioner may 1487 Substitute Bill No. 877
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prescribe, certifying that the purchaser is a business and is purchasing 1488
such services for its business. The purchaser of the services shall be 1489
liable for the tax otherwise imposed if the certificate is improperly 1490
provided to the seller, and any person who wilfully delivers a 1491
certificate that is known to be fraudulent or false in any material 1492
matter to a seller shall, in addition to any other penalty provided by 1493
law, be guilty of a class D felony. 1494
Sec. 19. (NEW) (Effective July 1, 2019) (a) The Commissioner of 1495
Revenue Services shall require taxpayers required to collect the tax 1496
under chapter 219 of the general statutes to enter into an agreement 1497
with an electronic payment processing company to provide automated 1498
sales tax collection and remittance, whereby such company (1) 1499
segregates an amount equal to the sales tax, if any, for each sales 1500
transaction payment processed by such company, and (2) remits such 1501
amount automatically to the Department of Revenue Services within 1502
twenty-four hours after such sales transaction. 1503
(b) The commissioner may issue a request for proposals to evaluate 1504
companies that are eligible to provide automated sales tax collection 1505
and remittance and shall publish annually a list of such companies that 1506
are approved by the commissioner. 1507
Sec. 20. Section 12-704c of the general statutes is repealed and the 1508
following is substituted in lieu thereof (Effective from passage): 1509
(a) Any resident of this state, as defined in subdivision (1) of 1510
subsection (a) of section 12-701, subject to the tax under this chapter for 1511
any taxable year shall be entitled to a credit in determining the amount 1512
of tax liability under this chapter, for all or a portion, as permitted by 1513
this section, of the amount of property tax, as defined in this section, 1514
first becoming due and actually paid during such taxable year by such 1515
person on such person's primary residence or motor vehicle in 1516
accordance with the provisions of this section, provided in the case of a 1517
person who files a return under the federal income tax for such taxable 1518
year as an unmarried individual, a married individual filing separately 1519 Substitute Bill No. 877
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or a head of household, one motor vehicle shall be eligible for such 1520
credit and in the case of a husband and wife who file a return under 1521
federal income tax for such taxable year as married individuals filing 1522
jointly, no more than two motor vehicles shall be eligible for a credit 1523
under the provisions of this section. 1524
(b) (1) The credit allowed under this section shall not exceed (A) [for 1525
taxable years commencing on or after January 1, 2006, but prior to 1526
January 1, 2011, five hundred dollars; (B)] for taxable years 1527
commencing on or after January 1, 2011, but prior to January 1, 2016, 1528
three hundred dollars; and [(C)] (B) for taxable years commencing on 1529
or after January 1, 2016, two hundred dollars. In the case of any 1530
husband and wife who file a return under the federal income tax for 1531
such taxable year as married individuals filing a joint return, the credit 1532
allowed, in the aggregate, shall not exceed such [amounts] amount for 1533
each such taxable year. 1534
(2) Notwithstanding the provisions of subsection (a) of this section, 1535
for the taxable years commencing January 1, 2017, [and January 1, 1536
2018] to January 1, 2020, inclusive, the credit under this section shall be 1537
allowed only for a resident of this state (A) who has attained age sixty-1538
five before the close of the applicable taxable year, or (B) who files a 1539
return under the federal income tax for the applicable taxable year 1540
validly claiming one or more dependents. 1541
[(c) (1) (A) For taxable years commencing prior to January 1, 2000, in 1542
the case of any such taxpayer who files under the federal income tax 1543
for such taxable year as an unmarried individual whose Connecticut 1544
adjusted gross income exceeds fifty-two thousand five hundred 1545
dollars, the amount of the credit that exceeds one hundred dollars shall 1546
be reduced by ten per cent for each ten thousand dollars, or fraction 1547
thereof, by which the taxpayer's Connecticut adjusted gross income 1548
exceeds said amount. 1549
(B) For taxable years commencing on or after January 1, 2000, but 1550
prior to January 1, 2001, in the case of any such taxpayer who files 1551 Substitute Bill No. 877
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under the federal income tax for such taxable year as an unmarried 1552
individual whose Connecticut adjusted gross income exceeds fifty-1553
three thousand five hundred dollars, the amount of the credit that 1554
exceeds one hundred dollars shall be reduced by ten per cent for each 1555
ten thousand dollars, or fraction thereof, by which the taxpayer's 1556
Connecticut adjusted gross income exceeds said amount. 1557
(C) For taxable years commencing on or after January 1, 2001, but 1558
prior to January 1, 2004, in the case of any such taxpayer who files 1559
under the federal income tax for such taxable year as an unmarried 1560
individual whose Connecticut adjusted gross income exceeds fifty-four 1561
thousand five hundred dollars, the amount of the credit shall be 1562
reduced by ten per cent for each ten thousand dollars, or fraction 1563
thereof, by which the taxpayer's Connecticut adjusted gross income 1564
exceeds said amount. 1565
(D) For taxable years commencing on or after January 1, 2004, but 1566
prior to January 1, 2007, in the case of any such taxpayer who files 1567
under the federal income tax for such taxable year as an unmarried 1568
individual whose Connecticut adjusted gross income exceeds fifty-five 1569
thousand dollars, the amount of the credit shall be reduced by ten per 1570
cent for each ten thousand dollars, or fraction thereof, by which the 1571
taxpayer's Connecticut adjusted gross income exceeds said amount. 1572
(E) For taxable years commencing on or after January 1, 2007, but 1573
prior to January 1, 2008, in the case of any such taxpayer who files 1574
under the federal income tax for such taxable year as an unmarried 1575
individual whose Connecticut adjusted gross income exceeds fifty-five 1576
thousand five hundred dollars, the amount of the credit shall be 1577
reduced by ten per cent for each ten thousand dollars, or fraction 1578
thereof, by which the taxpayer's Connecticut adjusted gross income 1579
exceeds said amount. 1580
(F) For taxable years commencing on or after January 1, 2008, but 1581
prior to January 1, 2011, in the case of any such taxpayer who files 1582
under the federal income tax for such taxable year as an unmarried 1583 Substitute Bill No. 877
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individual whose Connecticut adjusted gross income exceeds fifty-six 1584
thousand five hundred dollars, the amount of the credit shall be 1585
reduced by ten per cent for each ten thousand dollars, or fraction 1586
thereof, by which the taxpayer's Connecticut adjusted gross income 1587
exceeds said amount.] 1588
[(G)] (c) (1) (A) For taxable years commencing on or after January 1, 1589
2011, but prior to January 1, 2013, in the case of any such taxpayer who 1590
files under the federal income tax for such taxable year as an 1591
unmarried individual whose Connecticut adjusted gross income 1592
exceeds fifty-six thousand five hundred dollars, the amount of the 1593
credit shall be reduced by fifteen per cent for each ten thousand 1594
dollars, or fraction thereof, by which the taxpayer's Connecticut 1595
adjusted gross income exceeds said amount. 1596
[(H)] (B) For taxable years commencing on or after January 1, 2013, 1597
but prior to January 1, 2014, in the case of any such taxpayer who files 1598
under the federal income tax for such taxable year as an unmarried 1599
individual whose Connecticut adjusted gross income exceeds sixty 1600
thousand five hundred dollars, the amount of the credit shall be 1601
reduced by fifteen per cent for each ten thousand dollars, or fraction 1602
thereof, by which the taxpayer's Connecticut adjusted gross income 1603
exceeds said amount. 1604
[(I)] (C) For taxable years commencing on or after January 1, 2014, 1605
but prior to January 1, 2016, in the case of any such taxpayer who files 1606
under the federal income tax for such taxable year as an unmarried 1607
individual whose Connecticut adjusted gross income exceeds forty-1608
seven thousand five hundred dollars, the amount of the credit shall be 1609
reduced by fifteen per cent for each ten thousand dollars, or fraction 1610
thereof, by which the taxpayer's Connecticut adjusted gross income 1611
exceeds said amount. 1612
[(J)] (D) For taxable years commencing on or after January 1, 2016, in 1613
the case of any such taxpayer who files under the federal income tax 1614
for such taxable year as an unmarried individual whose Connecticut 1615 Substitute Bill No. 877
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adjusted gross income exceeds forty-nine thousand five hundred 1616
dollars, the amount of the credit shall be reduced by fifteen per cent for 1617
each ten thousand dollars, or fraction thereof, by which the taxpayer's 1618
Connecticut adjusted gross income exceeds said amount. 1619
(2) In the case of any such taxpayer who files under the federal 1620
income tax for such taxable year as a married individual filing 1621
separately whose Connecticut adjusted gross income exceeds thirty-1622
five thousand two hundred fifty dollars, the amount of the credit shall 1623
be reduced by fifteen per cent for each five thousand dollars, or 1624
fraction thereof, by which the taxpayer's Connecticut adjusted gross 1625
income exceeds said amount. 1626
(3) In the case of a taxpayer who files under the federal income tax 1627
for such taxable year as a head of household whose Connecticut 1628
adjusted gross income exceeds fifty-four thousand five hundred 1629
dollars, the amount of the credit shall be reduced by fifteen per cent for 1630
each ten thousand dollars or fraction thereof, by which the taxpayer's 1631
Connecticut adjusted gross income exceeds said amount. 1632
(4) In the case of a taxpayer who files under federal income tax for 1633
such taxable year as married individuals filing jointly whose 1634
Connecticut adjusted gross income exceeds seventy thousand five 1635
hundred dollars, the amount of the credit shall be reduced by fifteen 1636
per cent for each ten thousand dollars, or fraction thereof, by which the 1637
taxpayer's Connecticut adjusted gross income exceeds said amount. 1638
(d) The credit allowed under the provisions of this section shall be 1639
available for any person leasing a motor vehicle pursuant to a written 1640
agreement for a term of more than one year. Such lessee shall be 1641
entitled to the credit in accordance with the provisions of this section 1642
for the taxes actually paid by the lessor or lessee on such leased 1643
vehicle, provided the lessee was lawfully in possession of the motor 1644
vehicle at such time when the taxes first became due. The lessor shall 1645
provide the lessee with documentation establishing, to the satisfaction 1646
of the Commissioner of Revenue Services, the amount of property tax 1647 Substitute Bill No. 877
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paid during the time period in which the lessee was lawfully in 1648
possession of the motor vehicle. The lessor of the motor vehicle shall 1649
not be entitled to a credit under the provisions of this section. 1650
(e) The credit may only be used to reduce [such] a qualifying 1651
taxpayer's tax liability for the year for which such credit is applicable 1652
and shall not be used to reduce such tax liability to less than zero. 1653
(f) The amount of tax due pursuant to sections 12-705 and 12-722 1654
shall be calculated without regard to this credit. 1655
(g) For the purposes of this section: (1) "Property tax" means the 1656
amount of property tax exclusive of any interest, fees or charges 1657
thereon for which a taxpayer is liable, or in the case of any husband 1658
and wife who file a return under the federal income tax for such 1659
taxable year as married individuals filing a joint return, for which the 1660
husband or wife or both are liable, to a Connecticut political 1661
subdivision on the taxpayer's primary residence or motor vehicles; (2) 1662
"motor vehicle" means a motor vehicle, as defined in section 14-1, 1663
[which] that is privately owned or leased; and (3) property tax first 1664
becomes due, if due and payable in a single installment, on the date 1665
designated by the legislative body of the municipality as the date on 1666
which such installment shall be due and payable and, if due and 1667
payable in two or more installments, on the date designated by the 1668
legislative body of the municipality as the date on which such 1669
installment shall be due and payable or, at the election of the taxpayer, 1670
on the date designated by the legislative body of the municipality as 1671
the date on which any earlier installment of such tax shall be due and 1672
payable. 1673
Sec. 21. Section 12-498 of the general statutes is repealed and the 1674
following is substituted in lieu thereof (Effective July 1, 2019): 1675
(a) The tax imposed by section 12-494 shall not apply to: 1676
(1) Deeds which this state is prohibited from taxing under the 1677
Constitution or laws of the United States; 1678 Substitute Bill No. 877
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(2) [deeds] Deeds which secure a debt or other obligation; 1679
(3) [deeds] Deeds to which this state or any of its political 1680
subdivisions or its or their respective agencies is a party; 1681
(4) [tax] Tax deeds; 1682
(5) [deeds] Deeds of release of property which is security for a debt 1683
or other obligation; 1684
(6) [deeds] Deeds of partition; 1685
(7) [deeds] Deeds made pursuant to mergers of corporations; 1686
(8) [deeds] Deeds made by a subsidiary corporation to its parent 1687
corporation for no consideration other than the cancellation or 1688
surrender of the subsidiary's stock; 1689
(9) [deeds] Deeds made pursuant to a decree of the Superior Court 1690
under section 46b-81, 49-24 or 52-495 or pursuant to a judgment of 1691
foreclosure by market sale under section 49-24 or pursuant to a 1692
judgment of loss mitigation under section 49-30t or 49-30u; 1693
(10) [deeds] Deeds, when the consideration for the interest or 1694
property conveyed is less than two thousand dollars; 1695
(11) [deeds] Deeds between affiliated corporations, provided both of 1696
such corporations are exempt from taxation pursuant to paragraph (2), 1697
(3) or (25) of Section 501(c) of the Internal Revenue Code of 1986, or 1698
any subsequent corresponding internal revenue code of the United 1699
States, as amended from time to time; [amended;] 1700
(12) [deeds] Deeds made by a corporation which is exempt from 1701
taxation pursuant to paragraph (3) of Section 501(c) of the Internal 1702
Revenue Code of 1986, or any subsequent corresponding internal 1703
revenue code of the United States, as amended from time to time, 1704
[amended,] to any corporation which is exempt from taxation 1705
pursuant to said paragraph (3) of said Section 501(c); 1706 Substitute Bill No. 877
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(13) [deeds] Deeds made to any nonprofit organization which is 1707
organized for the purpose of holding undeveloped land in trust for 1708
conservation or recreation purposes; 1709
(14) [deeds] Deeds between spouses; 1710
(15) [deeds] Deeds of property for the Adriaen's Landing site or the 1711
stadium facility site, for purposes of the overall project, each as defined 1712
in section 32-651; 1713
(16) [land] Land transfers made on or after July 1, 1998, to a water 1714
company, as defined in section 16-1, provided the land is classified as 1715
class I or class II land, as defined in section 25-37c, after such transfer; 1716
(17) [transfers] Transfers or conveyances to effectuate a mere change 1717
of identity or form of ownership or organization, where there is no 1718
change in beneficial ownership; 1719
(18) [conveyances] Conveyances of residential property which occur 1720
not later than six months after the date on which the property was 1721
previously conveyed to the transferor if the transferor is (A) an 1722
employer which acquired the property from an employee pursuant to 1723
an employee relocation plan, or (B) an entity in the business of 1724
purchasing and selling residential property of employees who are 1725
being relocated pursuant to such a plan; 1726
(19) [deeds] Deeds in lieu of foreclosure that transfer the transferor's 1727
principal residence; [and] 1728
(20) [any] Any instrument [transferring a] that transfers the 1729
transferor's principal residence where the gross purchase price is 1730
insufficient to pay the sum of (A) mortgages encumbering the property 1731
transferred, and (B) any real property taxes and municipal utility or 1732
other charges for which the municipality may place a lien on the 1733
property and which have priority over the mortgages encumbering the 1734
property transferred; [.] and 1735 Substitute Bill No. 877
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(21) Deeds that transfer the transferor's principal residence, where 1736
such residence has a concrete foundation that has deteriorated due to 1737
the presence of pyrrhotite and such transferor has obtained a written 1738
evaluation from a professional engineer licensed pursuant to chapter 1739
391 indicating that the foundation of such residence was made with 1740
defective concrete. The exemption authorized under this subdivision 1741
shall (A) apply to the first transfer of such residence after such written 1742
evaluation has been obtained, and (B) not be available to a transferor 1743
who has received financial assistance to repair or replace such 1744
foundation from the Crumbling Foundations Assistance Fund 1745
established under section 8-441. 1746
(b) The tax imposed by subdivision (1) of subsection (a) of section 1747
12-494 shall not apply to: 1748
(1) [deeds] Deeds of the principal residence of any person approved 1749
for assistance under section 12-129b or 12-170aa for the current 1750
assessment year of the municipality in which such person resides or to 1751
any such transfer which occurs within fifteen months of the 1752
completion of any municipal assessment year for which such person 1753
qualified for such assistance; 1754
(2) [deeds] Deeds of property located in an area designated as an 1755
enterprise zone in accordance with section 32-70; and 1756
(3) [deeds] Deeds of property located in an entertainment district 1757
designated under section 32-76 or established under section 2 of public 1758
act 93-311. 1759
Sec. 22. Subsection (b) of section 12-284b of the general statutes is 1760
repealed and the following is substituted in lieu thereof (Effective from 1761
passage and applicable to taxable years commencing on or after January 1, 1762
2019): 1763
(b) Each limited liability company, limited liability partnership, 1764
limited partnership and S corporation shall be liable for the tax 1765
imposed by this section for each taxable year or portion thereof that 1766 Substitute Bill No. 877
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such company, partnership or corporation is an affected business 1767
entity. For taxable years commencing prior to January 1, 2013, each 1768
affected business entity shall annually, on or before the fifteenth day of 1769
the fourth month following the close of its taxable year, pay to the 1770
Commissioner of Revenue Services a tax in the amount of two 1771
hundred fifty dollars. For taxable years commencing on or after 1772
January 1, 2013, but prior to January 1, 2019, each affected business 1773
entity shall, on or before the fifteenth day of the fourth month 1774
following the close of every other taxable year, pay to the 1775
Commissioner of Revenue Services a tax in the amount of two 1776
hundred fifty dollars. 1777
Sec. 23. Subdivision (2) of subsection (e) of section 12-217jj of the 1778
general statutes is repealed and the following is substituted in lieu 1779
thereof (Effective from passage and applicable to taxable years commencing 1780
on or after January 1, 2019): 1781
(2) Notwithstanding the provisions of subdivision (1) of this 1782
subsection, any entity that is not subject to tax under this chapter or 1783
chapter 207 shall not be subject to the limitations on the transfer of 1784
credits provided in subparagraphs (B) and (C) of said subdivision (1), 1785
provided such entity owns not less than fifty per cent, directly or 1786
indirectly, of a business entity, [subject to tax under] as defined in 1787
section 12-284b, as amended by this act. 1788
Sec. 24. Subdivision (1) of subsection (a) of section 12-219 of the 1789
general statutes is repealed and the following is substituted in lieu 1790
thereof (Effective from passage): 1791
(a) (1) Each company subject to the provisions of this part shall pay 1792
for the privilege of carrying on or doing business within the state, the 1793
larger of the tax, if any, imposed by section 12-214, as amended by this 1794
act, and the tax calculated under this subsection. The tax calculated 1795
under this section shall be a tax of (A) three and one-tenth mills per 1796
dollar for [each income year] income years commencing prior to 1797
January 1, 2020, (B) two and six-tenths mills per dollar for the income 1798 Substitute Bill No. 877
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year commencing on or after January 1, 2020, and prior to January 1, 1799
2021, (C) two and one-tenth mills per dollar for the income year 1800
commencing on or after January 1, 2021, and prior to January 1, 2022, 1801
(D) one and one-tenth mills per dollar for the income year 1802
commencing on or after January 1, 2022, and prior to January 1, 2023, 1803
and (E) zero mills per dollar for income years commencing on or after 1804
January 1, 2023, of the amount derived [(A)] (i) by adding [(i)] (I) the 1805
average value of the issued and outstanding capital stock, including 1806
treasury stock at par or face value, fractional shares, scrip certificates 1807
convertible into shares of stock and amounts received on subscriptions 1808
to capital stock, computed on the balances at the beginning and end of 1809
the taxable year or period, the average value of surplus and undivided 1810
profit computed on the balances at the beginning and end of the 1811
taxable year or period, and [(ii)] (II) the average value of all surplus 1812
reserves computed on the balances at the beginning and end of the 1813
taxable year or period, [(B)] (ii) by subtracting from the sum so 1814
calculated [(i)] (I) the average value of any deficit carried on the 1815
balance sheet computed on the balances at the beginning and end of 1816
the taxable year or period, and [(ii)] (II) the average value of any 1817
holdings of stock of private corporations including treasury stock 1818
shown on the balance sheet computed on the balances at the beginning 1819
and end of the taxable year or period, and [(C)] (iii) by apportioning 1820
the remainder so derived between this and other states under the 1821
provisions of section 12-219a, provided in no event shall the tax so 1822
calculated exceed one million dollars or be less than two hundred fifty 1823
dollars. 1824
Sec. 25. Subdivision (8) of subsection (b) of section 12-214 of the 1825
general statutes is repealed and the following is substituted in lieu 1826
thereof (Effective from passage and applicable to income years commencing 1827
on or after January 1, 2019): 1828
(8) (A) With respect to income years commencing on or after 1829
January 1, 2018, and prior to January 1, [2019] 2021, any company 1830
subject to the tax imposed in accordance with subsection (a) of this 1831 Substitute Bill No. 877
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section shall pay, for such income year, except when the tax so 1832
calculated is equal to two hundred fifty dollars, an additional tax in an 1833
amount equal to ten per cent of the tax calculated under said 1834
subsection (a) for such income year, without reduction of the tax so 1835
calculated by the amount of any credit against such tax. The additional 1836
amount of tax determined under this subsection for any income year 1837
shall constitute a part of the tax imposed by the provisions of said 1838
subsection (a) and shall become due and be paid, collected and 1839
enforced as provided in this chapter. 1840
(B) Any company whose gross income for the income year was less 1841
than one hundred million dollars shall not be subject to the additional 1842
tax imposed under subparagraph (A) of this subdivision. This 1843
exception shall not apply to taxable members of a combined group that 1844
files a combined unitary tax return. 1845
Sec. 26. Section 12-214 of the general statutes is amended by adding 1846
subsection (d) as follows (Effective from passage): 1847
(NEW) (d) The provisions of section 12-242d shall not apply to any 1848
additional tax due as a result of the change made to subparagraph (A) 1849
of subdivision (8) of subsection (b) of this section pursuant to section 1850
25 of this act for any income year commencing prior to the effective 1851
date of section 25 of this act. 1852
Sec. 27. Subdivision (8) of subsection (b) of section 12-219 of the 1853
general statutes is repealed and the following is substituted in lieu 1854
thereof (Effective from passage and applicable to income years commencing 1855
on or after January 1, 2019): 1856
(8) (A) With respect to income years commencing on or after 1857
January 1, 2018, and prior to January 1, [2019] 2021, the additional tax 1858
imposed on any company and calculated in accordance with 1859
subsection (a) of this section shall, for such income year, except when 1860
the tax so calculated is equal to two hundred fifty dollars, be increased 1861
by adding thereto an amount equal to ten per cent of the additional tax 1862 Substitute Bill No. 877
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so calculated for such income year, without reduction of the tax so 1863
calculated by the amount of any credit against such tax. The increased 1864
amount of tax payable by any company under this section, as 1865
determined in accordance with this subsection, shall become due and 1866
be paid, collected and enforced as provided in this chapter. 1867
(B) Any company whose gross income for the income year was less 1868
than one hundred million dollars shall not be subject to the additional 1869
tax imposed under subparagraph (A) of this subdivision. This 1870
exception shall not apply to taxable members of a combined group that 1871
files a combined unitary tax return. 1872
Sec. 28. Section 12-219 of the general statutes is amended by adding 1873
subsection (f) as follows (Effective from passage): 1874
(NEW) (f) The provisions of section 12-242d shall not apply to any 1875
additional tax due as a result of the change made to subparagraph (A) 1876
of subdivision (8) of subsection (b) of this section pursuant to section 1877
27 of this act for any income year commencing prior to the effective 1878
date of section 27 of this act. 1879
Sec. 29. Subdivision (1) of subsection (k) of section 12-218e of the 1880
general statutes is repealed and the following is substituted in lieu 1881
thereof (Effective from passage, and applicable to income years commencing 1882
on or after January 1, 2019): 1883
(k) (1) In the case of a combined group whose unitary business is 1884
primarily engaged in manufacturing, in no event shall the tax 1885
calculated for a combined group on a combined unitary basis, prior to 1886
surtax and application of credits, exceed the nexus combined base tax 1887
described in subdivision (2) of this subsection by more than two 1888
million five hundred thousand dollars. 1889
Sec. 30. Subsection (a) of section 34-38n of the general statutes is 1890
repealed and the following is substituted in lieu thereof (Effective July 1891
1, 2019): 1892 Substitute Bill No. 877
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(a) The Secretary of the State shall receive, for filing any document 1893
or certificate required to be filed under sections 34-10, 34-13a, 34-13e, 1894
34-32, 34-32a, 34-32c, 34-38g and 34-38s, the following fees: (1) For 1895
reservation or cancellation of reservation of name, sixty dollars; (2) for 1896
a certificate of limited partnership and appointment of statutory agent, 1897
one hundred twenty dollars; (3) for a certificate of amendment, one 1898
hundred twenty dollars; (4) for a certificate of merger or consolidation, 1899
sixty dollars; (5) for a certificate of registration, one hundred twenty 1900
dollars; (6) for a change of agent or change of address of agent, twenty 1901
dollars; (7) for a certificate of reinstatement, one hundred twenty 1902
dollars; and (8) for an annual report, [twenty] eighty dollars. 1903
Sec. 31. Subsection (a) of section 34-243u of the general statutes is 1904
repealed and the following is substituted in lieu thereof (Effective July 1905
1, 2019): 1906
(a) Fees for filing documents and issuing certificates: (1) Filing an 1907
application to reserve a limited liability company name or to cancel a 1908
reserved limited liability company name, sixty dollars; (2) filing a 1909
transfer of reserved limited liability company name, sixty dollars; (3) 1910
filing a certificate of organization, including appointment of registered 1911
agent, one hundred twenty dollars; (4) filing a change of address of 1912
agent certificate or change of agent certificate, fifty dollars; (5) filing a 1913
notice of resignation of registered agent, fifty dollars; (6) filing an 1914
amendment to certificate of organization, one hundred twenty dollars; 1915
(7) filing a restated certificate of organization, one hundred twenty 1916
dollars; (8) filing a certificate of merger, sixty dollars; (9) filing a 1917
certificate of interest exchange, sixty dollars; (10) filing a certificate of 1918
abandonment, fifty dollars; (11) filing a certificate of reinstatement, one 1919
hundred twenty dollars; (12) filing a foreign registration certificate by a 1920
foreign limited liability company to transact business in this state, one 1921
hundred twenty dollars; (13) filing an application of foreign limited 1922
liability company for amended foreign registration certificate, one 1923
hundred twenty dollars; (14) filing a certificate of withdrawal of 1924
registration under section 34-275h, one hundred twenty dollars; (15) 1925 Substitute Bill No. 877
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filing an annual report, [twenty] eighty dollars; (16) filing an interim 1926
notice of change of manager or member, twenty dollars; (17) filing a 1927
registration of name or a renewal of registration of name, sixty dollars; 1928
(18) filing a statement of correction, one hundred dollars; and (19) 1929
filing a transfer of registration, sixty dollars plus the qualification fee. 1930
Sec. 32. Subsection (a) of section 34-413 of the general statutes is 1931
repealed and the following is substituted in lieu thereof (Effective July 1932
1, 2019): 1933
(a) Fees for filing documents and processing certificates: (1) Filing 1934
application to reserve a registered limited liability partnership name or 1935
to cancel a reserved limited liability partnership name, sixty dollars; (2) 1936
filing transfer of reserved registered limited liability partnership name, 1937
sixty dollars; (3) filing change of address of statutory agent or change 1938
of statutory agent, fifty dollars; (4) filing certificate of limited liability 1939
partnership, one hundred twenty dollars; (5) filing amendment to 1940
certificate of limited liability partnership, one hundred twenty dollars; 1941
(6) filing certificate of authority to transact business in this state, 1942
including appointment of statutory agent, one hundred twenty dollars; 1943
(7) filing amendment to certificate of authority to transact business in 1944
this state, one hundred twenty dollars; (8) filing an annual report, 1945
[twenty] eighty dollars; (9) filing statement of merger, sixty dollars; 1946
and (10) filing certificate of reinstatement, one hundred twenty dollars. 1947
Sec. 33. Section 12-704d of the general statutes is repealed and the 1948
following is substituted in lieu thereof (Effective July 1, 2019, and 1949
applicable to income and taxable years commencing on or after January 1, 1950
2019): 1951
(a) As used in this section: 1952
(1) "Angel investor" means an accredited investor, as defined by the 1953
Securities and Exchange Commission, or network of accredited 1954
investors who review new or proposed businesses for potential 1955
investment and who may seek active involvement, such as consulting 1956 Substitute Bill No. 877
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and mentoring, in a Connecticut business, but "angel investor" does 1957
not include (A) a person controlling fifty per cent or more of the 1958
Connecticut business invested in by the angel investor, (B) a venture 1959
capital company, or (C) any bank, bank and trust company, insurance 1960
company, trust company, national bank, savings association or 1961
building and loan association for activities that are a part of its normal 1962
course of business; 1963
(2) "Cash investment" means the contribution of cash, at a risk of 1964
loss, to a qualified Connecticut business in exchange for qualified 1965
securities; 1966
(3) "Connecticut business" means any business with its principal 1967
place of business in Connecticut; 1968
(4) "Bioscience" means manufacturing pharmaceuticals, medicines, 1969
medical equipment or medical devices and analytical laboratory 1970
instruments, operating medical or diagnostic testing laboratories, or 1971
conducting pure research and development in life sciences; 1972
(5) "Advanced materials" means developing, formulating or 1973
manufacturing advanced alloys, coatings, lubricants, refrigerants, 1974
surfactants, emulsifiers or substrates; 1975
(6) "Photonics" means generation, emission, transmission, 1976
modulation, signal processing, switching, amplification, detection and 1977
sensing of light from ultraviolet to infrared and the manufacture, 1978
research or development of opto-electronic devices, including, but not 1979
limited to, lasers, masers, fiber optic devices, quantum devices, 1980
holographic devices and related technologies; 1981
(7) "Information technology" means software publishing, motion 1982
picture and video production, teleproduction and postproduction 1983
services, telecommunications, data processing, hosting and related 1984
services, custom computer programming services, computer system 1985
design, computer facilities management services, other computer 1986
related services and computer training; 1987 Substitute Bill No. 877
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(8) "Clean technology" means the production, manufacture, design, 1988
research or development of clean energy, green buildings, smart grid, 1989
high-efficiency transportation vehicles and alternative fuels, 1990
environmental products, environmental remediation and pollution 1991
prevention; 1992
(9) "Qualified securities" means any form of equity, including a 1993
general or limited partnership interest, common stock, preferred stock, 1994
with or without voting rights, without regard to seniority position that 1995
must be convertible into common stock; and 1996
(10) "Emerging technology business" means any business that is 1997
engaged in bioscience, advanced materials, photonics, information 1998
technology, clean technology or any other emerging technology as 1999
determined by the Commissioner of Economic and Community 2000
Development. 2001
(b) There shall be allowed a credit against the tax imposed under 2002
this chapter, other than the liability imposed by section 12-707, for a 2003
cash investment of not less than twenty-five thousand dollars in the 2004
qualified securities of a Connecticut business by an angel investor. The 2005
credit shall be in an amount equal to twenty-five per cent of such 2006
investor's cash investment, provided the total tax credits allowed to 2007
any angel investor shall not exceed [two hundred fifty] five hundred 2008
thousand dollars. The credit shall be claimed in the taxable year in 2009
which such cash investment is made by the angel investor. The credit 2010
may be sold, assigned or otherwise transferred, in whole or in part. 2011
(c) To qualify for a tax credit pursuant to this section, a cash 2012
investment shall be in a Connecticut business that (1) has been 2013
approved as a qualified Connecticut business pursuant to subsection 2014
(d) of this section; (2) had annual gross revenues of less than one 2015
million dollars in the most recent income year of such business; (3) has 2016
fewer than twenty-five employees, not less than seventy-five per cent 2017
of whom reside in this state; (4) has been operating in this state for less 2018
than seven consecutive years; (5) is primarily owned by the 2019 Substitute Bill No. 877
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management of the business and their families; and (6) received less 2020
than two million dollars in cash investments eligible for the tax credits 2021
provided by this section. 2022
(d) (1) A Connecticut business may apply to Connecticut 2023
Innovations, Incorporated, for approval as a Connecticut business 2024
qualified to receive cash investments eligible for a tax credit pursuant 2025
to this section. The application shall include (A) the name of the 2026
business and a copy of the organizational documents of such business, 2027
(B) a business plan, including a description of the business and the 2028
management, product, market and financial plan of the business, (C) a 2029
description of the business's innovative technology, product or service, 2030
(D) a statement of the potential economic impact of the business, 2031
including the number, location and types of jobs expected to be 2032
created, (E) a description of the qualified securities to be issued and the 2033
amount of cash investment sought by the qualified Connecticut 2034
business, (F) a statement of the amount, timing and projected use of 2035
the proceeds to be raised from the proposed sale of qualified securities, 2036
and (G) such other information as the chief executive officer of 2037
Connecticut Innovations, Incorporated, may require. 2038
(2) Said chief executive officer shall, on a monthly basis, compile a 2039
list of approved applications, categorized by the cash investments 2040
being sought by the qualified Connecticut business and type of 2041
qualified securities offered. 2042
(e) (1) Any angel investor that intends to make a cash investment in 2043
a business on such list may apply to Connecticut Innovations, 2044
Incorporated, to reserve a tax credit in the amount indicated by such 2045
investor. The aggregate amount of all tax credits under this section that 2046
may be reserved by Connecticut Innovations, Incorporated, shall not 2047
exceed six million dollars annually for the fiscal years commencing 2048
July 1, 2010, to July 1, 2012, inclusive, and shall not exceed [three] five 2049
million dollars in each fiscal year thereafter. Each fiscal year, 2050
Connecticut Innovations, Incorporated, shall not reserve more than 2051
seventy-five per cent of the tax credits available under this section for 2052 Substitute Bill No. 877
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investments in emerging technology businesses, except if any credits 2053
remain available for reservation after April first in any fiscal year, such 2054
remaining credits may be reserved for investments in such businesses, 2055
and may be prioritized for veteran-owned, women-owned or minority-2056
owned businesses and businesses owned by individuals with 2057
disabilities. Connecticut Innovations, Incorporated, shall not reserve 2058
tax credits under this section for any investment made on or after July 2059
1, [2019] 2024. 2060
(2) The amount of the credit allowed to any investor pursuant to this 2061
section shall not exceed the amount of tax due from such investor 2062
under this chapter, other than section 12-707, with respect to such 2063
taxable year. Any tax credit that is claimed by the angel investor but 2064
not applied against the tax due under this chapter, other than the 2065
liability imposed under section 12-707, may be carried forward for the 2066
five immediately succeeding taxable years until the full credit has been 2067
applied. 2068
(f) If the angel investor is an S corporation or an entity treated as a 2069
partnership for federal income tax purposes, the tax credit may be 2070
claimed by the shareholders or partners of the angel investor. If the 2071
angel investor is a single member limited liability company that is 2072
disregarded as an entity separate from its owner, the tax credit may be 2073
claimed by such limited liability company's owner, provided such 2074
owner is a person subject to the tax imposed under this chapter. 2075
(g) A review of the cumulative effectiveness of the credit under this 2076
section shall be conducted by Connecticut Innovations, Incorporated, 2077
by July 1, 2014, and by July first annually thereafter. Such review shall 2078
include, but need not be limited to, the number and type of 2079
Connecticut businesses that received angel investments, the number of 2080
angel investors and the aggregate amount of cash investments, the 2081
current status of each Connecticut business that received angel 2082
investments, the number of employees employed in each year 2083
following the year in which such Connecticut business received the 2084
angel investment, and the economic impact in the state, of the 2085 Substitute Bill No. 877
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Connecticut business that received the angel investment. Such review 2086
shall be submitted to the Office of Policy and Management and to the 2087
joint standing committee of the General Assembly having cognizance 2088
of matters relating to commerce, in accordance with the provisions of 2089
section 11-4a. 2090
Sec. 34. Subsection (a) of section 12-217zz of the general statutes is 2091
repealed and the following is substituted in lieu thereof (Effective from 2092
passage and applicable to income years commencing on or after January 1, 2093
2019): 2094
(a) Notwithstanding any other provision of law, and except as 2095
otherwise provided in subsection (b) of this section and sections 12-2096
217aaa and 12-217bbb, the amount of tax credit or credits otherwise 2097
allowable against the tax imposed under this chapter shall be as 2098
follows: 2099
(1) For any income year commencing on or after January 1, 2002, 2100
and prior to January 1, 2015, the amount of tax credit or credits 2101
otherwise allowable shall not exceed seventy per cent of the amount of 2102
tax due from such taxpayer under this chapter with respect to any such 2103
income year of the taxpayer prior to the application of such credit or 2104
credits; 2105
(2) For any income year commencing on or after January 1, 2015, the 2106
amount of tax credit or credits otherwise allowable shall not exceed 2107
fifty and one one-hundredths per cent of the amount of tax due from 2108
such taxpayer under this chapter with respect to any such income year 2109
of the taxpayer prior to the application of such credit or credits; 2110
(3) Notwithstanding the provisions of subdivision (2) of this 2111
subsection, any taxpayer that possesses excess credits may utilize the 2112
excess credits as follows: 2113
(A) For income years commencing on or after January 1, 2016, and 2114
prior to January 1, 2017, the aggregate amount of tax credits and excess 2115
credits allowable shall not exceed fifty-five per cent of the amount of 2116 Substitute Bill No. 877
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tax due from such taxpayer under this chapter with respect to any such 2117
income year of the taxpayer prior to the application of such credit or 2118
credits; 2119
(B) For income years commencing on or after January 1, 2017, and 2120
prior to January 1, 2018, the aggregate amount of tax credits and excess 2121
credits allowable shall not exceed sixty per cent of the amount of tax 2122
due from such taxpayer under this chapter with respect to any such 2123
income year of the taxpayer prior to the application of such credit or 2124
credits; and 2125
(C) For income years commencing on or after January 1, 2018, and 2126
prior to January 1, 2019, the aggregate amount of tax credits and excess 2127
credits allowable shall not exceed sixty-five per cent of the amount of 2128
tax due from such taxpayer under this chapter with respect to any such 2129
income year of the taxpayer prior to the application of such credit or 2130
credits; 2131
[(D) For income years commencing on or after January 1, 2019, the 2132
aggregate amount of tax credits and excess credits allowable shall not 2133
exceed seventy per cent of the amount of tax due from such taxpayer 2134
under this chapter with respect to any such income year of the 2135
taxpayer prior to the application of such credit or credits;] 2136
(4) For purposes of this subsection, "excess credits" means any 2137
remaining credits available under section 12-217j, 12-217n or 32-9t after 2138
tax credits are utilized in accordance with subdivision (2) of this 2139
subsection. 2140
Sec. 35. (NEW) (Effective from passage and applicable to quarterly periods 2141
commencing on or after July 1, 2019) Notwithstanding any provision of 2142
the general statutes allowing for a higher amount, for any quarterly 2143
periods commencing on or after July 1, 2019, the amount of the tax 2144
credit or credits allowable against the tax imposed under chapter 212 2145
of the general statutes shall not exceed fifty and one one-hundredths 2146
per cent of the amount of tax due from a taxpayer under such chapter 2147 Substitute Bill No. 877
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with respect to any such quarterly period of the taxpayer prior to the 2148
application of such credit or credits. 2149
Sec. 36. Subsection (a) of section 12-264 of the general statutes is 2150
repealed and the following is substituted in lieu thereof (Effective July 2151
1, 2019): 2152
(a) Each (1) municipality, or department or agency thereof, or 2153
district manufacturing, selling or distributing gas to be used for light, 2154
heat or power, (2) company the principal business of which is 2155
manufacturing, selling or distributing gas or steam to be used for light, 2156
heat or power, including each foreign electric company, as defined in 2157
section 16-246f, that holds property in this state, and (3) company 2158
required to register pursuant to section 16-258a, shall pay a quarterly 2159
tax upon gross earnings from such operations in this state. Gross 2160
earnings from such operations under subdivisions (1) and (2) of this 2161
subsection shall include, as determined by the Commissioner of 2162
Revenue Services, (A) all income included in operating revenue 2163
accounts in the uniform systems of accounts prescribed by the Public 2164
Utilities Regulatory Authority for operations within the taxable 2165
quarter and, with respect to each such company, (B) all income 2166
identified in said uniform systems of accounts as income from 2167
merchandising, jobbing and contract work, (C) all revenues identified 2168
in said uniform systems of accounts as income from nonutility 2169
operations, (D) all revenues identified in said uniform systems of 2170
accounts as nonoperating retail income, and (E) receipts from the sale 2171
of residuals and other by-products obtained in connection with the 2172
production of gas, electricity or steam. Gross earnings from such 2173
operations under subdivision (3) of this subsection shall be gross 2174
income from the sales of natural gas. [, provided gross income shall not 2175
include income from the sale of natural gas to an existing combined 2176
cycle facility comprised of three gas turbines providing electric 2177
generation services, as defined in section 16-1, with a total capacity of 2178
seven hundred seventy-five megawatts, for use in the production of 2179
electricity.] Gross earnings of a gas company, as defined in section 16-2180 Substitute Bill No. 877
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1, shall not include income earned in a taxable quarter commencing 2181
prior to June 30, 2008, from the sale of natural gas or propane as a fuel 2182
for a motor vehicle. No deductions shall be allowed from such gross 2183
earnings for any commission, rebate or other payment, except a refund 2184
resulting from an error or overcharge and those specifically mentioned 2185
in section 12-265. Gross earnings of a company, as described in 2186
subdivision (2) of this subsection, shall not include income earned in 2187
any taxable quarter commencing on or after July 1, 2000, from the sale 2188
of steam. 2189
Sec. 37. Subsection (b) of section 12-326a of the general statutes is 2190
repealed and the following is substituted in lieu thereof (Effective July 2191
1, 2019): 2192
(b) In the absence of the filing with the Commissioner of Revenue 2193
Services of satisfactory proof of a lesser or higher cost of doing 2194
business, such cost shall be presumed to be (1) in the case of a 2195
stamping agent who is selling cigarettes to subjobbers and chain stores, 2196
(A) seven-eighths of one per cent of the basic cost of cigarettes to such 2197
stamping agent plus (B) the cost of cartage to such subjobbers and 2198
chain stores, if performed or paid for by such stamping agent, which, 2199
absent satisfactory proof to the contrary shall be presumed to be three-2200
fourths of one per cent of the basic cost of cigarettes to such stamping 2201
agent; [or] (2) in the case of a stamping agent who is selling cigarettes 2202
to dealers, (A) five and three-fourths per cent of the basic cost of 2203
cigarettes to such stamping agent plus (B) the cost of cartage to such 2204
dealers, if performed or paid for by such stamping agent, which, 2205
absent satisfactory proof to the contrary shall be presumed to be three-2206
fourths of one per cent of the basic cost of cigarettes to such stamping 2207
agent; (3) in the case of a subjobber who is selling cigarettes to dealers, 2208
(A) four and seven-eighths per cent of the basic cost of cigarettes to the 2209
stamping agent plus (B) the cost of cartage to such dealers, if 2210
performed or paid for by such subjobber, which, absent satisfactory 2211
proof to the contrary shall be presumed to be three-fourths of one per 2212
cent of the basic cost of cigarettes to the stamping agent; (4) in the case 2213 Substitute Bill No. 877
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of a dealer, [eight] eighteen per cent of the sum of (A) the basic cost of 2214
cigarettes to the stamping agent plus (B) the cost of doing business by 2215
the stamping agent with respect to cigarettes sold to dealers; and (5) in 2216
the case of sales at retail by a stamping agent, subjobber or chain store, 2217
the cost to the stamping agent, subjobber or chain store, as the case 2218
may be, shall be the same as the cost to the dealer. 2219
Sec. 38. (NEW) (Effective October 1, 2019, and applicable to sales 2220
occurring on or after October 1, 2019) (a) As used in this section: 2221
(1) "Electronic nicotine delivery system" has the same meaning as 2222
provided in section 19a-342a of the general statutes; 2223
(2) "Liquid nicotine container" has the same meaning as provided in 2224
section 19a-342a of the general statutes; 2225
(3) "Vapor product" has the same meaning as provided in section 2226
19a-342a of the general statutes; 2227
(4) "Electronic cigarette liquid" means a liquid that, when used in an 2228
electronic nicotine delivery system or a vapor product, produces a 2229
vapor that may or may not include nicotine and is inhaled by the user 2230
of such electronic nicotine delivery system or vapor product; 2231
(5) "Electronic cigarette products" means electronic nicotine delivery 2232
systems, liquid nicotine containers, vapor products and electronic 2233
cigarette liquids; 2234
(6) "Electronic cigarette wholesaler" means (A) any person engaged 2235
in the business of selling electronic cigarette products at wholesale in 2236
the state, (B) any person in this state who purchases electronic cigarette 2237
products at wholesale from a manufacturer, or (C) any dealer, retailer 2238
or other person that otherwise imports, or causes another person to 2239
import, untaxed electronic cigarette products into this state; 2240
(7) "Wholesale sales price" means the price of electronic cigarette 2241
products or, if no price has been set, the wholesale value of such 2242 Substitute Bill No. 877
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products; and 2243
(8) "Sale" means any transfer of title or possession or both, exchange, 2244
barter, distribution or gift, of electronic cigarette products, with or 2245
without consideration. 2246
(b) For each calendar month commencing on or after October 1, 2247
2019, a tax is imposed on all sales of electronic cigarette products made 2248
in this state by electronic cigarette wholesalers at the rate of fifty per 2249
cent of the wholesale sales price of such products, whether or not sold 2250
at wholesale, or if not sold, then at the same rate upon the use by the 2251
wholesaler. Only one sale of the same product shall be used in 2252
computing the amount of tax due under this subsection. 2253
(c) Each electronic cigarette wholesaler shall file with the 2254
Commissioner of Revenue Services, on or before the last day of each 2255
month, a report for the calendar month immediately preceding in such 2256
form and containing such information as the commissioner may 2257
prescribe. The return shall be accompanied by a payment of the 2258
amount of the tax shown to be due thereon. Each electronic cigarette 2259
wholesaler shall file such return electronically with the Department of 2260
Revenue Services and make such payment by electronic funds transfer 2261
in the manner provided by chapter 228g of the general statutes. 2262
(d) If any person fails to pay the amount of tax reported due on its 2263
report within the time specified under this section, there shall be 2264
imposed a penalty equal to ten per cent of such amount due and 2265
unpaid, or fifty dollars, whichever is greater. Such amount shall bear 2266
interest at the rate of one per cent per month or fraction thereof, from 2267
the due date of such tax until the date of payment. Subject to the 2268
provisions of section 12-3a of the general statutes, the commissioner 2269
may waive all or part of the penalties provided under this section 2270
when it is proven to the commissioner's satisfaction that the failure to 2271
pay any tax was due to reasonable cause and was not intentional or 2272
due to neglect. 2273 Substitute Bill No. 877
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(e) Each person, other than an electronic cigarette wholesaler, who is 2274
required, on behalf of an electronic cigarette wholesaler, to collect, 2275
truthfully account for and pay over the tax imposed on such electronic 2276
cigarette wholesaler under this section and who wilfully fails to collect, 2277
truthfully account for and pay over such tax or who wilfully attempts 2278
in any manner to evade or defeat the tax or the payment thereof, shall, 2279
in addition to other penalties provided by law, be liable for a penalty 2280
equal to the total amount of the tax evaded, or not collected, or not 2281
accounted for and paid over, including any penalty or interest 2282
attributable to such wilful failure to collect or truthfully account for 2283
and pay over such tax or such wilful attempt to evade or defeat such 2284
tax, provided such penalty shall only be imposed against such person 2285
in the event that such tax, penalty or interest cannot otherwise be 2286
collected from the electronic cigarette wholesaler. The amount of such 2287
penalty with respect to which a person may be personally liable under 2288
this section shall be collected in accordance with the provisions of 2289
section 12-555a of the general statutes and any amount so collected 2290
shall be allowed as a credit against the amount of such tax, penalty or 2291
interest due and owing from the electronic cigarette wholesaler. The 2292
dissolution of the electronic cigarette wholesaler shall not discharge 2293
any person in relation to any personal liability under this section for 2294
wilful failure to collect or truthfully account for and pay over such tax 2295
or for a wilful attempt to evade or defeat such tax prior to dissolution, 2296
except as otherwise provided in this section. For purposes of this 2297
section, "person" includes any individual, corporation, limited liability 2298
company or partnership and any officer or employe e of any 2299
corporation, including a dissolved corporation, and a member or 2300
employee of any partnership or limited liability company who, as such 2301
officer, employee or member, is under a duty to file a tax return under 2302
this section on behalf of an electronic cigarette wholesaler or to collect 2303
or truthfully account for and pay over the tax imposed under this 2304
section on behalf of an electronic cigarette wholesaler. 2305
(f) No tax credit or credits shall be allowable against the tax 2306
imposed under this section. 2307 Substitute Bill No. 877
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(g) The provisions of sections 12-550 to 12-554, inclusive, and section 2308
12-555a of the general statutes shall apply to the provisions of this 2309
section in the same manner and with the same force and effect as if the 2310
language of said sections had been incorporated in full into this section 2311
and had expressly referred to the tax under this section, except to the 2312
extent that any provision is inconsistent with a provision in this 2313
section. 2314
(h) The commissioner may adopt regulations, in accordance with 2315
the provisions of chapter 54 of the general statutes, to implement the 2316
provisions of this section. 2317
(i) At the close of each fiscal year commencing with the fiscal year 2318
ending June 30, 2020, the Comptroller is authorized to record as 2319
revenue for such fiscal year the amount of the tax imposed under the 2320
provisions of this section that is received by the commissioner not later 2321
than five business days from the last day of July immediately 2322
following the end of such fiscal year. 2323
Sec. 39. Section 12-435 of the general statutes is repealed and the 2324
following is substituted in lieu thereof (Effective July 1, 2019, and 2325
applicable to sales occurring on or after July 1, 2019): 2326
Each distributor of alcoholic beverages shall pay a tax to the state on 2327
all sales within the state of alcoholic beverages, except sales to licensed 2328
distributors, sales of alcoholic beverages [which] that, in the course of 2329
such sales, are actually transported to some point without the state and 2330
except [malt beverages which are] beer that is consumed on the 2331
premises covered by a manufacturer's permit, at the rates for the 2332
respective categories of alcoholic beverages listed below: 2333
[(a)] (1) Beer, except as provided in subdivision (2) of this section, 2334
seven dollars and [twenty] ninety-two cents for each barrel, three 2335
dollars and [sixty] ninety-six cents for each half barrel, one dollar and 2336
[eighty] ninety-eight cents for each quarter barrel and [twenty-four] 2337
twenty-six cents per wine gallon or fraction thereof on quantities less 2338 Substitute Bill No. 877
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than a quarter barrel; 2339
(2) Beer sold on the premises covered by a manufacturer's permit for 2340
off-premises consumption, three dollars and ninety-six cents for each 2341
barrel, one dollar and ninety-eight cents for each half barrel, ninety-2342
nine cents for each quarter barrel and thirteen cents per wine gallon or 2343
fraction thereof on quantities less than a quarter barrel; 2344
[(b)] (3) Liquor, five dollars and [forty] ninety-four cents per wine 2345
gallon; 2346
[(c)] (4) Still wines containing not more than twenty-one per cent of 2347
absolute alcohol, except as provided in [subsections (g) and (h)] 2348
subdivisions (8) and (9) of this section, [seventy-two] seventy-nine 2349
cents per wine gallon; 2350
[(d)] (5) Still wines containing more than twenty-one per cent of 2351
absolute alcohol and sparkling wines, one dollar and [eighty] ninety-2352
eight cents per wine gallon; 2353
[(e)] (6) Alcohol in excess of 100 proof, five dollars and [forty] 2354
ninety-four cents per proof gallon; 2355
[(f)] (7) Liquor coolers containing not more than seven per cent of 2356
alcohol by volume, two dollars and [forty-six] seventy-one cents per 2357
wine gallon; 2358
[(g)] (8) Still wine containing not more than twenty-one per cent of 2359
absolute alcohol, produced by a person who produces not more than 2360
fifty-five thousand wine gallons of wine during the calendar year, 2361
[eighteen] twenty cents per wine gallon, provided such person 2362
presents to each distributor of alcoholic beverages described in this 2363
section a certificate, issued by the commissioner, stating that such 2364
person produces not more than fifty-five thousand wine gallons of 2365
wine during the calendar year. The commissioner is authorized to 2366
issue such certificates, prescribe the procedures for obtaining such 2367
certificates and prescribe their form; and 2368 Substitute Bill No. 877
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[(h)] (9) Cider containing not more than seven per cent of absolute 2369
alcohol shall be subject to the same rate as applies to beer, as provided 2370
in [subsection (a)] subdivision (1) of this section. 2371
Sec. 40. (Effective July 1, 2019) (a) No person, except a licensed 2372
distributor, shall, on or after July 1, 2019, sell, or after August 15, 2019, 2373
possess with intent to sell, alcoholic beverages owned by such person 2374
and held within this state on July 1, 2019, without complying with the 2375
provisions of this section. Each such person shall take an inventory of 2376
the alcoholic beverages owned by such person and held within this 2377
state at the opening of business on July 1, 2019, including therein the 2378
whole number and any fractional part of (1) barrels, half barrels, 2379
quarter barrels and wine gallons of quantities less than quarter barrels, 2380
of (A) beer, and (B) cider containing not more than seven per cent of 2381
absolute alcohol; (2) wine gallons of liquor; (3) wine gallons of still 2382
wines containing not more than twenty-one per cent of absolute 2383
alcohol; (4) wine gallons of (A) still wines containing more than 2384
twenty-one per cent of absolute alcohol, and (B) sparkling wines; (5) 2385
proof gallons of alcohol in excess of 100 proof; and (6) liquor coolers 2386
containing not more than seven per cent alcohol by volume. Not later 2387
than August 15, 2019, each such person shall file a report of such 2388
inventory with the Commissioner of Revenue Services on forms to be 2389
prescribed or furnished by said commissioner. The tax on such 2390
inventory, at the rates set forth in subsection (b) of this section, shall be 2391
due and payable on the due date of such report. 2392
(b) The tax on alcoholic beverages included in such inventory shall 2393
be at the following rates: 2394
(1) (A) Beer, and (B) cider containing not more than seven per cent 2395
of absolute alcohol, seventy-two cents for each barrel, thirty-six cents 2396
for each half barrel, eighteen cents for each quarter barrel and two 2397
cents per wine gallon or fraction thereof on quantities less than a 2398
quarter barrel; 2399
(2) Liquor, fifty-four cents per wine gallon; 2400 Substitute Bill No. 877
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(3) Still wines containing not more than twenty-one per cent of 2401
absolute alcohol, seven cents per wine gallon; 2402
(4) Still wines containing more than twenty-one per cent of absolute 2403
alcohol and sparkling wines, eighteen cents per wine gallon; 2404
(5) Alcohol in excess of 100 proof, fifty-four cents per proof gallon; 2405
(6) Liquor coolers containing not more than seven per cent alcohol 2406
by volume, twenty-five cents per wine gallon; and 2407
(7) Still wines containing not more than twenty-one per cent of 2408
absolute alcohol, produced by a person who produces not more than 2409
fifty-five thousand wine gallons of wine during the calendar year, two 2410
cents per wine gallon. 2411
(c) If any person required to file a report under this section fails to 2412
file such report on or before August 15, 2019, the commissioner shall 2413
make an estimate of the amounts of alcoholic beverages of the 2414
categories specified in subsection (b) of this section owned by such 2415
person and held within this state on July 1, 2019, based on any 2416
information in the commissioner's possession or that may come into 2417
the commissioner's possession. The provisions of chapter 220 of the 2418
general statutes pertaining to failure to file returns, examination of 2419
returns by the commissioner, the issuance of deficiency assessments or 2420
assessments where no return has been filed, the collection of tax, the 2421
imposition of penalties and the accrual of interest shall apply to the 2422
persons required to pay the tax imposed under this section as if such 2423
persons were distributors licensed under chapter 220 of the general 2424
statutes. Failure to file such report and pay the tax when due shall be 2425
sufficient reason to revoke any state license or permit issued by the 2426
Department of Revenue Services to such person. 2427
(d) The Commissioner of Consumer Protection shall cooperate with 2428
the Commissioner of Revenue Services in the enforcement of the tax 2429
imposed pursuant to this section. 2430 Substitute Bill No. 877
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Sec. 41. Section 12-541 of the general statutes is repealed and the 2431
following is substituted in lieu thereof (Effective July 1, 2019, and 2432
applicable to sales made on or after July 1, 2019): 2433
(a) [There] Except as provided in subsection (b) of this section, there 2434
is hereby imposed a tax of ten per cent of the admission charge to any 2435
place of amusement, entertainment or recreation. [, except that no] No 2436
tax shall be imposed with respect to any admission charge: 2437
(1) [when] When the admission charge is less than one dollar or, in 2438
the case of any motion picture show, when the admission charge is not 2439
more than five dollars; [,] 2440
(2) [when] When a daily admission charge is imposed [which] that 2441
entitles the patron to participate in an athletic or sporting activity; [,] 2442
(3) [to] To any event, other than events held at the stadium facility, 2443
as defined in section 32-651, if all of the proceeds from the event inure 2444
exclusively to an entity [which] that is exempt from federal income tax 2445
under the Internal Revenue Code, provided such entity actively 2446
engages in and assumes the financial risk associated with the 2447
presentation of such event; [,] 2448
(4) [to] To any event, other than events held at the stadium facility, 2449
as defined in section 32-651, [which] that, in the opinion of the 2450
commissioner, is conducted primarily to raise funds for an entity 2451
[which] that is exempt from federal income tax under the Internal 2452
Revenue Code, provided the commissioner is satisfied that the net 2453
profit [which] that inures to such entity from such event will exceed 2454
the amount of the admissions tax [which] that, but for this subdivision, 2455
would be imposed upon the person making such charge to such event; 2456
[,] 2457
(5) [other] Other than for events held at the stadium facility, as 2458
defined in section 32-651, paid by centers of service for elderly persons, 2459
as described in section 17a-310; [,] 2460 Substitute Bill No. 877
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(6) [to] To any production featuring live performances by actors or 2461
musicians presented at Gateway's Candlewood Playhouse, Ocean 2462
Beach Park or any nonprofit theater or playhouse in the state, provided 2463
such theater or playhouse possesses evidence confirming exemption 2464
from federal tax under Section 501 of the Internal Revenue Code; [,] 2465
(7) [to] To any carnival or amusement ride; [,] 2466
(8) [to] To any interscholastic athletic event held at the stadium 2467
facility, as defined in section 32-651; [,] or 2468
(9) [if] If the admission charge would have been subject to tax under 2469
the provisions of section 12-542 of the general statutes, revision of 2470
1958, revised to January 1, 1999. 2471
(b) (1) For the following venues and events, for sales occurring on or 2472
after July 1, 2019, but prior to July 1, 2020, the tax imposed under this 2473
section shall be seven and one-half per cent of the admission charge to: 2474
(A) Any event at the XL Center in Hartford; 2475
(B) Any event at the Dunkin' Donuts Park in Hartford; 2476
(C) Any athletic event presented by a member team of the Atlantic 2477
League of Professional Baseball at the New Britain Stadium; 2478
(D) Any event at the Webster Bank Arena in Bridgeport; 2479
(E) Any event at the Oakdale Theatre in Wallingford; and 2480
(F) Any event other than an interscholastic athletic event at the 2481
stadium facility, as defined in section 32-651. 2482
(2) For the venues and events specified in subdivision (1) of this 2483
subsection, for sales occurring on or after July 1, 2020, the tax imposed 2484
under this section shall be five per cent of the admission charge. 2485
(3) On and after July 1, [2000] 2001, and prior to October 1, 2019, the 2486 Substitute Bill No. 877
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tax imposed under this section on any motion picture show shall be 2487
[eight] six per cent of the admission charge and, on and after [July 1, 2488
2001] October 1, 2019, the tax imposed on any such motion picture 2489
show shall be six and thirty-five-hundredths per cent of such charge. 2490
[(b)] (c) The tax shall be imposed upon the person making such 2491
charge and reimbursement for the tax shall be collected by such person 2492
from the purchase. Such reimbursement, termed "tax", shall be paid by 2493
the purchaser to the person making the admission charge. Such tax, 2494
when added to the admission charge, shall be a debt from the 2495
purchaser to the person making the admission charge and shall be 2496
recoverable at law. The amount of tax reimbursement, when so 2497
collected, shall be deemed to be a special fund in trust for the state of 2498
Connecticut. 2499
Sec. 42. (NEW) (Effective July 1, 2019) (a) As used in this section: 2500
(1) "Single-use checkout bag" means a plastic bag with a thickness of 2501
less than four mils or a paper bag that is provided by a store to a 2502
customer at the point of sale. "Single-use checkout bag" does not 2503
include: (A) A compostable plastic bag; (B) a bag provided to contain 2504
meat, seafood, loose produce or other unwrapped food items; (C) a 2505
newspaper bag; or (D) a laundry or dry cleaning bag; 2506
(2) "Compostable plastic bag" means a plastic bag that (A) conforms 2507
to the American Society of Testing Materials (ASTM) standard D6400; 2508
(B) is certified and labeled as meeting the ASTM standard D6400 2509
standard specification by a recognized verification entity; and (C) is 2510
capable of undergoing biological decomposition in a compost site such 2511
that the material breaks down into carbon dioxide, water, inorganic 2512
compounds and biomass at a rate consistent with known compostable 2513
materials; and 2514
(3) "Store" means any retailer, as defined in section 12-407 of the 2515
general statutes, as amended by this act, that maintains a retail store 2516
within the state and sells tangible personal property directly to the 2517 Substitute Bill No. 877
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public. 2518
(b) Each store shall charge a fee of ten cents for each single-use 2519
checkout bag provided to a customer at the point of sale. The store 2520
shall indicate the number of single-use checkout bags provided and 2521
the total amount of the fee charged on any transaction receipt provided 2522
to a customer. Any fees collected pursuant to this subsection shall be 2523
excluded from gross receipts under chapter 219 of the general statutes. 2524
(c) Each store shall report all fees collected pursuant to subsection 2525
(b) of this section to the Commissioner of Revenue Services with its 2526
return due under section 12-414 of the general statutes and remit 2527
payment at the same time and in the same form and manner required 2528
under 12-414 of the general statutes. 2529
(d) Any fees due and unpaid under this section shall be subject to 2530
the penalties and interest established under section 12-419 of the 2531
general statutes and the amount of such fee, penalty or interest, due 2532
and unpaid, may be collected under the provisions of section 12-35 of 2533
the general statutes as if they were taxes due to the state. 2534
(e) The provisions of sections 12-415, 12-416 and 12-421 to 12-428, 2535
inclusive, of the general statutes shall apply to the provisions of this 2536
section in the same manner and with the same force and effect as if the 2537
language of said sections had been incorporated in full into this section 2538
and had expressly referred to the fee imposed under this section, 2539
except to the extent that any such provision is inconsistent with a 2540
provision of this section. 2541
(f) The Commissioner of Revenue Services, in consultation with the 2542
Commissioner of Energy and Environmental Protection, may adopt 2543
regulations in accordance with the provisions of chapter 54 of the 2544
general statutes, to carry out the provisions of this section. 2545
(g) At the close of each fiscal year commencing with the fiscal year 2546
ending June 30, 2020, the Comptroller is authorized to record as 2547
revenue for such fiscal year the amount of the fee imposed under the 2548 Substitute Bill No. 877
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provisions of this section that is received by the Commissioner of 2549
Revenue Services not later than five business days from the last day of 2550
July immediately following the end of such fiscal year. 2551
Sec. 43. Section 12-263q of the general statutes is repealed and the 2552
following is substituted in lieu thereof (Effective from passage): 2553
(a) (1) For each calendar quarter commencing on or after July 1, 2554
2017, each hospital shall pay a tax on the total net revenue received by 2555
such hospital for the provision of inpatient hospital services and 2556
outpatient hospital services. 2557
(A) On and after July 1, 2017, [and prior to July 1, 2019,] the rate of 2558
tax for the provision of inpatient hospital services shall be six per cent 2559
of each hospital's audited net revenue for the fiscal year, [2016] as set 2560
forth in subparagraph (C) of this subdivision, attributable to inpatient 2561
hospital services. 2562
(B) On and after July 1, 2017, [and prior to July 1, 2019,] the rate of 2563
tax for the provision of outpatient hospital services shall be nine 2564
hundred million dollars less the total tax imposed on all hospitals for 2565
the provision of inpatient hospital services, which sum shall be 2566
divided by the total audited net revenue for the fiscal year, [2016] as 2567
set forth in subparagraph (C) of this subdivision, attributable to 2568
outpatient hospital services, of all hospitals that are required to pay 2569
such tax. 2570
(C) [On and after July 1, 2019, the rate of tax for the provision of 2571
inpatient hospital services and outpatient hospital services shall be 2572
three hundred eighty-four million dollars divided by the total audited 2573
net revenue for fiscal year 2016, of all hospitals that are required to pay 2574
such tax.] For the state fiscal years commencing July 1, 2017, and July 2575
1, 2018, the fiscal year upon which the tax shall be imposed under 2576
subparagraphs (A) and (B) of this subdivision shall be fiscal year 2016. 2577
For the biennium commencing July 1, 2019, and for each biennium 2578
thereafter, the fiscal year upon which the tax shall be imposed under 2579 Substitute Bill No. 877
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subparagraphs (A) and (B) of this subdivision for each year of the 2580
biennium shall be the fiscal year occurring three years prior to the first 2581
state fiscal year of each biennium. 2582
(D) If a hospital or hospitals subject to the tax imposed under this 2583
subdivision merge, consolidate or otherwise reorganize, the surviving 2584
hospital shall assume and be liable for the total tax imposed under this 2585
subdivision on the merging, consolidating or reorganizing hospitals, 2586
including any outstanding liabilities from periods prior to such 2587
merger, consolidation or reorganization. If a hospital ceases to operate 2588
as a hospital for any reason other than a merger, consolidation or 2589
reorganization, or ceases for any reason to be subject to the tax 2590
imposed under this subdivision, the amount of tax due from each 2591
taxpayer under this subdivision shall not be recalculated to take into 2592
account such occurrence but the total amount of such tax to be 2593
collected under subparagraphs (A) and (B) of this subdivision shall be 2594
reduced by the amount of the tax liability imposed on the hospital that 2595
is no longer subject to the tax. 2596
(E) (i) If the Commissioner of Social Services determines for any 2597
fiscal year that the effective rate of tax for the tax imposed on net 2598
revenue for the provision of inpatient hospital services exceeds the rate 2599
permitted under the provisions of 42 CFR 433.68(f), as amended from 2600
time to time, the amount of tax collected that exceeds the permissible 2601
amount shall be refunded to hospitals, in proportion to the amount of 2602
net revenue for the provision of inpatient hospital services upon which 2603
the hospitals were taxed. The effective rate of tax shall be calculated by 2604
comparing the amount of tax paid by hospitals on net revenue for the 2605
provision of inpatient hospital services in a state fiscal year with the 2606
amount of net revenue received by hospitals subject to the tax for the 2607
provision of inpatient hospital services for the equivalent fiscal year. 2608
(ii) On or before July 1, 2020, and annually thereafter, each hospital 2609
subject to the tax imposed under this subdivision shall report to the 2610
Commissioner of Social Services, in the manner prescribed by and on 2611
forms provided by said commissioner, the amount of tax paid 2612 Substitute Bill No. 877
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pursuant to this subsection by such hospital and the amount of net 2613
revenue received by such hospital for the provision of inpatient 2614
hospital services, in the state fiscal year commencing two years prior to 2615
each such reporting date. Not later than ninety days after said 2616
commissioner receives completed reports from all hospitals required to 2617
submit such reports, said commissioner shall notify the Commissioner 2618
of Revenue Services of the amount of any refund due each hospital to 2619
be in compliance with 42 CFR 433.68(f), as amended from time to time. 2620
Not later than thirty days after receiving such notice, the 2621
Commissioner of Revenue Services shall notify the Comptroller of the 2622
amount of each such refund and the Comptroller shall draw an order 2623
on the Treasurer for payment of each such refund. No interest shall be 2624
added to any refund issued pursuant to this subparagraph. 2625
(2) Except as provided in subdivision (3) of this subsection, each 2626
[such] hospital subject to the tax imposed under subdivision (1) of this 2627
subsection shall be required to pay the total amount due in four 2628
quarterly payments consistent with section 12-263s, with the first 2629
quarter commencing with the first day of each state fiscal year and the 2630
last quarter ending on the last day of each state fiscal year. Hospitals 2631
shall make all payments required under this subsection in accordance 2632
with procedures established by and on forms provided by the 2633
commissioner. 2634
(3) (A) For the state fiscal year commencing July 1, 2017, each 2635
hospital required to pay tax on inpatient hospital services or outpatient 2636
hospital services shall make an estimated tax payment on December 2637
15, 2017, which estimated payment shall be equal to one hundred 2638
thirty-three per cent of the tax due under chapter 211a for the period 2639
ending June 30, 2017. If a hospital was not required to pay tax under 2640
[said] chapter 211a on either inpatient hospital services or outpatient 2641
hospital services, such hospital shall make its estimated payment 2642
based on its unaudited net patient revenue. 2643
(B) Each hospital required to pay tax pursuant to this subdivision on 2644
inpatient hospital services or outpatient hospital services shall pay the 2645 Substitute Bill No. 877
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remaining balance determined to be due in two equal payments, which 2646
shall be due on April 30, 2018, and July 31, 2018, respectively. 2647
(C) (i) For each state fiscal year commencing on or after July 1, 2017, 2648
and prior to July 1, 2019, each hospital required to pay tax on inpatient 2649
hospital services or outpatient hospital services shall calculate the 2650
amount of tax due on forms prescribed by the commissioner by 2651
multiplying the applicable rate set forth in subdivision (1) of this 2652
subsection by its audited net revenue for fiscal year 2016. [Hospitals 2653
shall make all payments required under this section in accordance with 2654
procedures established by and on forms provided by the 2655
commissioner.] 2656
(ii) For each state fiscal year commencing on or after July 1, 2019, 2657
each hospital required to pay tax on inpatient hospital services or 2658
outpatient hospital services shall calculate the amount of tax due on 2659
forms prescribed by the commissioner by multiplying the applicable 2660
rate set forth in subdivision (1) of this subsection by its audited net 2661
revenue for the fiscal year, as set forth in subparagraph (C) of 2662
subdivision (1) of this subsection. 2663
(D) The commissioner shall apply any payment made by a hospital 2664
in connection with the tax under chapter 211a for the period ending 2665
September 30, 2017, as a partial payment of such hospital's estimated 2666
tax payment due on December 15, 2017, under subparagraph (A) of 2667
this subdivision. The commissioner shall return to a hospital any credit 2668
claimed by such hospital in connection with the tax imposed under 2669
[said] chapter 211a for the period ending September 30, 2017, for 2670
assignment as provided under section 12-263s. 2671
(4) (A) [Each] (i) For each state fiscal year commencing on or after 2672
July 1, 2017, and prior to July 1, 2019, each hospital required to pay tax 2673
on inpatient hospital services or outpatient hospital services shall 2674
submit to the commissioner such information as the commissioner 2675
requires in order to calculate the audited net inpatient revenue for 2676
fiscal year 2016, the audited net outpatient revenue for fiscal year 2016 2677 Substitute Bill No. 877
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and the audited net revenue for fiscal year 2016 of all such health care 2678
providers. Such information shall be provided to the commissioner not 2679
later than January 1, 2018. The commissioner shall make additional 2680
requests for information as necessary to fully audit each hospital's net 2681
revenue. Upon completion of the commissioner's examination, the 2682
commissioner shall notify, prior to February 28, 2018, each hospital of 2683
its audited net inpatient revenue for fiscal year 2016, audited net 2684
outpatient revenue for fiscal year 2016 and audited net revenue for 2685
fiscal year 2016. 2686
(ii) For each state fiscal year commencing on or after July 1, 2019, 2687
each hospital required to pay tax on inpatient hospital services or 2688
outpatient hospital services shall submit to the commissioner 2689
biennially such information as the commissioner requires in order to 2690
calculate for the applicable fiscal year, as set forth in subparagraph (C) 2691
of subdivision (1) of this subsection, the audited net inpatient revenue, 2692
the audited net outpatient revenue and the audited net revenue of all 2693
such health care providers. For the state fiscal year commencing July 1, 2694
2019, such information shall be provided to the commissioner not later 2695
than June 30, 2019. For the biennium commencing July 1, 2021, and 2696
each biennium thereafter, such information shall be provided to the 2697
commissioner not later than January fifteenth of the second year of the 2698
biennium immediately preceding. The commissioner shall make 2699
additional requests for information as necessary to fully audit each 2700
hospital's net revenue. Upon completion of the commissioner's 2701
examination, the commissioner shall notify each hospital of its audited 2702
net inpatient revenue, audited net outpatient revenue and audited net 2703
revenue for the applicable fiscal year, as set forth in subparagraph (C) 2704
of subdivision (1) of this subsection. 2705
(B) Any hospital that fails to provide the requested information 2706
[prior to January 1, 2018,] by the dates specified in subparagraph (A) of 2707
this subdivision or fails to comply with a request for additional 2708
information made under this subdivision shall be subject to a penalty 2709
of one thousand dollars per day for each day the hospital fails to 2710 Substitute Bill No. 877
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provide the requested information or additional information. 2711
(C) The commissioner may engage an independent auditor to assist 2712
in the performance of the commissioner's duties and responsibilities 2713
under this subdivision. 2714
(5) Net revenue derived from providing a health care item or service 2715
to a patient shall be taxed only one time under this section. 2716
(6) (A) For purposes of this section: 2717
(i) ["Audited net inpatient revenue for fiscal year 2016"] "Audited 2718
net inpatient revenue for the fiscal year" means the amount of revenue 2719
that the commissioner determines, in accordance with federal law, that 2720
a hospital received for the provision of inpatient hospital services 2721
during the [2016] applicable federal fiscal year; 2722
(ii) ["Audited net outpatient revenue for fiscal year 2016"] "Audited 2723
net outpatient revenue for the fiscal year" means the amount of 2724
revenue that the commissioner determines, in accordance with federal 2725
law, that a hospital received for the provision of outpatient hospital 2726
services during the [2016] applicable federal fiscal year; and 2727
(iii) ["Audited net revenue for fiscal year 2016"] "Audited net 2728
revenue for the fiscal year" means net revenue, as reported in each 2729
hospital's audited financial statement, less the amount of revenue that 2730
the commissioner determines, in accordance with federal law, that a 2731
hospital received from other than the provision of inpatient hospital 2732
services and outpatient hospital services. The total audited net revenue 2733
for the fiscal year [2016] shall be the sum of all audited net revenue for 2734
the applicable fiscal year [2016] for all hospitals required to pay tax on 2735
inpatient hospital services and outpatient hospital services. 2736
(B) Audited net inpatient revenue and audited net outpatient 2737
revenue shall be based on information provided by each hospital 2738
required to pay tax on inpatient hospital services or outpatient hospital 2739
services. 2740 Substitute Bill No. 877
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(b) (1) The Commissioner of Social Services shall seek approval from 2741
the Centers for Medicare and Medicaid Services to exempt from the 2742
net revenue tax imposed under subsection (a) of this section the 2743
following: (A) Specialty hospitals; (B) children's general hospitals; and 2744
(C) hospitals operated exclusively by the state other than a short-term 2745
acute hospital operated by the state as a receiver pursuant to chapter 2746
920. Any hospital for which the Centers for Medicare and Medicaid 2747
Services grants an exemption shall be exempt from the net revenue tax 2748
imposed under subsection (a) of this section. Any hospital for which 2749
the Centers for Medicare and Medicaid Services denies an exemption 2750
shall be deemed to be a hospital for purposes of this section and shall 2751
be required to pay the net revenue tax imposed under subsection (a) of 2752
this section on inpatient hospital services and outpatient hospital 2753
services. 2754
(2) Each hospital shall provide to the Commissioner of Social 2755
Services, upon request, such information as said commissioner may 2756
require to make any computations necessary to seek approval for 2757
exemption under this subsection. 2758
(3) As used in this subsection, (A) "specialty hospital" means a 2759
health care facility, as defined in section 19a-630, other than a facility 2760
licensed by the Department of Public Health as a short-term general 2761
hospital or a short-term children's hospital. "Specialty hospital" 2762
includes, but is not limited to, a psychiatric hospital or a chronic 2763
disease hospital, and (B) "children's general hospital" means a health 2764
care facility, as defined in section 19a-630, that is licensed by the 2765
Department of Public Health as a short-term children's hospital. 2766
"Children's general hospital" does not include a specialty hospital. 2767
(c) Prior to [January 1, 2018] July 1, 2019, and every three years 2768
thereafter, the Commissioner of Social Services shall seek approval 2769
from the Centers for Medicare and Medicaid Services to exempt 2770
financially distressed hospitals from the net revenue tax imposed on 2771
outpatient hospital services. Any such hospital for which the Centers 2772
for Medicare and Medicaid Services grants an exemption shall be 2773 Substitute Bill No. 877
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exempt from the net revenue tax imposed on outpatient hospital 2774
services under subsection (a) of this section. Any hospital for which the 2775
Centers for Medicare and Medicaid Services denies an exemption shall 2776
be required to pay the net revenue tax imposed on outpatient hospital 2777
services under subsection (a) of this section. For purposes of this 2778
subsection, "financially distressed hospital" means a hospital that has 2779
experienced over a five-year period an average net loss of more than 2780
five per cent of aggregate revenue. A hospital has an average net loss 2781
of more than five per cent of aggregate revenue if such a loss is 2782
reflected in the five most recent years of financial reporting that have 2783
been made available by the Health Systems Planning Unit of the Office 2784
of Health Strategy for such hospital in accordance with section 19a-670 2785
as of the effective date of the request for approval which effective date 2786
shall be July first of the year in which the request is made. 2787
(d) The commissioner shall issue guidance regarding the 2788
administration of the tax on inpatient hospital services and outpatient 2789
hospital services. Such guidance shall be issued upon completion of a 2790
study of the applicable federal law governing the administration of tax 2791
on inpatient hospital services and outpatient hospital services. The 2792
commissioner shall conduct such study in collaboration with the 2793
Commissioner of Social Services, the Secretary of the Office of Policy 2794
and Management, the Connecticut Hospital Association and the 2795
hospitals subject to the tax imposed on inpatient hospital services and 2796
outpatient hospital services. 2797
(e) (1) The commissioner shall determine, in consultation with the 2798
Commissioner of Social Services, the Secretary of the Office of Policy 2799
and Management, the Connecticut Hospital Association and the 2800
hospitals subject to the tax imposed on inpatient hospital services and 2801
outpatient hospital services, if there is any underreporting of revenue 2802
on hospitals' audited financial statements. Such consultation shall only 2803
be as authorized under section 12-15. The commissioner shall issue 2804
guidance, if necessary, to address any such underreporting. 2805
(2) If the commissioner determines, in accordance with this 2806 Substitute Bill No. 877
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subsection, that a hospital underreported net revenue on its audited 2807
financial statement, the amount of underreported net revenue shall be 2808
added to the amount of net revenue reported on such hospital's 2809
audited financial statement so as to comply with federal law and the 2810
revised net revenue amount shall be used for purposes of calculating 2811
the amount of tax owed by such hospital under this section. For 2812
purposes of this subsection, "underreported net revenue" means any 2813
revenue of a hospital subject to the tax imposed under this section that 2814
is required to be included in net revenue from the provision of 2815
inpatient hospital services and net revenue from the provision of 2816
outpatient hospital services to comply with 42 CFR 433.56, as amended 2817
from time to time, 42 CFR 433.68, as amended from time to time, and 2818
Section 1903(w) of the Social Security Act, as amended from time to 2819
time, but that was not reported on such hospital's audited financial 2820
statement. Underreported net revenue shall only include revenue of 2821
the hospital subject to such tax. 2822
(f) Nothing in this section shall affect the commissioner's obligations 2823
under section 12-15 regarding disclosure and inspection of returns and 2824
return information. 2825
(g) The provisions of section 17b-8 shall not apply to any exemption 2826
or exemptions sought by the [Department] Commissioner of Social 2827
Services from the Centers for Medicare and Medicaid Services under 2828
this section. 2829
Sec. 44. Subsection (a) of section 12-263r of the general statutes is 2830
repealed and the following is substituted in lieu thereof (Effective from 2831
passage): 2832
(a) For each calendar quarter commencing on or after July 1, 2017, 2833
there is hereby imposed a quarterly fee on each nursing home and 2834
intermediate care facility in this state, which fee shall be the product of 2835
each facility's total resident days during the calendar quarter 2836
multiplied by the user fee. Except as otherwise provided in this 2837
section, (1) the user fee for nursing homes shall be twenty-one dollars 2838 Substitute Bill No. 877
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and two cents, and (2) the user fee for intermediate care facilities shall 2839
be (A) twenty-seven dollars and twenty-six cents for calendar quarters 2840
commencing on or after July 1, 2017, and prior to July 1, 2019, and (B) 2841
twenty-seven dollars and seventy-six cents for calendar quarters 2842
commencing on or after July 1, 2019. As used in this subsection, 2843
"resident day" means nursing home resident day and intermediate care 2844
facility resident day, as applicable. 2845
Sec. 45. Section 12-571 of the general statutes is repealed and the 2846
following is substituted in lieu thereof (Effective October 1, 2019): 2847
(a) The Commissioner of Consumer Protection shall enter into 2848
negotiations with a person or business organization for the award of a 2849
contract of sale of the off-track betting system including, but not 2850
limited to, the assets and liabilities of the system and the right to 2851
operate the system. Such contract of sale shall authorize the purchaser 2852
of the system to establish and conduct a system of off-track betting on 2853
races held within or without the state pursuant to the provisions of this 2854
chapter. All proceeds derived from such sale shall be deposited as 2855
provided in section 39 of public act 93-332. Until the effective date of 2856
transfer of ownership of the off-track betting system, the commissioner 2857
shall establish and conduct systems of off-track betting on races held 2858
within or without the state pursuant to the provisions of this chapter. 2859
(b) It is hereby declared that off-track betting on races conducted 2860
under the administration or regulatory authority of the department in 2861
the manner and subject to the conditions of this chapter shall be lawful 2862
notwithstanding the provisions of any other law, general, special or 2863
municipal, including any law prohibiting or restricting lotteries, 2864
bookmaking or any other kind of gambling, it being the purpose of this 2865
chapter to derive from such betting, as authorized by this chapter, a 2866
reasonable revenue for the support of state government and to prevent 2867
and curb unlawful bookmaking and illegal betting on races. 2868
[(b)] (c) Until the effective date of transfer of ownership of the off-2869
track betting system, the commissioner shall adopt rules and 2870 Substitute Bill No. 877
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regulations, consistent with this chapter, establishing and governing 2871
the permitted method or methods of operation of the system of off-2872
track betting. 2873
(d) For the purposes of this section, the effective date of transfer of 2874
ownership of the off-track betting system was June 30, 1993. 2875
Sec. 46. (NEW) (Effective October 1, 2019) (a) For the purposes of this 2876
section, "advance deposit wager" means an off-track betting wager on 2877
racing events by means of telephone or other electronic means. Any 2878
advance deposit wager that originates or is placed from within the 2879
boundaries of the state shall be considered to be a wager made 2880
exclusively in the state. 2881
(b) (1) No person or business organization, other than the 2882
authorized operator of the off-track betting system, shall conduct off-2883
track betting in the state or accept off-track betting wagers or advance 2884
deposit wagers originating or placed from within the boundaries of the 2885
state. 2886
(2) A violation of subdivision (1) of this subsection shall be an unfair 2887
trade practice pursuant to subsection (a) of section 42-110b of the 2888
general statutes and any person or business organization that violates 2889
the provisions of said subdivision shall be further subject to the 2890
penalty for professional gambling, as provided in subsection (b) of 2891
section 53-278b of the general statutes, and for transmission of 2892
gambling information, as provided in subsection (a) of section 53-278d 2893
of the general statutes. 2894
Sec. 47. (Effective from passage) For the fiscal years ending June 30, 2895
2020, and June 30, 2021, the amount deemed appropriated pursuant to 2896
sections 3-20i and 3-115b of the general statutes in each such fiscal year 2897
shall be one dollar. 2898
Sec. 48. (Effective July 1, 2019) Not later than June 30, 2020, the 2899
Comptroller shall transfer $20,000,000 of the resources of the Special 2900
Transportation Fund for the fiscal year ending June 30, 2020, to be 2901 Substitute Bill No. 877
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accounted for as revenue of the Special Transportation Fund for the 2902
fiscal year ending June 30, 2021. 2903
Sec. 49. (Effective from passage) Not later than June 30, 2019, the 2904
Comptroller shall designate $100,000,000 of the resources of the 2905
General Fund for the fiscal year ending June 30, 2019, to be accounted 2906
for as revenue of the General Fund as follows: (1) $50,000,000 for the 2907
fiscal year ending June 30, 2020, and $50,000,000 for the fiscal year 2908
ending June 30, 2021. 2909
Sec. 50. Subdivision (1) of subsection (a) of section 12-217 of the 2910
general statutes is repealed and the following is substituted in lieu 2911
thereof (Effective from passage): 2912
(a) (1) In arriving at net income as defined in section 12-213, whether 2913
or not the taxpayer is taxable under the federal corporation net income 2914
tax, there shall be deducted from gross income, (A) all items deductible 2915
under the Internal Revenue Code effective and in force on the last day 2916
of the income year except (i) any taxes imposed under the provisions 2917
of this chapter which are paid or accrued in the income year and in the 2918
income year commencing January 1, 1989, and thereafter, any taxes in 2919
any state of the United States or any political subdivision of such state, 2920
or the District of Columbia, imposed on or measured by the income or 2921
profits of a corporation which are paid or accrued in the income year, 2922
(ii) deductions for depreciation, which shall be allowed as provided in 2923
subsection (b) of this section, (iii) deductions for qualified domestic 2924
production activities income, as provided in Section 199 of the Internal 2925
Revenue Code, and (iv) in the case of any captive real estate 2926
investment trust, the deduction for dividends paid provided under 2927
Section 857(b)(2) of the Internal Revenue Code, and (B) additionally, in 2928
the case of a regulated investment company, the sum of (i) the exempt-2929
interest dividends, as defined in the Internal Revenue Code, and (ii) 2930
expenses, bond premium, and interest related to tax-exempt income 2931
that are disallowed as deductions under the Internal Revenue Code, 2932
and (C) in the case of a taxpayer maintaining an international banking 2933
facility as defined in the laws of the United States or the regulations of 2934 Substitute Bill No. 877
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the Board of Governors of the Federal Reserve System, as either may 2935
be amended from time to time, the gross income attributable to the 2936
international banking facility, provided, no expense or loss attributable 2937
to the international banking facility shall be a deduction under any 2938
provision of this section, and (D) additionally, in the case of all 2939
taxpayers, all dividends as defined in the Internal Revenue Code 2940
effective and in force on the last day of the income year not otherwise 2941
deducted from gross income, including dividends received from a 2942
DISC or former DISC as defined in Section 992 of the Internal Revenue 2943
Code and dividends deemed to have been distributed by a DISC or 2944
former DISC as provided in Section 995 of said Internal Revenue Code, 2945
other than thirty per cent of dividends received from a domestic 2946
corporation in which the taxpayer owns less than twenty per cent of 2947
the total voting power and value of the stock of such corporation, and 2948
(E) additionally, in the case of all taxpayers, the value of any capital 2949
gain realized from the sale of any land, or interest in land, to the state, 2950
any political subdivision of the state, or to any nonprofit land 2951
conservation organization where such land is to be permanently 2952
preserved as protected open space or to a water company, as defined 2953
in section 25-32a, where such land is to be permanently preserved as 2954
protected open space or as Class I or Class II water company land, and 2955
(F) in the case of manufacturers, the amount of any contribution to a 2956
manufacturing reinvestment account established pursuant to section 2957
32-9zz in the income year that such contribution is made to the extent 2958
not deductible for federal income tax purposes, [(G) additionally, to 2959
the extent allowable under subsection (g) of section 32-776, the amount 2960
paid by a 7/7 participant, as defined in section 32-776, for the 2961
remediation of a brownfield,] and [(H)] (G) the amount of any 2962
contribution made on or after December 23, 2017, by the state of 2963
Connecticut or a political subdivision thereof to the extent included in 2964
a company's gross income under Section 118(b)(2) of the Internal 2965
Revenue Code. 2966
Sec. 51. Sections 12-704f and 32-776 of the general statutes are 2967
repealed. (Effective from passage and applicable to taxable years commencing 2968 Substitute Bill No. 877
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on or after January 1, 2019) 2969
Sec. 52. Section 16-331ii of the general statutes is repealed. (Effective 2970
July 1, 2019) 2971
Sec. 53. Subdivision (91) of section 12-412 of the general statutes is 2972
repealed. (Effective January 1, 2020) 2973
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage New section
Sec. 2 from passage and
applicable to taxable years
commencing on or after
January 1, 2019
12-701(a)(20)(B)
Sec. 3 January 1, 2020 New section
Sec. 4 from passage and
applicable to gifts made on
or after January 1, 2019
12-640
Sec. 5 from passage 12-642
Sec. 6 from passage and
applicable to estates of
decedents dying on or after
January 1, 2019
12-643(3)
Sec. 7 from passage and
applicable to estates of
decedents dying on or after
January 1, 2019
12-391(c) to (e)
Sec. 8 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-408(1)(L)
Sec. 9 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-411(1)(K)
Sec. 10 October 1, 2019, and
applicable to sales
occurring on or after
October 1, 2019
12-407(a)(13) Substitute Bill No. 877
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Sec. 11 October 1, 2019, and
applicable to sales
occurring on or after
October 1, 2019
12-407(a)
Sec. 12 October 1, 2019, and
applicable to sales
occurring on or after
October 1, 2019
12-410(5)
Sec. 13 October 1, 2019, and
applicable to sales
occurring on or after
October 1, 2019
12-407(a)(37)
Sec. 14 from passage 13b-121(b) and (c)
Sec. 15 January 1, 2020, and
applicable to sales
occurring on or after
January 1, 2020
12-408(1)
Sec. 16 January 1, 2020, and
applicable to sales
occurring on or after
January 1, 2020
12-411(1)
Sec. 17 January 1, 2020, and
applicable to sales
occurring on or after
January 1, 2020
12-407(a)(37)
Sec. 18 January 1, 2020, and
applicable to sales
occurring on or after
January 1, 2020
12-412
Sec. 19 July 1, 2019 New section
Sec. 20 from passage 12-704c
Sec. 21 July 1, 2019 12-498
Sec. 22 from passage and
applicable to taxable years
commencing on or after
January 1, 2019
12-284b(b)
Sec. 23 from passage and
applicable to taxable years
commencing on or after
January 1, 2019
12-217jj(e)(2)
Sec. 24 from passage 12-219(a)(1) Substitute Bill No. 877
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Sec. 25 from passage and
applicable to income years
commencing on or after
January 1, 2019
12-214(b)(8)
Sec. 26 from passage 12-214
Sec. 27 from passage and
applicable to income years
commencing on or after
January 1, 2019
12-219(b)(8)
Sec. 28 from passage 12-219
Sec. 29 from passage, and
applicable to income years
commencing on or after
January 1, 2019
12-218e(k)(1)
Sec. 30 July 1, 2019 34-38n(a)
Sec. 31 July 1, 2019 34-243u(a)
Sec. 32 July 1, 2019 34-413(a)
Sec. 33 July 1, 2019, and
applicable to income and
taxable years commencing
on or after January 1, 2019
12-704d
Sec. 34 from passage and
applicable to income years
commencing on or after
January 1, 2019
12-217zz(a)
Sec. 35 from passage and
applicable to quarterly
periods commencing on or
after July 1, 2019
New section
Sec. 36 July 1, 2019 12-264(a)
Sec. 37 July 1, 2019 12-326a(b)
Sec. 38 October 1, 2019, and
applicable to sales
occurring on or after
October 1, 2019
New section
Sec. 39 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-435
Sec. 40 July 1, 2019 New section Substitute Bill No. 877
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Sec. 41 July 1, 2019, and
applicable to sales made on
or after July 1, 2019
12-541
Sec. 42 July 1, 2019 New section
Sec. 43 from passage 12-263q
Sec. 44 from passage 12-263r(a)
Sec. 45 October 1, 2019 12-571
Sec. 46 October 1, 2019 New section
Sec. 47 from passage New section
Sec. 48 July 1, 2019 New section
Sec. 49 from passage New section
Sec. 50 from passage 12-217(a)(1)
Sec. 51 from passage and
applicable to taxable years
commencing on or after
January 1, 2019
Repealer section
Sec. 52 July 1, 2019 Repealer section
Sec. 53 January 1, 2020 Repealer section
FIN Joint Favorable Subst.