O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 23-96—SB 1027
Commerce Committee
Finance, Revenue and Bonding Committee
AN ACT CONCERNING TH E DEPARTMENT OF ECON OMIC AND
COMMUNITY DEVELOPMEN T'S RECOMMENDATIONS REGA RDING
THE JOBSCT TAX REBAT E PROGRAM AND CERTAI N AEROSPACE
MANUFACTURING PROJEC TS
SUMMARY: This act eliminates a requirement that the Department of Economic
and Community Development (DECD) commissioner enter into a contract with
businesses she approves for assistance from the JobsCT tax rebate program. It
instead requires that specified terms that were previously part of the contract (e.g.,
relating to data access by the commissioner as well as certain wage requirements)
be incorporated in other program documents.
The act also allows the DECD commissioner to amend the state’s assistance
agreement with an eligible aerospace company (authorized by PA 22-4) to allow
the company one additional year to use the tax benefits provided in the 2022 act
(i.e., in the first nine years, rather than the first eight years, of any helicopter
production contract between the company and the U.S. government, and no later
than June 30, 2033, rather than June 30, 2032). It similarly allows the company one
additional year (i.e., until June 30, 2033) to use any carryforward amounts (i.e.,
corporation business tax credits that exceed the annual maximum).
Lastly, the act makes technical changes.
EFFECTIVE DATE: Upon passage
JOBSCT
The JobsCT tax rebate program allows companies in specified industries to earn
rebates against the corporation business, pass-through entity (PE), and insurance
premiums taxes for reaching certain job creation targets. The rebate is based on (1)
the number of new full-time equivalent employees (FTEs) the business creates and
maintains, (2) these FTEs’ average wage, and (3) the state income tax that a single
filer would pay on this average wage.
Under prior law, the DECD commissioner had to enter into a contract with each
business she approved for a rebate. The contract had to at least include the
business’s consent for DECD to access data from other state agencies for audit and
enforcement purposes. Additionally, if the commissioner approved the business for
FTEs who earn less than the program’s general wage requirements (i.e.,
“discretionary FTEs”), then the contract had to include the required wage that the
business must pay them.
The act eliminates the requirement that DECD enter into a contract with the
business and makes conforming changes. Under the act, (1) a business’s submission O L R P U B L I C A C T S U M M A R Y
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of a program application serves as consent for DECD to access the data from state
agencies and (2) discretionary FTEs’ wage requirements must be set out in the
rebate allocation notice (a notice that the DECD commissioner issues an approved
business certifying its eligibility to claim the rebate if it meets the terms stated in
the notice).
AEROSPACE MANUFACTUR ING ASSISTANCE AGREEMENT
PA 22-4 authorized the DECD commissioner to enter into an assistance
agreement with an eligible aerospace company that intends to take on a qualifying
helicopter production project in Connecticut. By law, the agreement may provide
the company with up to $50 million or $75 million in total tax benefits over its term,
depending on whether it enters into federal contracts for one or two helicopter
programs, respectively. These tax benefits may allow the company to first offset its
sales and use tax liability and, if applicable, claim a corporation business tax credit,
up to specified limits, for each year from FYs 23 to 32.
Benefit Period
Under prior law, the agreement had to require that the company earn and use
the tax benefits during the first eight years of any helicopter production contract it
entered into with the U.S. government but no later than the “benefit period.” By
law, the benefit period runs from the agreement’s effective date to June 30, 2032.
The act allows the DECD commissioner to amend the agreement to allow the
company one additional year to use the tax benefits. Specifically, the amendment
may allow the company to use the tax benefits during the first nine years of a
production contract’s term but no later than one year after the end of the benefit
period (i.e., June 30, 2033). It retains the requirement that the benefits be earned in
the contract’s first eight years but no later than June 30, 2032.
Carryforwards
By law, the primary form of assistance to the company is a sales and use tax
offset. If the company is unable to use all of the offset in a given year, it may claim
the excess as a refundable corporation business tax credit of up to $5 million in a
given year. If the excess amount exceeds $5 million, the company must carry
forward the excess to future years until it is fully used.
Prior law prohibited any carryforwards from extending beyond the end of the
benefit period (i.e., June 30, 2032). The act instead allows the company to carry
forward the excess amount for one additional year (i.e., to June 30, 2033).