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General Assembly Raised Bill No. 443
February Session, 2024
LCO No. 2899
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING CERTAIN TAX APPEALS, ACCRUAL OF
INTEREST ON CERTAIN TAX UNDERPAYMENTS AND THE
BUSINESS OPERATING LOSS CARRY -OVER PERIOD.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 12-237 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2024, and 2
applicable to written protests filed prior to, on or after July 1, 2024): 3
(a) Any taxpayer aggrieved because of any order, decision, 4
determination or disallowance of the Commissioner of Revenue 5
Services under the provisions of this part may, not later than thirty days 6
after service upon the taxpayer of notice of such order, decision, 7
determination or disallowance, take an appeal therefrom to the superior 8
court for the judicial district of New Britain. [, which] If no order, 9
decision, determination or disallowance has been issued within one 10
year after a written protest was filed under the provisions of this part, 11
the taxpayer may file a written request to the commissioner that an 12
order, decision, determination or disallowance be issued and the 13
commissioner shall issue such order, decision, determination or 14 Raised Bill No. 443
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disallowance not later than fifteen days after receipt of the written 15
request. 16
(b) Any appeal to said court under subsection (a) of this section shall 17
be accompanied by a citation to the Commissioner of Revenue Services 18
to appear before said court. Such citation shall be signed by the same 19
authority, and such appeal shall be returnable at the same time and 20
served and returned in the same manner, as is required in case of a 21
summons in a civil action. The authority issuing the citation shall take 22
from the appellant a bond or recognizance to the state of Connecticut, 23
with surety to prosecute the appeal to effect and to comply with the 24
orders and decrees of the court in the premises. Such appeals shall be 25
preferred cases, to be heard, unless cause appears to the contrary, at the 26
first session, by the court or by a committee appointed by it. 27
(c) Said court may grant such relief as may be equitable and, if such 28
tax has been paid prior to the granting of such relief, may order the 29
Treasurer to pay the amount of such relief, with interest at the rate of 30
eight per cent per annum, to the aggrieved taxpayer. If the appeal has 31
been taken without probable cause, the court may tax double or triple 32
costs, as the case demands; and, upon all such appeals [which] that may 33
be denied, costs may be taxed against the appellant at the discretion of 34
the court, but no costs shall be taxed against the state. 35
Sec. 2. Section 12-422 of the general statutes is repealed and the 36
following is substituted in lieu thereof (Effective July 1, 2024, and 37
applicable to hearing applications and written protests filed prior to, on or after 38
July 1, 2024): 39
(a) Any taxpayer aggrieved because of any order, decision, 40
determination or disallowance of the Commissioner of Revenue 41
Services under section 12-418, 12-421 or 12-425 may, not later than thirty 42
days after service upon the taxpayer of notice of such order, decision, 43
determination or disallowance, take an appeal therefrom to the superior 44
court for the judicial district of New Britain. [, which] If no order, 45
decision, determination or disallowance has been issued within one 46
year after an application for a hearing or a written protest, as applicable, 47 Raised Bill No. 443
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was filed under any of said sections, the taxpayer may file a written 48
request to the commissioner that an order, decision, determination or 49
disallowance be issued and the commissioner shall issue such order, 50
decision, determination or disallowance not later than fifteen days after 51
receipt of the written request. 52
(b) Any appeal to said court under subsection (a) of this section shall 53
be accompanied by a citation to the Commissioner of Revenue Services 54
to appear before said court. Such citation shall be signed by the same 55
authority, and such appeal shall be returnable at the same time and 56
served and returned in the same manner, as is required in case of a 57
summons in a civil action. The authority issuing the citation shall take 58
from the appellant a bond or recognizance to the state of Connecticut, 59
with surety to prosecute the appeal to effect and to comply with the 60
orders and decrees of the court in the premises. Such appeals shall be 61
preferred cases, to be heard, unless cause appears to the contrary, at the 62
first session, by the court or by a committee appointed by it. 63
(c) Said court may grant such relief as may be equitable and, if such 64
tax has been paid prior to the granting of such relief, may order the 65
Treasurer to pay the amount of such relief, with interest at the rate of 66
two-thirds of one per cent per month or fraction thereof, to the 67
aggrieved taxpayer. If the appeal has been taken without probable 68
cause, the court may tax double or triple costs, as the case demands; and, 69
upon all such appeals [which] that are denied, costs may be taxed 70
against the appellant at the discretion of the court, but no costs shall be 71
taxed against the state. 72
Sec. 3. Section 12-730 of the general statutes is repealed and the 73
following is substituted in lieu thereof (Effective July 1, 2024, and 74
applicable to written protests filed prior to, on or after July 1, 2024): 75
(a) Notwithstanding the provisions of chapter 54 to the contrary, any 76
taxpayer aggrieved because of any determination or disallowance by 77
the commissioner under section 12-729, 12-729a or 12-732 may, not later 78
than thirty days after notice of the commissioner's determination or 79 Raised Bill No. 443
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disallowance is mailed to the taxpayer, take an appeal therefrom to the 80
superior court for the judicial district of New Britain. [, which] If no 81
determination or disallowance has been issued within one year after a 82
written protest was filed under any of said sections, the taxpayer may 83
file a written request to the commissioner that a determination or 84
disallowance be issued and the commissioner shall issue such 85
determination or disallowance not later than fifteen days after receipt of 86
the written request. 87
(b) Any appeal to said court under subsection (a) of this section shall 88
be accompanied by a citation to the commissioner to appear before said 89
court. Such citation shall be signed by the same authority, and such 90
appeal shall be returnable at the same time and served and returned in 91
the same manner, as is required in case of a summons in a civil action. 92
The authority issuing the citation shall take from the appellant a bond 93
or recognizance to the state of Connecticut, with surety to prosecute the 94
appeal to effect and to comply with the orders and decrees of the court 95
in the premises. Such appeals shall be preferred cases, to be heard unless 96
cause appears to the contrary, at the first session by the court or by a 97
committee appointed by it. 98
(c) Said court may grant such relief as may be equitable and, if such 99
tax has been paid prior to the granting of such relief, may order the 100
Treasurer to pay the amount of such relief, with interest at the rate of 101
two-thirds of one per cent per month or fraction thereof, to the 102
aggrieved taxpayer. If the appeal has been taken without probable 103
cause, the court may charge double or triple costs, as the case demands, 104
and upon all such appeals [which] that may be denied, costs may be 105
taxed against the appellant at the discretion of the court but no costs 106
shall be taxed against the state. 107
Sec. 4. (Effective from passage) Sections 12-204c, 12-242d, 12-699a and 108
12-722 of the general statutes shall not apply with respect to the accrual 109
of any interest, in the case of any underpayment of tax by a taxpayer 110
under chapter 208, 228z or 229 of the general statutes, to the extent such 111
underpayment was due to the filing of an amended return necessitated 112 Raised Bill No. 443
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by the guidance in Notice 2021-20, issued by the Internal Revenue 113
Service, concerning the federal employee retention credit program. If 114
such interest has already been paid to the Department of Revenue 115
Services, the Commissioner of Revenue Services shall treat such 116
payment as an overpayment and shall refund the amount of such 117
payment, without interest, to the taxpayer. 118
Sec. 5. Subdivision (4) of subsection (a) of section 12-217 of the 2024 119
supplement to the general statutes is repealed and the following is 120
substituted in lieu thereof (Effective from passage): 121
(4) Notwithstanding any provision of this section: 122
(A) Any excess of the deductions provided in this section for any 123
income year commencing on or after January 1, 1973, over the gross 124
income for such year or the amount of such excess apportioned to this 125
state under the provisions of this chapter, shall be an operating loss of 126
such income year and shall be deductible as an operating loss carry-over 127
for operating losses incurred prior to income years commencing January 128
1, 2000, in each of the five income years following such loss year; [, and] 129
for operating losses incurred in income years commencing on or after 130
January 1, 2000, and prior to January 1, 2025, in each of the twenty 131
income years following such loss year; [,] and for operating losses 132
incurred in income years commencing on or after January 1, 2025, in 133
each of the thirty income years following such loss; except that: 134
(i) For income years commencing prior to January 1, 2015, the portion 135
of such operating loss that may be deducted as an operating loss carry-136
over in any income year following such loss year shall be limited to the 137
lesser of (I) any net income greater than zero of such income year 138
following such loss year, or in the case of a company entitled to 139
apportion its net income under the provisions of this chapter, the 140
amount of such net income that is apportioned to this state pursuant 141
thereto, or (II) the excess, if any, of such operating loss over the total of 142
such net income for each of any prior income years following such loss 143
year, such net income of each of such prior income years following such 144 Raised Bill No. 443
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loss year for such purposes being computed without regard to any 145
operating loss carry-over from such loss year allowed under this 146
subparagraph and being regarded as not less than zero, and provided 147
further the operating loss of any income year shall be deducted in any 148
subsequent year, to the extent available for such deduction, before the 149
operating loss of any subsequent income year is deducted; 150
(ii) For income years commencing on or after January 1, 2015, the 151
portion of such operating loss that may be deducted as an operating loss 152
carry-over in any income year following such loss year shall be limited 153
to the lesser of (I) fifty per cent of net income of such income year 154
following such loss year, or in the case of a company entitled to 155
apportion its net income under the provisions of this chapter, fifty per 156
cent of such net income that is apportioned to this state pursuant 157
thereto, or (II) the excess, if any, of such operating loss over the 158
operating loss deductions allowable with respect to such operating loss 159
under this subparagraph for each of any prior income years following 160
such loss year, such net income of each of such prior income years 161
following such loss year for such purposes being computed without 162
regard to any operating loss carry-over from such loss year allowed 163
under this subparagraph and being regarded as not less than zero, and 164
provided further the operating loss of any income year shall be 165
deducted in any subsequent year, to the extent available for such 166
deduction, before the operating loss of any subsequent income year is 167
deducted; and 168
(iii) If a combined group so elects, the combined group shall 169
relinquish fifty per cent of its unused operating losses incurred prior to 170
the income year commencing on or after January 1, 2015, and before 171
January 1, 2016, and may utilize the remaining operating loss carry-over 172
without regard to the limitations prescribed in subparagraph (A)(ii) of 173
this subdivision. The portion of such operating loss carry-over that may 174
be deducted shall be limited to the amount required to reduce a 175
combined group's tax under this chapter, prior to surtax and prior to the 176
application of credits, to two million five hundred thousand dollars in 177
any income year commencing on or after January 1, 2015. Only after the 178 Raised Bill No. 443
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combined group's remaining operating loss carry-over for operating 179
losses incurred prior to income years commencing January 1, 2015, has 180
been fully utilized, will the limitations prescribed in subparagraph 181
(A)(ii) of this subdivision apply. The combined group, or any member 182
thereof, shall make such election on its return for the income year 183
beginning on or after January 1, 2015, and before January 1, 2016, by the 184
due date for such return, including any extensions. Only combined 185
groups with unused operating losses in excess of six billion dollars from 186
income years beginning prior to January 1, 2013, may make the election 187
prescribed in this clause; and 188
(B) Any net capital loss, as defined in the Internal Revenue Code 189
effective and in force on the last day of the income year, for any income 190
year commencing on or after January 1, 1973, shall be allowed as a 191
capital loss carry-over to reduce, but not below zero, any net capital 192
gain, as so defined, in each of the five following income years, in order 193
of sequence, to the extent not exhausted by the net capital gain of any of 194
the preceding of such five following income years; and 195
(C) Any net capital losses allowed and carried forward from prior 196
years to income years beginning on or after January 1, 1973, for federal 197
income tax purposes by companies entitled to a deduction for dividends 198
paid under the Internal Revenue Code other than companies subject to 199
the gross earnings taxes imposed under chapters 211 and 212, shall be 200
allowed as a capital loss carry-over. 201
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2024, and
applicable to written
protests filed prior to, on or
after July 1, 2024
12-237
Sec. 2 July 1, 2024, and
applicable to hearing
applications and written
protests filed prior to, on or
after July 1, 2024
12-422 Raised Bill No. 443
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Sec. 3 July 1, 2024, and
applicable to written
protests filed prior to, on or
after July 1, 2024
12-730
Sec. 4 from passage New section
Sec. 5 from passage 12-217(a)(4)
Statement of Purpose:
To (1) provide that an aggrieved taxpayer may, under certain
circumstances, file a written request that the Commissioner of Revenue
Services issue an order, decision, determination or disallowance, (2)
require that interest not accrue on tax underpayments resulting from
certain amended returns related to the employee retention credit
program, and (3) allow business operating losses incurred in income
years commencing on or after January 1, 2025, to be deductible over
thirty income years.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]