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General Assembly Raised Bill No. 7270
January Session, 2025
LCO No. 6964
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT CONCERNING REQUIREMENTS FOR CERTAIN TAX
APPEALS, THE DISAGGREGATION OF CERTAIN TAX SOURCING
INFORMATION, THE AMORTIZABLE BOND PREMIUM SUBTRACTION
FOR PURPOSES OF THE PERSONAL INCOME TAX AND THE
APPLICATION OF VALUATION ALLOWANCE FOR CERTAIN
COMBINED GROUP REPORTING.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2025) (a) (1) For a protest filed 1
by a taxpayer on or after October 1, 2025, under the provisions of any 2
section enumerated in subdivision (2) of this subsection, such taxpayer 3
shall file the protest on a form prescribed by the Commissioner of 4
Revenue Services that includes the following for the protest to be valid: 5
(A) The legal name of the taxpayer filing the protest and the 6
taxpayer's legal address, mailing address, phone number, federal tax 7
identification number and, if applicable, Connecticut tax registration 8
number; 9
(B) The tax type at issue, the period or periods at issue, the case 10
identification number or notice number assigned to the matter the 11
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taxpayer is contesting and the exact amount of the tax, penalty and 12
interest, as applicable, the taxpayer is contesting; 13
(C) If applicable, the name of the person to whom the taxpayer has 14
issued a power of attorney and the power of attorney's legal address, 15
mailing address, phone number and electronic mail address; 16
(D) Each issue the taxpayer wishes the commissioner to consider in 17
connection with such protest, including the amount of tax, penalty or 18
interest implicated by each issue, the factual grounds associated with 19
each issue, the documentary evidence supporting each issue and the 20
legal grounds for each issue; 21
(E) All evidence the taxpayer wishes the commissioner to consider 22
that supports the taxpayer's filing of the protest; and 23
(F) An affirmation from the taxpayer that the information contained 24
in the protest filing and any attachments thereto is true and accurate and 25
that all of the evidence the taxpayer intends to provide in support of the 26
protest has been identified and provided with the filing. 27
(2) The provisions of subdivision (1) of this subsection shall apply to 28
a protest filed under section 12-206, 12-225, 12-226 or 12-236 of the 29
general statutes, as each is amended by this act; 12-263e or 12-263m of 30
the general statutes; 12-268i, 12-311, 12-330l or 12-330ee of the general 31
statutes, as each is amended by this act; 12-330ll, 12-330mm or 12-395 of 32
the general statutes; 12-418, 12-447 or 12-461 of the general statutes, as 33
each is amended by this act; 12-477aa of the general statutes; 12-489, 12-34
493 or 12-493a of the general statutes, as each is amended by this act; 12-35
502a of the general statutes; 12-553 or 12-595 of the general statutes, as 36
each is amended by this act; 12-629, 12-649, 12-668 or 12-692 of the 37
general statutes; 12-729 or 12-790c of the general statutes, as each is 38
amended by this act; or 13b-121, 16-331cc, 22a-232, 22a-245a, 28-30f, 38a-39
277 or 51-81b of the general statutes. 40
(3) Any taxpayer that files a timely protest under any of the sections 41
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enumerated in subdivision (2) of this subsection shall have the 42
affirmative obligation to actively prosecute such protest, which 43
obligation shall include the provision of all information and 44
documentation the commissioner requires to render a determination of 45
such protest. 46
(4) For the purposes of this section, "protest" includes a request for a 47
hearing under any of the sections set forth in subdivision (2) of this 48
subsection, as applicable. 49
(b) If a taxpayer files a protest without all of the information required 50
under subdivision (1) of subsection (a) of this section, the commissioner 51
shall notify the taxpayer of the missing information. The taxpayer may 52
submit such information not later than ten business days after such 53
notification. 54
(c) If a taxpayer is unable to submit, at the time a protest is filed, all 55
of the evidence the taxpayer wishes the commissioner to consider, the 56
taxpayer may request an extension of time to submit such evidence. 57
Such extension shall not exceed three months from the date the protest 58
is due and shall be deemed granted by the commissioner if the taxpayer 59
includes such request for extension at the time the protest is filed and 60
identifies the specific evidence the taxpayer intends to submit. The 61
commissioner may refuse to consider evidence that is submitted after 62
the protest is filed or the date any extension granted under this 63
subparagraph expires, as applicable. Nothing in this subsection shall 64
prohibit the commissioner from requesting additional information or 65
documentation from the taxpayer in accordance with the provisions of 66
subsection (e) of this section. 67
(d) Notwithstanding any provision of the general statutes, if a 68
taxpayer fails to submit the information or evidence within the 69
applicable time period prescribed under subsection (b) or (c) of this 70
section, the protest shall be deemed invalid and the commissioner shall 71
not be required to consider or otherwise act on such protest. The 72
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commissioner shall dismiss any such invalid protest without 73
consideration of the merits and shall notify the taxpayer of such 74
dismissal. A taxpayer may appeal such dismissal, not later than thirty 75
days after such notification, to the superior court for the judicial district 76
of New Britain, which court's jurisdiction shall be limited to the 77
commissioner's determination that the protest was invalid. If the court 78
finds that the commissioner's determination was made in error, the 79
court shall remand the matter to the commissioner with an order to 80
consider the merits of the protest. 81
(e) (1) The commissioner may request additional information or 82
documentation from a taxpayer that has filed a protest in accordance 83
with the provisions of this section if the commissioner determines such 84
additional information or documentation is necessary for the 85
commissioner to render a determination of such protest. The 86
commissioner shall notify the taxpayer in writing of the additional 87
information or documentation required and provide at least ten 88
business days for the taxpayer to submit such additional information or 89
documentation. If the taxpayer fails to submit the requested information 90
or documentation after two written requests for the same information 91
or documentation, the taxpayer shall be deemed to have abandoned the 92
protest. The commissioner shall dismiss any such abandoned protest 93
without consideration of the merits and shall notify the taxpayer of such 94
dismissal. A taxpayer may appeal such dismissal, not later than thirty 95
days after such notification, to the superior court for the judicial district 96
of New Britain, which court's jurisdiction shall be limited to the 97
commissioner's determination that the protest was abandoned. If the 98
court finds that the commissioner's determination was made in error, 99
the court shall remand the matter to the commissioner with an order to 100
consider the merits of the protest. 101
(2) Nothing in subdivision (1) of this subsection shall be construed to 102
limit or prohibit the commissioner from making multiple requests for 103
additional information or documentation the commissioner determines 104
is necessary for the commissioner to render a determination of such 105
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protest. 106
(3) The commissioner shall notify the taxpayer upon receipt of all of 107
the additional information and documentation requested pursuant to 108
this subsection. The commissioner shall render a determination not later 109
than one hundred eighty days after such notification with respect to the 110
subject of the protest. If the commissioner fails to render a determination 111
within the prescribed timeframe, the taxpayer is authorized to file an 112
appeal with the Superior Court in accordance with the applicable 113
statutory appeals provisions. 114
(f) The commissioner may adopt regulations, in accordance with the 115
provisions of chapter 54 of the general statutes, to implement the 116
provisions of this section. Notwithstanding the requirements of sections 117
4-168 to 4-172, inclusive, of the general statutes, prior to adopting such 118
regulations, the commissioner may issue policies and procedures, which 119
shall have the force and effect of law, to implement the provisions of this 120
section. The commissioner shall, at least fifteen days prior to the 121
effective date of such policy or procedure, post any such policy or 122
procedure on the Department of Revenue's Internet web site and submit 123
such policy or procedure to the Secretary of the State for posting on the 124
eRegulations System. Any such policy or procedure shall no longer be 125
effective upon the adoption of such policy and procedure as a final 126
regulation in accordance with the provisions of chapter 54 of the general 127
statutes or forty-eight months after the effective date of this section, 128
whichever is earlier. 129
Sec. 2. Section 12-206 of the general statutes is repealed and the 130
following is substituted in lieu thereof (Effective October 1, 2025, and 131
applicable to protests filed on or after October 1, 2025): 132
(a) If any company fails to pay the amount of tax reported to be due 133
on its return within the time specified under the provisions of this 134
chapter, there shall be imposed a penalty equal to ten per cent of such 135
amount due and unpaid, or fifty dollars, whichever is greater. Such 136
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amount shall bear interest at the rate of one per cent per month or 137
fraction thereof, from the due date of such tax until the date of payment. 138
(b) If any company has not made its return within three months after 139
the time specified under the provisions of this chapter, the 140
commissioner may make such return at any time thereafter, according 141
to the best information obtainable and according to the form prescribed. 142
To the tax imposed upon the basis of such return, there shall be added 143
an amount equal to ten per cent of such tax, or fifty dollars, whichever 144
is greater. The tax shall bear interest at the rate of one per cent per month 145
or fraction thereof, from the due date of such tax until the date of 146
payment. No taxpayer shall be subject to a penalty under both 147
subsections (a) and (b) of this section in relation to the same tax period. 148
(c) Subject to the provisions of section 12-3a, the commissioner may 149
waive all or part of the penalties provided under this chapter when it is 150
proven to [his] the commissioner's satisfaction that the failure to pay any 151
tax was due to reasonable cause and was not intentional or due to 152
neglect. 153
(d) Any person required under this chapter to pay any tax, or 154
required under this chapter or by regulations adopted in accordance 155
with the provisions of section 12-204g to make a return, keep any 156
records or supply any information, who wilfully fails to pay such tax, 157
make such return, keep such records or supply such information, at the 158
time required by law or regulations, shall, in addition to any other 159
penalty provided by law, be fined not more than one thousand dollars 160
or imprisoned not more than one year or both. As used in this 161
subsection, "person" includes any officer or employee of a corporation, 162
or a member or employee of a partnership under a duty to pay such tax, 163
to make such return, keep such records or supply such information. 164
Notwithstanding the provisions of section 54-193, no person shall be 165
prosecuted for a violation of the provisions of this subsection committed 166
on or after July 1, 1997, except within three years next after such 167
violation has been committed. 168
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(e) Any person who wilfully delivers or discloses to the commissioner 169
or [his] the commissioner's authorized agent any list, return, account, 170
statement [,] or other document, known by [him] such person to be 171
fraudulent or false in any material matter, shall, in addition to any other 172
penalty provided by law, be guilty of a class D felony. No person shall 173
be charged with an offense under both subsections (d) and (e) of this 174
section in relation to the same tax period but such person may be 175
charged and prosecuted for both such offenses upon the same 176
information. 177
(f) (1) Any company subject to any tax or charge under this chapter, 178
believing that it has overpaid any tax, other than any estimated tax paid 179
pursuant to section 12-204c, due under the provisions of this chapter 180
may file a claim for refund in writing with the commissioner [within] 181
not later than three years [from] after the due date for which such 182
overpayment was made, stating the specific grounds upon which the 183
claim is founded. Failure to file a claim within the time prescribed in this 184
section constitutes a waiver of any demand against the state on account 185
of overpayment. Not later than ninety days following receipt of such 186
claim for refund, the commissioner shall determine whether such claim 187
is valid and, if so determined, said commissioner shall notify the State 188
Comptroller of the amount of such refund and the State Comptroller 189
shall draw an order on the State Treasurer in the amount thereof for 190
payment to the taxpayer. If the commissioner determines that such 191
claim is not valid, either in whole or in part, [he] the commissioner shall 192
mail notice of the proposed disallowance in whole or in part of the claim 193
to the claimant, which notice shall set forth briefly the commissioner's 194
findings of fact and the basis of disallowance in each case decided in 195
whole or in part adversely to the claimant. Sixty days after the date on 196
which it is mailed, a notice of proposed disallowance shall constitute a 197
final disallowance except only for such amounts as to which the 198
company has filed, as provided in subdivision (2) of this subsection, a 199
written protest with the commissioner. 200
(2) On or before the sixtieth day after the mailing of the proposed 201
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disallowance, the company may file with the commissioner a written 202
protest against the proposed disallowance in [which it sets forth the 203
grounds on which the protest is based] accordance with the provisions 204
of section 1 of this act. If a valid protest is filed, the commissioner shall 205
reconsider the proposed disallowance and, if the company has so 206
requested, may grant or deny the company or its authorized 207
representatives an oral hearing. 208
(3) The commissioner shall mail notice of [his] the commissioner's 209
determination to the company, which notice shall set forth briefly the 210
commissioner's findings of fact and the basis of decision in each case 211
decided in whole or in part adversely to the company. 212
(4) The action of the commissioner on the company's protest, other 213
than a protest deemed invalid under section 1 of this act, shall be final 214
upon the expiration of one month from the date on which [he] the 215
commissioner mails notice of his or her action to the company unless 216
within such period the company seeks judicial review of the 217
commissioner's determination pursuant to subsection (b) of section 12-218
208. 219
Sec. 3. Section 12-225 of the general statutes is repealed and the 220
following is substituted in lieu thereof (Effective October 1, 2025, and 221
applicable to protests filed on or after October 1, 2025): 222
(a) Any company [which] that, either intentionally or through error, 223
fails to include in its return items of income or invested capital or 224
[which] that claims unlawful deductions therefrom shall make a 225
supplemental return disclosing such facts within three years from the 226
due date of the return and, [within] not later than thirty days thereafter, 227
shall pay to the commissioner any tax due thereon, with interest upon 228
the amount of such additional tax at the rate of one per cent per month 229
or fraction thereof from the date when the original tax became due and 230
payable. 231
(b) (1) Any company [which] that fails to include in its return items 232
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of deductions or includes items of nontaxable income or makes any 233
other error in such return may, within three years from the due date of 234
the return, file with the commissioner an amended return, together with 235
a claim for refund of taxes overpaid as shown by such amended return. 236
Failure to file a claim within the time prescribed in this section 237
constitutes a waiver of any demand against the state on account of 238
overpayment. The commissioner shall, within one hundred eighty days 239
of the receipt of such claim, determine whether such claim is valid and, 240
if so, the commissioner shall notify the State Comptroller of the amount 241
of such refund and the State Comptroller shall draw an order on the 242
State Treasurer in the amount thereof for payment to such company. If 243
the commissioner determines that such claim is not valid, either in 244
whole or in part, [he] the commissioner shall mail notice of the proposed 245
disallowance in whole or in part of the claim to the company, which 246
notice shall set forth briefly the commissioner's findings of fact and the 247
basis of disallowance in each case decided in whole or in part adversely 248
to the claimant. Sixty days after the date on which it is mailed, a notice 249
of proposed disallowance shall constitute a final disallowance except 250
only for such amount as to which the company has filed, as provided in 251
subdivision (2) of this subsection, a written protest with the 252
commissioner. For the purposes of computing any refund due or 253
adjusting net income as a result of the inclusion of income, the taxation 254
of which by the state of Connecticut is prohibited by federal law, 255
including the Constitution of the United States, as applied, no expenses 256
related to such income shall be deducted in computing net income 257
under this chapter. 258
(2) On or before the sixtieth day after the mailing of the proposed 259
disallowance, the company may file with the commissioner a written 260
protest against the proposed disallowance in [which it sets forth the 261
grounds on which the protest is based] accordance with the provisions 262
of section 1 of this act. If a valid protest is filed, the commissioner shall 263
reconsider the proposed disallowance and, if the company has so 264
requested, may grant or deny the company or its authorized 265
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representatives an oral hearing. 266
(3) The commissioner shall mail notice of [his] the commissioner's 267
determination to the company, which notice shall set forth briefly the 268
commissioner's findings of fact and the basis of decision in each case 269
decided in whole or in part adversely to the company. 270
(4) The action of the commissioner on the company's protest, other 271
than a protest deemed invalid under section 1 of this act, shall be final 272
upon the expiration of one month from the date on which [he] the 273
commissioner mails notice of his or her action to the company unless 274
within such period the company seeks judicial review of the 275
commissioner's determination pursuant to section 12-237. 276
Sec. 4. Section 12-226 of the general statutes is repealed and the 277
following is substituted in lieu thereof (Effective October 1, 2025): 278
(a) (1) Any company whose income, profits or earnings are changed, 279
adjusted or corrected for any income year by any official of the United 280
States government, or any agency thereof, in any respect affecting the 281
tax imposed by this part, shall provide notice of such change, 282
adjustment or correction to the commissioner by filing, on or before the 283
date that is ninety days after the final determination of such change, 284
adjustment or correction, or as otherwise required by the commissioner, 285
an amended return under this chapter, and shall concede the accuracy 286
of such determination or state wherein it is erroneous, and thereafter 287
promptly furnish to the commissioner any information, schedules, 288
records, documents or papers relating to such change, adjustment or 289
correction as the commissioner requires. The time for filing such return 290
may be extended by the commissioner upon due cause shown. If, upon 291
examination, the commissioner finds that the company is liable for the 292
payment of an additional tax, the commissioner shall, within a 293
reasonable time from the receipt of such return, notify the company of 294
the amount of such additional tax, together with interest thereon 295
computed at the rate of one per cent per month or fraction thereof from 296
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the date when the original tax became due and payable. [Within] Not 297
later than thirty days [of the mailing of] after the date on which such 298
notice is mailed, the company shall pay to the commissioner, in cash or 299
by check, draft or money order, drawn to the order of the Commissioner 300
of Revenue Services, the amount of such additional tax and interest. If, 301
upon examination of such return and related information, the 302
commissioner finds that the company has overpaid the tax due the state 303
and has not received from or been allowed by the United States 304
government, or any agency thereof, a credit or a benefit as a deduction 305
or otherwise, for or by reason of such overpayment, the State Treasurer 306
shall pay the company, upon order of the State Comptroller, the amount 307
of such overpayment. If the commissioner determines that the 308
company's claim of overpayment is not valid, either in whole or in part, 309
the commissioner shall mail notice to the company of the proposed 310
disallowance of the claim in whole or in part, which notice shall set forth 311
briefly the commissioner's findings of fact and the basis of disallowance 312
in each case decided in whole or in part adversely to the claimant. Sixty 313
days after the date on which it is mailed, a notice of proposed 314
disallowance shall constitute a final disallowance except only for such 315
amounts as to which the company has filed a written protest with the 316
commissioner, as provided in subdivision (2) of this subsection. 317
(2) On or before the sixtieth day after the mailing of the proposed 318
disallowance, the company may file with the commissioner a written 319
protest against the proposed disallowance in [which it sets forth the 320
grounds on which the protest is based] accordance with the provisions 321
of section 1 of this act. If a valid protest is filed, the commissioner shall 322
reconsider the proposed disallowance and, if the company has so 323
requested, may grant or deny the company or its authorized 324
representatives an oral hearing. 325
(3) The commissioner shall mail notice of [his] the commissioner's 326
determination to the company, which notice shall set forth briefly the 327
commissioner's findings of fact and the basis of decision in each case 328
decided in whole or in part adversely to the company. 329
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(4) The action of the commissioner on the company's protest, other 330
than a protest deemed invalid under section 1 of this act, shall be final 331
upon the expiration of one month from the date on which [he] the 332
commissioner mails notice of his or her action to the company unless 333
within such period the company seeks judicial review of the 334
commissioner's determination pursuant to section 12-237. 335
(b) (1) Any company filing an amended return with any official of the 336
United States government, or any agency thereof, shall make an 337
amended return to the commissioner on or before the date that is ninety 338
days after the final determination is made on the amended return by 339
such federal official or agency. The commissioner shall treat any such 340
amended return reporting a tax overpayment as filed in processible 341
form, as described in subsection (c) of section 12-227, after proof of such 342
final determination on such amended federal return by such federal 343
official or agency is submitted to the commissioner. The time for filing 344
such amended return may be extended by the commissioner upon due 345
cause shown. If, upon examination, the commissioner finds that the 346
company is liable for the payment of an additional tax, the 347
commissioner shall, within a reasonable time from the receipt of such 348
amended return, notify the company of the amount of such additional 349
tax, together with interest thereon computed at the rate of one per cent 350
per month or fraction thereof from the date when the original tax 351
became due and payable. [Within] Not later than thirty days [of the 352
mailing of] after the date on which such notice is mailed, the company 353
shall pay to the commissioner, in cash or by check, draft or money order, 354
drawn to the order of the Commissioner of Revenue Services, the 355
amount of such additional tax and interest. If, upon examination of such 356
amended return and related information, the commissioner finds that 357
the company has overpaid the tax due the state and has not received 358
from or been allowed by the United States government, or any agency 359
thereof, a credit or a benefit, as a deduction or otherwise, for or by 360
reason of such overpayment, the company shall be paid by the State 361
Treasurer, upon order of the Comptroller, the amount of such 362
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overpayment. If the commissioner determines that the company's claim 363
of overpayment is not valid, either in whole or in part, the commissioner 364
shall mail notice of the proposed disallowance in whole or in part of the 365
claim to the company, which notice shall set forth briefly the 366
commissioner's findings of fact and the basis of disallowance in each 367
case decided in whole or in part adversely to the claimant. Sixty days 368
after the date on which it is mailed, a notice of proposed disallowance 369
shall constitute a final disallowance except only for such amounts as to 370
which the company has filed, as provided in subdivision (2) of this 371
subsection, a written protest with the commissioner. 372
(2) On or before the sixtieth day after the mailing of the proposed 373
disallowance, the company may file with the commissioner a written 374
protest against the proposed disallowance in [which it sets forth the 375
grounds on which the protest is based] accordance with the provisions 376
of section 1 of this act. If a valid protest is filed, the commissioner shall 377
reconsider the proposed disallowance and, if the company has so 378
requested, may grant or deny the company or its authorized 379
representatives an oral hearing. 380
(3) The commissioner shall mail notice of [his] the commissioner's 381
determination to the company, which notice shall set forth briefly the 382
commissioner's findings of fact and the basis of decision in each case 383
decided in whole or in part adversely to the company. 384
(4) The action of the commissioner on the company's protest, other 385
than a protest deemed invalid under section 1 of this act, shall be final 386
upon the expiration of one month from the date on which [he] the 387
commissioner mails notice of his or her action to the company unless 388
within such period the company seeks judicial review of the 389
commissioner's determination pursuant to section 12-237. 390
Sec. 5. Section 12-236 of the general statutes is repealed and the 391
following is substituted in lieu thereof (Effective October 1, 2025, and 392
applicable to hearing applications filed on or after October 1, 2025): 393
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Any taxpayer, aggrieved by the action of the commissioner or his 394
authorized agent in fixing the amount of any tax, penalty or interest 395
provided for by this part, may apply to the commissioner, in writing, 396
[within] not later than sixty days after the notice of such action is 397
delivered or mailed to it, for a hearing and a correction of the amount of 398
the tax, penalty or interest so fixed, [setting forth the reasons why such 399
hearing should be granted and the amount in which such tax, penalty 400
or interest should be reduced] in accordance with the provisions of 401
section 1 of this act. The commissioner shall promptly consider each 402
[such] valid application and may grant or deny the hearing requested. 403
If the hearing is denied, the applicant shall be notified thereof forthwith. 404
If it is granted, the commissioner shall notify the applicant of the time 405
and place fixed for such hearing. After such hearing the commissioner 406
may make such order in the premises as appears to [him] the 407
commissioner just and lawful and shall furnish a copy of such order to 408
the applicant. The commissioner may, by notice in writing, at any time 409
within three years after the date when any return of any taxpayer has 410
been due, order a hearing on [his] the commissioner's own initiative and 411
require the taxpayer or any other individual [whom he] who the 412
commissioner believes to be in possession of relevant information 413
concerning the taxpayer to appear before [him or his] the commissioner 414
or the commissioner's authorized agent with any specified books of 415
account, papers or other documents, for examination under oath. 416
Sec. 6. Section 12-268i of the general statutes is repealed and the 417
following is substituted in lieu thereof (Effective October 1, 2025, and 418
applicable to hearing applications filed on or after October 1, 2025): 419
Any taxpayer aggrieved by the action of the commissioner or [his] 420
the commissioner's authorized agent in fixing the amount of any tax, 421
penalty or interest provided for by chapter 210, 211 or 212 or this chapter 422
may apply to the commissioner, in writing, [within] not later than sixty 423
days after the notice of such action is delivered or mailed to it, for a 424
hearing and a correction of the amount of such tax, penalty or interest 425
so fixed, [setting forth the reasons why such hearing should be granted 426
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and the amount in which such tax, penalty or interest should be 427
reduced] in accordance with the provisions of section 1 of this act. The 428
commissioner shall promptly consider each [such] valid application and 429
may grant or deny the hearing requested. If the hearing is denied, the 430
applicant shall be notified thereof forthwith. If it is granted, the 431
commissioner shall notify the applicant of the time and place fixed for 432
such hearing. After such hearing the commissioner may make such 433
order in the premises as appears to [him] the commissioner just and 434
lawful and shall furnish a copy of such order to the applicant. The 435
commissioner may, by notice in writing, at any time within three years 436
after the date when any return of any taxpayer has been due, order a 437
hearing on [his] the commissioner's own initiative and require the 438
taxpayer or any other individual [whom he] who the commissioner 439
believes to be in possession of relevant information concerning the 440
taxpayer to appear before [him or his] the commissioner or the 441
commissioner's authorized agent with any specified books of account, 442
papers or other documents, for examination under oath. 443
Sec. 7. Section 12-311 of the general statutes is repealed and the 444
following is substituted in lieu thereof (Effective October 1, 2025, and 445
applicable to hearing applications filed on or after October 1, 2025): 446
Any person aggrieved by any action under this chapter of the 447
commissioner or the commissioner's authorized agent, for which a 448
hearing is not elsewhere provided, may apply to the commissioner for 449
a hearing, in writing, not later than sixty days after the notice of such 450
action is delivered or mailed to such person, [setting forth the reasons 451
why such hearing should be granted and the manner of relief sought] in 452
accordance with the provisions of section 1 of this act. The commissioner 453
shall promptly consider each [such] valid application and may grant or 454
deny the hearing requested. If the hearing is denied, the applicant shall 455
be notified thereof forthwith; if it is granted, the commissioner shall 456
notify the applicant of the time and place fixed for such hearing. After 457
such hearing, the commissioner may make such order in the premises 458
as appears to the commissioner just and lawful and shall furnish a copy 459
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of such order to the applicant. The commissioner may, by notice in 460
writing, at any time, order a hearing on the commissioner's own 461
initiative and require the taxpayer or any other individual whom the 462
commissioner believes to be in possession of information concerning 463
any manufacture, importation or sale of cigarettes that have escaped 464
taxation to appear before the commissioner or the commissioner's 465
authorized agent with any specific books of account, papers or other 466
documents, for examination relative thereto. 467
Sec. 8. Section 12-330l of the general statutes is repealed and the 468
following is substituted in lieu thereof (Effective October 1, 2025, and 469
applicable to hearing applications filed on or after October 1, 2025): 470
Any person aggrieved by any action under this chapter of the 471
commissioner or [his] the commissioner's authorized agent for which a 472
hearing is not elsewhere provided may apply to the commissioner, in 473
writing, [within] not later than sixty days after the notice of such action 474
is delivered or mailed to [him] such person, for a hearing, [setting forth 475
the reasons why such hearing should be granted and the manner of 476
relief sought] in accordance with the provisions of section 1 of this act. 477
The commissioner shall promptly consider each [such] valid application 478
and may grant or deny the hearing requested. If the hearing is denied, 479
the applicant shall be notified thereof forthwith. [; if] If it is granted, the 480
commissioner shall notify the applicant of the time and place fixed for 481
such hearing. After such hearing, the commissioner may make such 482
order in the premises as appears to [him] the commissioner just and 483
lawful and shall furnish a copy of such order to the applicant. The 484
commissioner may, by notice in writing, at any time, order a hearing on 485
[his] the commissioner's own initiative and require the taxpayer or any 486
other individual [whom he] who the commissioner believes to be in 487
possession of information concerning any manufacture, importation or 488
sale of tobacco products [which] that have escaped taxation to appear 489
before [him or his] the commissioner or the commissioner's authorized 490
agent with any specific books of account, papers or other documents, 491
for examination relative thereto. 492
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Sec. 9. Section 12-418 of the general statutes is repealed and the 493
following is substituted in lieu thereof (Effective October 1, 2025, and 494
applicable to protests filed on or after October 1, 2025): 495
(a) (1) Any person against whom an assessment or a reassessment is 496
made under section 12-414a, 12-415, 12-416 or 12-424 or any person 497
directly interested may file a written protest not later than sixty days 498
after service upon such person of notice thereof. If a written protest is 499
not filed within the sixty-day period, the assessment or reassessment 500
becomes final at the expiration of the period. 501
(2) Any person against whom an assessment or reassessment is made 502
under section 12-417 or any person directly interested may file a written 503
protest not later than ten days after service of notice upon such person. 504
If a written protest is not filed within such ten-day period, the 505
assessment or reassessment becomes final at the expiration of the 506
period. 507
(3) Any written protest under this subsection shall be filed in 508
accordance with the provisions of section 1 of this act. 509
(b) If a [written] valid protest is filed within the [sixty-day period, in 510
the case of an assessment or reassessment made under section 12-414a, 511
12-415, 12-416 or 12-424, or within the ten-day period, in the case of an 512
assessment or reassessment made under section 12-417] applicable time 513
period set forth in subsection (a) of this section, the commissioner shall 514
reconsider the assessment or reassessment and, if the person has so 515
requested in the [petition] protest, shall, in the commissioner's 516
discretion, grant the person an oral hearing and shall give such person 517
ten days' notice of the time and place of the hearing. The commissioner 518
may continue the hearing from time to time, as may be necessary, and 519
may assign the conduct of such hearing to a representative of the 520
commissioner. 521
(c) The commissioner may decrease or increase the amount of the 522
assessment or reassessment before it becomes final, but the amount may 523
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be increased only if a claim for the increase is asserted by the 524
commissioner at or before the hearing. 525
(d) The order or decision of the commissioner upon a protest, other 526
than a protest deemed invalid under section 1 of this act, becomes final 527
one month after service upon the person filing the protest of notice 528
thereof unless within such period such person seeks judicial review of 529
the commissioner's order or decision pursuant to section 12-422. 530
(e) All assessments or reassessments made by the commissioner 531
under section 12-414a, 12-415, 12-416 or 12-424 are due and payable at 532
the time they become final. 533
(f) Any notice required by this section shall be served personally or 534
by mail in the manner prescribed for service of notice of a deficiency 535
assessment. 536
Sec. 10. Section 12-447 of the general statutes is repealed and the 537
following is substituted in lieu thereof (Effective October 1, 2025, and 538
applicable to hearing applications filed on or after October 1, 2025): 539
Any person aggrieved by the action of the commissioner or [his] the 540
commissioner's authorized agent in fixing the amount of any tax as 541
provided by this chapter, or in imposing any penalty hereunder, may 542
apply to the commissioner, in writing, [within] not later than sixty days 543
after the notice of such action was mailed to [him] such person, for a 544
hearing and a correction of the amount of the tax or penalty so fixed, 545
[setting forth the reasons why such hearing should be granted and the 546
amount in which such tax should be reduced] in accordance with the 547
provisions of section 1 of this act. The commissioner shall promptly 548
consider each [such] valid application and may grant or deny the 549
hearing requested. If the hearing is denied, the applicant shall be 550
notified thereof forthwith. [; if] If it is granted, the commissioner shall 551
notify the applicant of the time and place fixed for such hearing. After 552
such hearing, the commissioner may make such order in the premises 553
as appears to him just and lawful and shall furnish a copy of such order 554
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to the applicant. The commissioner may, by notice in writing, at any 555
time within three years after the date when any return of any taxpayer 556
has been due, order a hearing on [his] the commissioner's own initiative 557
and require the taxpayer or any other individual [whom he] who the 558
commissioner believes to be in possession of information concerning 559
any manufacture, importation or sale of alcoholic beverages [which] 560
that have escaped taxation to appear before [him or his] the 561
commissioner or the commissioner's authorized agent with any 562
specified books of account, papers or other documents, for examination 563
relative thereto. 564
Sec. 11. Section 12-461 of the general statutes is repealed and the 565
following is substituted in lieu thereof (Effective October 1, 2025, and 566
applicable to hearing applications filed on or after October 1, 2025): 567
Any distributor aggrieved by the action of the commissioner or [his] 568
the commissioner's authorized agent in fixing the amount of any tax, 569
penalty or interest provided for by this chapter may apply to the 570
commissioner, in writing, [within] not later than sixty days after the 571
notice of such action is delivered or mailed to it, for a hearing and a 572
correction of the amount of such tax, penalty or interest so fixed, [setting 573
forth the reasons why such hearing should be granted and the amount 574
in which such tax, penalty or interest should be reduced] in accordance 575
with the provisions of section 1 of this act. The commissioner shall 576
promptly consider each [such] valid application and may grant or deny 577
the hearing requested. If the hearing is denied, the applicant shall be 578
notified forthwith. If it is granted, the commissioner shall notify the 579
applicant of the time and place fixed for such hearing. After such 580
hearing the commissioner may make such order in the premises as 581
appears to [him] the commissioner just and lawful and shall furnish a 582
copy of such order to the applicant. The commissioner may, by notice in 583
writing, at any time within three years after the date when any return of 584
any distributor has been due, order a hearing on [his] the 585
commissioner's own initiative and require the distributor or any other 586
individual [whom he] who the commissioner believes to be in 587
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possession of relevant information concerning the distributor to appear 588
before [him or his] the commissioner or the commissioner's authorized 589
agent with any specified books of account, papers or other documents, 590
for examination under oath. The commissioner, after a hearing, may 591
suspend or revoke the distributor's license of any distributor violating 592
any provision of this chapter. 593
Sec. 12. Subsection (a) of section 12-489 of the general statutes is 594
repealed and the following is substituted in lieu thereof (Effective October 595
1, 2025, and applicable to hearing applications filed on or after October 1, 596
2025): 597
(a) Any motor carrier aggrieved by any act of the commissioner or 598
the commissioner's authorized agent under this chapter may apply to 599
the commissioner, in writing, not later than sixty days after notification 600
of any such act of the commissioner is delivered or mailed to the motor 601
carrier, for a hearing and a correction of the amount of any tax, penalty 602
or interest, [setting forth reasons why such hearing should be granted 603
and the amount by which such tax, penalty or interest should be 604
reduced] in accordance with the provisions of section 1 of this act. The 605
commissioner shall promptly consider each [such] valid application and 606
may grant or deny the hearing requested. If the hearing is denied, the 607
applicant shall be notified forthwith. If it is granted, the commissioner 608
shall notify the applicant of the time and place fixed for such hearing. 609
After such hearing the commissioner may make such order in the 610
premises as appears to the commissioner just and lawful and shall 611
furnish a copy of such order to the applicant. The commissioner may, 612
by notice in writing, at any time within three years after the date when 613
any return of any taxpayer has been due, order a hearing on the 614
commissioner's own initiative and require the taxpayer or any 615
individual [whom] who the commissioner believes to be in possession 616
of relevant information concerning the taxpayer to appear before the 617
commissioner or the commissioner's authorized agent with any 618
specified books of account, papers or other documents, for examination 619
under oath. 620
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Sec. 13. Subsection (k) of section 12-493a of the general statutes is 621
repealed and the following is substituted in lieu thereof (Effective October 622
1, 2025, and applicable to hearing applications filed on or after October 1, 623
2025): 624
(k) Any carrier that is aggrieved by the action of the commissioner or 625
an authorized agent of the commissioner in fixing the amount of any 626
tax, penalty or interest under this section may apply to the 627
commissioner, in writing, not later than sixty days after the notice of 628
such action is delivered or mailed to such carrier, for a hearing and a 629
correction of the amount of such tax, penalty or interest, [setting forth 630
the reasons why such hearing should be granted and the amount by 631
which such tax, penalty or interest should be reduced] in accordance 632
with the provisions of section 1 of this act. The commissioner shall 633
promptly consider each [such] valid application and may grant or deny 634
the hearing requested. If the hearing request is denied, the carrier shall 635
be notified forthwith. If the hearing request is granted, the 636
commissioner shall notify the carrier of the date, time and place for such 637
hearing. After such hearing, the commissioner may make such order as 638
appears just and lawful to the commissioner and shall furnish a copy of 639
such order to the carrier. The commissioner may, by notice in writing, 640
order a hearing on the commissioner's own initiative and require a 641
carrier or any other individual who the commissioner believes to be in 642
possession of relevant information concerning such carrier to appear 643
before the commissioner or the commissioner's authorized agent with 644
any specified books of account, papers or other documents, for 645
examination under oath. 646
Sec. 14. Section 12-553 of the general statutes is repealed and the 647
following is substituted in lieu thereof (Effective October 1, 2025, and 648
applicable to hearing applications filed on or after October 1, 2025): 649
Any taxpayer, aggrieved by the action of the commissioner or [his] 650
the commissioner's authorized agent in fixing the amount of any tax, 651
penalty or interest provided for by this chapter, may apply to the 652
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commissioner, in writing, [within] not later than sixty days after notice 653
of such action is delivered or mailed to [him] such taxpayer, for a 654
hearing and a correction of the amount of the tax, penalty or interest so 655
fixed, [setting forth the reasons why such hearing should be granted and 656
the amount of the tax, penalty or interest should be reduced] in 657
accordance with the provisions of section 1 of this act. The commissioner 658
shall promptly consider each [such] valid application and may grant or 659
deny the hearing requested. If the hearing is denied, the applicant shall 660
be notified thereof forthwith. If it is granted, the commissioner shall 661
notify the applicant of the time and place fixed for such hearing. After 662
such hearing the commissioner may make such order in the premises as 663
appears to [him] the commissioner just and lawful and shall furnish a 664
copy of such order to the applicant. The commissioner may, by notice in 665
writing, at any time within three years after the date when any return of 666
any taxpayer has been due, order a hearing on [his] the commissioner's 667
own initiative and require the taxpayer or any other individual [whom 668
he] who the commissioner believes to be in possession of relevant 669
information concerning the taxpayer to appear before [him or his] the 670
commissioner or the commissioner's authorized agent with any 671
specified books of account, papers or other documents, for examination 672
under oath. 673
Sec. 15. Section 12-595 of the general statutes is repealed and the 674
following is substituted in lieu thereof (Effective October 1, 2025, and 675
applicable to hearing applications filed on or after October 1, 2025): 676
Any taxpayer aggrieved by the action of the Commissioner of 677
Revenue Services or an authorized agent of said commissioner in fixing 678
the amount of tax imposed under section 12-587 or any penalty or 679
interest related thereto may apply to said commissioner in writing, 680
[within] not later than sixty days after notice of such action is delivered 681
or mailed to such taxpayer, for a hearing and a correction of the amount 682
of such tax, penalty or interest so fixed, [setting forth the reasons why 683
such hearing should be granted and the amount in which such tax, 684
penalty or interest should be reduced] in accordance with the provisions 685
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of section 1 of this act. Said commissioner shall promptly consider each 686
[such] valid application and may grant or deny the hearing requested. 687
If the hearing is denied, the applicant shall be notified thereof forthwith. 688
If it is granted, said commissioner shall notify the applicant of the time 689
and place fixed for such hearing. After such hearing said commissioner 690
may make such order in the premises as appears to [him] said 691
commissioner just and lawful and shall furnish a copy of such order to 692
the applicant. Said commissioner may, by notice in writing, at any time 693
within three years after the date when any return of any taxpayer has 694
been due, order a hearing on [his] said commissioner's own initiative 695
and require the taxpayer or any other individual [whom he] who said 696
believes to be in possession of relevant information concerning the 697
taxpayer to appear before [him or his] said commissioner or said 698
commissioner's authorized agent with any specified books of account, 699
papers or other documents, for examination under oath. 700
Sec. 16. Section 12-729 of the general statutes is repealed and the 701
following is substituted in lieu thereof (Effective October 1, 2025, and 702
applicable to protests filed on or after October 1, 2025): 703
(a) Sixty days after the date on which it is mailed, a notice of proposed 704
assessment of a deficiency shall constitute a final assessment of the 705
amount of tax specified together with interest, additions to tax and 706
penalties except only for such amounts as to which the taxpayer has 707
filed a protest with the Commissioner of Revenue Services. 708
(b) [Within] Not later than sixty days after the mailing of a deficiency 709
notice, the taxpayer may file with the commissioner a written protest 710
against the proposed assessment in [which he shall set forth the grounds 711
on which the protest is based] accordance with the provisions of section 712
1 of this act. If a valid protest is filed, the commissioner shall reconsider 713
the assessment of the deficiency and, if the taxpayer has so requested, 714
may grant or deny the taxpayer or the taxpayer's authorized 715
representatives an oral hearing. 716
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(c) Notice of the commissioner's determination shall be mailed to the 717
taxpayer and such notice shall set forth briefly the commissioner's 718
findings of fact and the basis of decision in each case decided in whole 719
or in part adversely to the taxpayer. 720
(d) The action of the commissioner on the taxpayer's protest, other 721
than a protest deemed invalid under section 1 of this act shall be final 722
upon the expiration of one month from the date on which [he] the 723
commissioner mails notice of [his] the commissioner's action to the 724
taxpayer unless within such period the taxpayer seeks judicial review of 725
the commissioner's determination. 726
Sec. 17. Subsection (b) of section 12-790c of the general statutes is 727
repealed and the following is substituted in lieu thereof (Effective October 728
1, 2025, and applicable to hearing requests filed on or after October 1, 2025): 729
(b) (1) The commissioner may issue a written order notifying a tax 730
preparer or facilitator of the suspension or revocation of such tax 731
preparer's or facilitator's permit for good cause shown. Such notice shall 732
include the right of the tax preparer or facilitator to request, in writing, 733
a hearing before the commissioner in accordance with the provisions of 734
section 1 of this act, provided such request is received by the 735
commissioner not later than thirty days after the date of such notice. 736
(2) If a hearing is timely requested and complies with the 737
requirements of section 1 of this act, the commissioner shall, not later 738
than thirty days after the receipt of the request, convene such hearing as 739
a contested case in accordance with the provisions of chapter 54. Not 740
later than sixty days after the receipt of the request, the commissioner 741
shall issue a final decision vacating, modifying or affirming the 742
commissioner's order. Any person aggrieved by such final decision may 743
appeal such decision in accordance with the provisions of section 4-183. 744
Sec. 18. (NEW) (Effective from passage) Commencing July 1, 2025, the 745
Commissioner of Revenue Services shall track and record the source of 746
the revenue received by the state each fiscal year from the tax imposed 747
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under chapters 208, 219 and 229 of the general statutes, for the purpose 748
of accurately and fairly attributing to each municipality revenue 749
received from each such tax. The commissioner shall determine the 750
sourcing method for the revenue from the tax imposed under chapters 751
208 and 219 of the general statutes, provided such revenue is sourced to 752
each municipality in which the taxpayer has an office or facility in the 753
state. The revenue from the tax imposed under chapter 229 of the 754
general statutes shall be sourced to the municipality in which the 755
employer's office or facility is located, for the employees who work 756
primarily at such location. Taxpayers paying a tax specified in this 757
subsection shall provide disaggregated information and such other data 758
the commissioner requests to carry out the provisions of this section. On 759
or before June 30, 2026, and annually thereafter, the commissioner shall 760
post on the Department of Revenue Services' Internet web site a list of 761
all municipalities and the amount of revenue from each such tax 762
attributed to the municipality for the applicable fiscal year. 763
Sec. 19. Subparagraph (B) of subdivision (20) of subsection (a) of 764
section 12-701 of the general statutes is repealed and the following is 765
substituted in lieu thereof (Effective January 1, 2026, and applicable to 766
taxable years commencing on or after January 1, 2026): 767
(B) There shall be subtracted therefrom: 768
(i) To the extent properly includable in gross income for federal 769
income tax purposes, any income with respect to which taxation by any 770
state is prohibited by federal law; 771
(ii) To the extent allowable under section 12-718, exempt dividends 772
paid by a regulated investment company; 773
(iii) To the extent properly includable in gross income for federal 774
income tax purposes, the amount of any refund or credit for 775
overpayment of income taxes imposed by this state, or any other state 776
of the United States or a political subdivision thereof, or the District of 777
Columbia; 778
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(iv) To the extent properly includable in gross income for federal 779
income tax purposes and not otherwise subtracted from federal 780
adjusted gross income pursuant to clause (x) of this subparagraph in 781
computing Connecticut adjusted gross income, any tier 1 railroad 782
retirement benefits; 783
(v) To the extent any additional allowance for depreciation under 784
Section 168(k) of the Internal Revenue Code for property placed in 785
service after September 27, 2017, was added to federal adjusted gross 786
income pursuant to subparagraph (A)(ix) of this subdivision in 787
computing Connecticut adjusted gross income, twenty-five per cent of 788
such additional allowance for depreciation in each of the four 789
succeeding taxable years; 790
(vi) To the extent properly includable in gross income for federal 791
income tax purposes, any interest income from obligations issued by or 792
on behalf of the state of Connecticut, any political subdivision thereof, 793
or public instrumentality, state or local authority, district or similar 794
public entity created under the laws of the state of Connecticut; 795
(vii) To the extent properly includable in determining the net gain or 796
loss from the sale or other disposition of capital assets for federal income 797
tax purposes, any gain from the sale or exchange of obligations issued 798
by or on behalf of the state of Connecticut, any political subdivision 799
thereof, or public instrumentality, state or local authority, district or 800
similar public entity created under the laws of the state of Connecticut, 801
in the income year such gain was recognized; 802
(viii) (I) Any interest on indebtedness incurred or continued to 803
purchase or carry obligations or securities the interest on which is 804
subject to tax under this chapter but exempt from federal income tax, to 805
the extent that such interest on indebtedness is not deductible in 806
determining federal adjusted gross income and is attributable to a trade 807
or business carried on by such individual, and (II) the amortizable bond 808
premium for the taxable year on any bond the interest on which is 809
Raised Bill No. 7270
LCO No. 6964 27 of 39
subject to tax under this chapter but exempt from federal income tax, to 810
the extent that such premiums are not deductible in determining federal 811
adjusted gross income; 812
(ix) Ordinary and necessary expenses paid or incurred during the 813
taxable year for the production or collection of income which is subject 814
to taxation under this chapter but exempt from federal income tax, or 815
the management, conservation or maintenance of property held for the 816
production of such income, [and the amortizable bond premium for the 817
taxable year on any bond the interest on which is subject to tax under 818
this chapter but exempt from federal income tax,] to the extent that such 819
expenses [and premiums] are not deductible in determining federal 820
adjusted gross income and are attributable to a trade or business carried 821
on by such individual; 822
(x) (I) For taxable years commencing prior to January 1, 2019, for a 823
person who files a return under the federal income tax as an unmarried 824
individual whose federal adjusted gross income for such taxable year is 825
less than fifty thousand dollars, or as a married individual filing 826
separately whose federal adjusted gross income for such taxable year is 827
less than fifty thousand dollars, or for a husband and wife who file a 828
return under the federal income tax as married individuals filing jointly 829
whose federal adjusted gross income for such taxable year is less than 830
sixty thousand dollars or a person who files a return under the federal 831
income tax as a head of household whose federal adjusted gross income 832
for such taxable year is less than sixty thousand dollars, an amount 833
equal to the Social Security benefits includable for federal income tax 834
purposes; 835
(II) For taxable years commencing prior to January 1, 2019, for a 836
person who files a return under the federal income tax as an unmarried 837
individual whose federal adjusted gross income for such taxable year is 838
fifty thousand dollars or more, or as a married individual filing 839
separately whose federal adjusted gross income for such taxable year is 840
fifty thousand dollars or more, or for a husband and wife who file a 841
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return under the federal income tax as married individuals filing jointly 842
whose federal adjusted gross income from such taxable year is sixty 843
thousand dollars or more or for a person who files a return under the 844
federal income tax as a head of household whose federal adjusted gross 845
income for such taxable year is sixty thousand dollars or more, an 846
amount equal to the difference between the amount of Social Security 847
benefits includable for federal income tax purposes and the lesser of 848
twenty-five per cent of the Social Security benefits received during the 849
taxable year, or twenty-five per cent of the excess described in Section 850
86(b)(1) of the Internal Revenue Code; 851
(III) For the taxable year commencing January 1, 2019, and each 852
taxable year thereafter, for a person who files a return under the federal 853
income tax as an unmarried individual whose federal adjusted gross 854
income for such taxable year is less than seventy-five thousand dollars, 855
or as a married individual filing separately whose federal adjusted gross 856
income for such taxable year is less than seventy-five thousand dollars, 857
or for a husband and wife who file a return under the federal income tax 858
as married individuals filing jointly whose federal adjusted gross 859
income for such taxable year is less than one hundred thousand dollars 860
or a person who files a return under the federal income tax as a head of 861
household whose federal adjusted gross income for such taxable year is 862
less than one hundred thousand dollars, an amount equal to the Social 863
Security benefits includable for federal income tax purposes; and 864
(IV) For the taxable year commencing January 1, 2019, and each 865
taxable year thereafter, for a person who files a return under the federal 866
income tax as an unmarried individual whose federal adjusted gross 867
income for such taxable year is seventy-five thousand dollars or more, 868
or as a married individual filing separately whose federal adjusted gross 869
income for such taxable year is seventy-five thousand dollars or more, 870
or for a husband and wife who file a return under the federal income tax 871
as married individuals filing jointly whose federal adjusted gross 872
income from such taxable year is one hundred thousand dollars or more 873
or for a person who files a return under the federal income tax as a head 874
Raised Bill No. 7270
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of household whose federal adjusted gross income for such taxable year 875
is one hundred thousand dollars or more, an amount equal to the 876
difference between the amount of Social Security benefits includable for 877
federal income tax purposes and the lesser of twenty-five per cent of the 878
Social Security benefits received during the taxable year, or twenty-five 879
per cent of the excess described in Section 86(b)(1) of the Internal 880
Revenue Code; 881
(xi) To the extent properly includable in gross income for federal 882
income tax purposes, any amount rebated to a taxpayer pursuant to 883
section 12-746; 884
(xii) To the extent properly includable in the gross income for federal 885
income tax purposes of a designated beneficiary, any distribution to 886
such beneficiary from any qualified state tuition program, as defined in 887
Section 529(b) of the Internal Revenue Code, established and 888
maintained by this state or any official, agency or instrumentality of the 889
state; 890
(xiii) To the extent allowable under section 12-701a, contributions to 891
accounts established pursuant to any qualified state tuition program, as 892
defined in Section 529(b) of the Internal Revenue Code, established and 893
maintained by this state or any official, agency or instrumentality of the 894
state; 895
(xiv) To the extent properly includable in gross income for federal 896
income tax purposes, the amount of any Holocaust victims' settlement 897
payment received in the taxable year by a Holocaust victim; 898
(xv) To the extent properly includable in the gross income for federal 899
income tax purposes of a designated beneficiary, as defined in section 900
3-123aa, interest, dividends or capital gains earned on contributions to 901
accounts established for the designated beneficiary pursuant to the 902
Connecticut Homecare Option Program for the Elderly established by 903
sections 3-123aa to 3-123ff, inclusive; 904
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(xvi) To the extent properly includable in gross income for federal 905
income tax purposes, any income received from the United States 906
government as retirement pay for a retired member of (I) the Armed 907
Forces of the United States, as defined in Section 101 of Title 10 of the 908
United States Code, or (II) the National Guard, as defined in Section 101 909
of Title 10 of the United States Code; 910
(xvii) To the extent properly includable in gross income for federal 911
income tax purposes for the taxable year, any income from the discharge 912
of indebtedness in connection with any reacquisition, after December 913
31, 2008, and before January 1, 2011, of an applicable debt instrument or 914
instruments, as those terms are defined in Section 108 of the Internal 915
Revenue Code, as amended by Section 1231 of the American Recovery 916
and Reinvestment Act of 2009, to the extent any such income was added 917
to federal adjusted gross income pursuant to subparagraph (A)(xi) of 918
this subdivision in computing Connecticut adjusted gross income for a 919
preceding taxable year; 920
(xviii) To the extent not deductible in determining federal adjusted 921
gross income, the amount of any contribution to a manufacturing 922
reinvestment account established pursuant to section 32-9zz in the 923
taxable year that such contribution is made; 924
(xix) To the extent properly includable in gross income for federal 925
income tax purposes, (I) for the taxable year commencing January 1, 926
2015, ten per cent of the income received from the state teachers' 927
retirement system, (II) for the taxable years commencing January 1, 928
2016, to January 1, 2020, inclusive, twenty-five per cent of the income 929
received from the state teachers' retirement system, and (III) for the 930
taxable year commencing January 1, 2021, and each taxable year 931
thereafter, fifty per cent of the income received from the state teachers' 932
retirement system or, for a taxpayer whose federal adjusted gross 933
income does not exceed the applicable threshold under clause (xx) of 934
this subparagraph, the percentage pursuant to said clause of the income 935
received from the state teachers' retirement system, whichever 936
Raised Bill No. 7270
LCO No. 6964 31 of 39
deduction is greater; 937
(xx) To the extent properly includable in gross income for federal 938
income tax purposes, except for retirement benefits under clause (iv) of 939
this subparagraph and retirement pay under clause (xvi) of this 940
subparagraph, for a person who files a return under the federal income 941
tax as an unmarried individual whose federal adjusted gross income for 942
such taxable year is less than seventy-five thousand dollars, or as a 943
married individual filing separately whose federal adjusted gross 944
income for such taxable year is less than seventy-five thousand dollars, 945
or as a head of household whose federal adjusted gross income for such 946
taxable year is less than seventy-five thousand dollars, or for a husband 947
and wife who file a return under the federal income tax as married 948
individuals filing jointly whose federal adjusted gross income for such 949
taxable year is less than one hundred thousand dollars, (I) for the taxable 950
year commencing January 1, 2019, fourteen per cent of any pension or 951
annuity income, (II) for the taxable year commencing January 1, 2020, 952
twenty-eight per cent of any pension or annuity income, (III) for the 953
taxable year commencing January 1, 2021, forty-two per cent of any 954
pension or annuity income, and (IV) for the taxable years commencing 955
January 1, 2022, and January 1, 2023, one hundred per cent of any 956
pension or annuity income; 957
(xxi) To the extent properly includable in gross income for federal 958
income tax purposes, except for retirement benefits under clause (iv) of 959
this subparagraph and retirement pay under clause (xvi) of this 960
subparagraph, any pension or annuity income for the taxable year 961
commencing on or after January 1, 2024, and each taxable year 962
thereafter, in accordance with the following schedule, for a person who 963
files a return under the federal income tax as an unmarried individual 964
whose federal adjusted gross income for such taxable year is less than 965
one hundred thousand dollars, or as a married individual filing 966
separately whose federal adjusted gross income for such taxable year is 967
less than one hundred thousand dollars, or as a head of household 968
whose federal adjusted gross income for such taxable year is less than 969
Raised Bill No. 7270
LCO No. 6964 32 of 39
one hundred thousand dollars: 970
T1
Federal Adjusted Gross Income Deduction
T2
Less than $75,000 100.0%
T3
$75,000 but not over $77,499 85.0%
T4
$77,500 but not over $79,999 70.0%
T5
$80,000 but not over $82,499 55.0%
T6
$82,500 but not over $84,999 40.0%
T7
$85,000 but not over $87,499 25.0%
T8
$87,500 but not over $89,999 10.0%
T9 $90,000 but not over $94,999 5.0%
T10
$95,000 but not over $99,999 2.5%
T11
$100,000 and over 0.0%
(xxii) To the extent properly includable in gross income for federal 971
income tax purposes, except for retirement benefits under clause (iv) of 972
this subparagraph and retirement pay under clause (xvi) of this 973
subparagraph, any pension or annuity income for the taxable year 974
commencing on or after January 1, 2024, and each taxable year 975
thereafter, in accordance with the following schedule for married 976
individuals who file a return under the federal income tax as married 977
individuals filing jointly whose federal adjusted gross income for such 978
taxable year is less than one hundred fifty thousand dollars: 979
T12
Federal Adjusted Gross Income Deduction
T13
Less than $100,000 100.0%
T14
$100,000 but not over $104,999 85.0%
T15
$105,000 but not over $109,999 70.0%
T16
$110,000 but not over $114,999 55.0%
T17 $115,000 but not over $119,999 40.0%
T18
$120,000 but not over $124,999 25.0%
T19
$125,000 but not over $129,999 10.0%
T20
$130,000 but not over $139,999 5.0%
Raised Bill No. 7270
LCO No. 6964 33 of 39
T21 $140,000 but not over $149,999 2.5%
T22
$150,000 and over 0.0%
(xxiii) The amount of lost wages and medical, travel and housing 980
expenses, not to exceed ten thousand dollars in the aggregate, incurred 981
by a taxpayer during the taxable year in connection with the donation 982
to another person of an organ for organ transplantation occurring on or 983
after January 1, 2017; 984
(xxiv) To the extent properly includable in gross income for federal 985
income tax purposes, the amount of any financial assistance received 986
from the Crumbling Foundations Assistance Fund or paid to or on 987
behalf of the owner of a residential building pursuant to sections 8-442 988
and 8-443; 989
(xxv) To the extent properly includable in gross income for federal 990
income tax purposes, the amount calculated pursuant to subsection (b) 991
of section 12-704g for income received by a general partner of a venture 992
capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to 993
time; 994
(xxvi) To the extent any portion of a deduction under Section 179 of 995
the Internal Revenue Code was added to federal adjusted gross income 996
pursuant to subparagraph (A)(xiv) of this subdivision in computing 997
Connecticut adjusted gross income, twenty-five per cent of such 998
disallowed portion of the deduction in each of the four succeeding 999
taxable years; 1000
(xxvii) To the extent properly includable in gross income for federal 1001
income tax purposes, for a person who files a return under the federal 1002
income tax as an unmarried individual whose federal adjusted gross 1003
income for such taxable year is less than seventy-five thousand dollars, 1004
or as a married individual filing separately whose federal adjusted gross 1005
income for such taxable year is less than seventy-five thousand dollars, 1006
or as a head of household whose federal adjusted gross income for such 1007
Raised Bill No. 7270
LCO No. 6964 34 of 39
taxable year is less than seventy-five thousand dollars, or for a husband 1008
and wife who file a return under the federal income tax as married 1009
individuals filing jointly whose federal adjusted gross income for such 1010
taxable year is less than one hundred thousand dollars, for the taxable 1011
year commencing January 1, 2023, twenty-five per cent of any 1012
distribution from an individual retirement account other than a Roth 1013
individual retirement account; 1014
(xxviii) To the extent properly includable in gross income for federal 1015
income tax purposes, for a person who files a return under the federal 1016
income tax as an unmarried individual whose federal adjusted gross 1017
income for such taxable year is less than one hundred thousand dollars, 1018
or as a married individual filing separately whose federal adjusted gross 1019
income for such taxable year is less than one hundred thousand dollars, 1020
or as a head of household whose federal adjusted gross income for such 1021
taxable year is less than one hundred thousand dollars, (I) for the taxable 1022
year commencing January 1, 2024, fifty per cent of any distribution from 1023
an individual retirement account other than a Roth individual 1024
retirement account, (II) for the taxable year commencing January 1, 2025, 1025
seventy-five per cent of any distribution from an individual retirement 1026
account other than a Roth individual retirement account, and (III) for 1027
the taxable year commencing January 1, 2026, and each taxable year 1028
thereafter, any distribution from an individual retirement account other 1029
than a Roth individual retirement account. The subtraction under this 1030
clause shall be made in accordance with the following schedule: 1031
T23
Federal Adjusted Gross Income Deduction
T24
Less than $75,000 100.0%
T25 $75,000 but not over $77,499 85.0%
T26
$77,500 but not over $79,999 70.0%
T27
$80,000 but not over $82,499 55.0%
T28
$82,500 but not over $84,999 40.0%
T29
$85,000 but not over $87,499 25.0%
T30
$87,500 but not over $89,999 10.0%
Raised Bill No. 7270
LCO No. 6964 35 of 39
T31 $90,000 but not over $94,999 5.0%
T32
$95,000 but not over $99,999 2.5%
T33
$100,000 and over 0.0%
(xxix) To the extent properly includable in gross income for federal 1032
income tax purposes, for married individuals who file a return under 1033
the federal income tax as married individuals filing jointly whose 1034
federal adjusted gross income for such taxable year is less than one 1035
hundred fifty thousand dollars, (I) for the taxable year commencing 1036
January 1, 2024, fifty per cent of any distribution from an individual 1037
retirement account other than a Roth individual retirement account, (II) 1038
for the taxable year commencing January 1, 2025, seventy-five per cent 1039
of any distribution from an individual retirement account other than a 1040
Roth individual retirement account, and (III) for the taxable year 1041
commencing January 1, 2026, and each taxable year thereafter, any 1042
distribution from an individual retirement account other than a Roth 1043
individual retirement account. The subtraction under this clause shall 1044
be made in accordance with the following schedule: 1045
T34
Federal Adjusted Gross Income Deduction
T35
Less than $100,000 100.0%
T36
$100,000 but not over $104,999 85.0%
T37
$105,000 but not over $109,999 70.0%
T38
$110,000 but not over $114,999 55.0%
T39
$115,000 but not over $119,999 40.0%
T40
$120,000 but not over $124,999 25.0%
T41
$125,000 but not over $129,999 10.0%
T42 $130,000 but not over $139,999 5.0%
T43
$140,000 but not over $149,999 2.5%
T44
$150,000 and over 0.0%
(xxx) To the extent properly includable in gross income for federal 1046
income tax purposes, for the taxable year commencing January 1, 2022, 1047
Raised Bill No. 7270
LCO No. 6964 36 of 39
the amount or amounts paid or otherwise credited to any eligible 1048
resident of this state under (I) the 2020 Earned Income Tax Credit 1049
enhancement program from funding allocated to the state through the 1050
Coronavirus Relief Fund established under the Coronavirus Aid, Relief, 1051
and Economic Security Act, P.L. 116-136, and (II) the 2021 Earned 1052
Income Tax Credit enhancement program from funding allocated to the 1053
state pursuant to Section 9901 of Subtitle M of Title IX of the American 1054
Rescue Plan Act of 2021, P.L. 117-2; 1055
(xxxi) For the taxable year commencing January 1, 2023, and each 1056
taxable year thereafter, for a taxpayer licensed under the provisions of 1057
chapter 420f or 420h, the amount of ordinary and necessary expenses 1058
that would be eligible to be claimed as a deduction for federal income 1059
tax purposes under Section 162(a) of the Internal Revenue Code but that 1060
are disallowed under Section 280E of the Internal Revenue Code 1061
because marijuana is a controlled substance under the federal 1062
Controlled Substance Act; 1063
(xxxii) To the extent properly includable in gross income for federal 1064
income tax purposes, for the taxable year commencing on or after 1065
January 1, 2025, and each taxable year thereafter, any common stock 1066
received by the taxpayer during the taxable year under a share plan, as 1067
defined in section 12-217ss; 1068
(xxxiii) To the extent properly includable in gross income for federal 1069
income tax purposes, the amount of any student loan reimbursement 1070
payment received by a taxpayer pursuant to section 10a-19m; 1071
(xxxiv) Contributions to an ABLE account established pursuant to 1072
sections 3-39k to 3-39q, inclusive, not to exceed five thousand dollars for 1073
each individual taxpayer or ten thousand dollars for taxpayers filing a 1074
joint return; and 1075
(xxxv) To the extent properly includable in gross income for federal 1076
income tax purposes, the amount of any payment received pursuant to 1077
subsection (c) of section 3-122a. 1078
Raised Bill No. 7270
LCO No. 6964 37 of 39
Sec. 20. Subdivision (3) of subsection (b) of section 12-218h of the 1079
general statutes is repealed and the following is substituted in lieu 1080
thereof (Effective from passage): 1081
(3) For the thirty-year period beginning with a combined group's first 1082
income year that begins in 2026, a combined group entitled to a 1083
deduction under this subsection shall deduct from combined group net 1084
income an amount equal to one-thirtieth of the amount necessary to 1085
offset the increase in the valuation allowance against net operating 1086
losses and tax credits in the state, as computed in accordance with 1087
generally accepted accounting principles, that resulted from the 1088
enactment of sections 12-218e and 12-218f. Such increase in valuation 1089
allowance shall be computed based on the change in valuation 1090
allowance that was reported in the combined group's financial 1091
statements for the income year commencing on or after January 1, [2016] 1092
2015, but prior to January 1, [2017] 2016. 1093
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2025 New section
Sec. 2 October 1, 2025, and
applicable to protests filed
on or after October 1, 2025
12-206
Sec. 3 October 1, 2025, and
applicable to protests filed
on or after October 1, 2025
12-225
Sec. 4 October 1, 2025 12-226
Sec. 5 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-236
Sec. 6 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-268i
Raised Bill No. 7270
LCO No. 6964 38 of 39
Sec. 7 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-311
Sec. 8 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-330l
Sec. 9 October 1, 2025, and
applicable to protests filed
on or after October 1, 2025
12-418
Sec. 10 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-447
Sec. 11 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-461
Sec. 12 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-489(a)
Sec. 13 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-493a(k)
Sec. 14 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-553
Sec. 15 October 1, 2025, and
applicable to hearing
applications filed on or
after October 1, 2025
12-595
Sec. 16 October 1, 2025, and
applicable to protests filed
on or after October 1, 2025
12-729
Sec. 17 October 1, 2025, and
applicable to hearing
requests filed on or after
October 1, 2025
12-790c(b)
Raised Bill No. 7270
LCO No. 6964 39 of 39
Sec. 18 from passage New section
Sec. 19 January 1, 2026, and
applicable to taxable years
commencing on or after
January 1, 2026
12-701(a)(20)(B)
Sec. 20 from passage 12-218h(b)(3)
Statement of Purpose:
To (1) establish requirements for filing certain tax protests, (2) require
the Commissioner of Revenue Services to provide certain disaggregated
tax sourcing information; (3) eliminate the requirement that the
amortizable bond premium subtraction for purposes of calculating
Connecticut adjustable gross income be attributable to a trade or
business of the taxpayer, and (4) revise certain dates with respect to the
application of the valuation allowance under section 12-218h of the
general statutes.
[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.]