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Connecticut Public Acts 1996

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Senate Bill No. 621

PUBLIC ACT NO. 96-104

AN ACT CONCERNING COMMERCIAL PRINTING FOR OUT-OF-STATE CUSTOMERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-213 of the general statutes, as amended by section 3 of public act 95-2, is repealed and the following is substituted in lieu thereof:

When used in this part, unless the context otherwise requires, "taxpayer" and "company" mean any corporation, foreign municipal electric utility, as defined in section 12-59, joint stock company or association or any fiduciary thereof but not a municipal utility as defined in chapter 212 and chapter 212a, and any dissolved corporation which continues to conduct business; "dissolved corporation" means any company which has terminated its corporate existence by resolution, expiration, decree or forfeiture; "Commissioner of Revenue Services" or "commissioner" means the Commissioner of Revenue Services; "tax year" means the calendar year in which the tax is payable; "income year" means the calendar year upon the basis of which net income is computed under this part, unless a fiscal year other than the calendar year has been established for the purpose of the federal corporation net income tax, in which case it means the fiscal year so established or a period of less than twelve months ending as of the date on which liability under this chapter ceases to accrue by reason of dissolution, forfeiture, withdrawal, merger or consolidation; "fiscal year" means the income year ending on the last day of any month other than December or an annual period which varies from fifty-two to fifty-three weeks elected by the taxpayer in accordance with the provisions of the Internal Revenue Code; "paid" means "paid or accrued" or "paid or incurred", construed according to the method of accounting upon the basis of which net income is computed under this part; "received" means "received" or "accrued", construed according to the method of accounting upon the basis of which net income is computed under this part; "gross income" means gross income as defined in the federal corporation net income tax law in force on the last day of the income year and, in addition, means any interest or exempt interest dividends as defined in Section 852(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, received or interest paid by the taxpayer or losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, incurred by the taxpayer which are excluded from gross income for purposes of assessing the federal corporation net income tax, and in addition, notwithstanding any other provision of law, means interest or exempt interest dividends as defined in said Section 852(b)(5) of the Internal Revenue Code of 1986, accrued on or after the application date, with respect to any obligation issued by or on behalf of the state, its agencies, authorities, commissions and other instrumentalities, or by or on behalf of its political subdivisions and their agencies, authorities, commissions and other instrumentalities; but "gross income" shall not include (1) the amount which for federal income tax purposes is treated as a dividend received by a domestic United States corporation from a foreign corporation on account of foreign taxes deemed paid by such domestic corporation, when such domestic corporation elects the foreign tax credit for federal income tax purposes and (2) the amount of net gain to any taxpayer, engaged in the business of farming in Connecticut, from the sale or exchange of any cattle raised from birth on a farm in this state operated by such taxpayer, provided not less than seventy-five per cent of such taxpayer's gross income is derived from farming; "net income" means net earnings received during the income year and available for contributors of capital, whether they are creditors or stockholders, computed by subtracting from gross income the deductions allowed by the terms of section 12-217, except that in the case of a domestic insurance company which is a life insurance company "net income" means life insurance company taxable income (a) increased by any amount or amounts which have been deducted in the computation of gain or loss from operations in respect of (1) the life insurance company's share of tax-exempt interest, (2) operations loss carry-backs and capital loss carry-backs and (3) operations loss carry-overs and capital loss carry-overs arising in any taxable year commencing prior to January 1, 1973, and (b) reduced by any amount or amounts which have been deducted as operations loss carry-backs or capital loss carry-backs in the computation of gain or loss from operations for any taxable year commencing on or after January 1, 1973, but only to the extent that such amount or amounts, would, for federal tax purposes, have been deductible in the taxable year as operations loss carry-overs or capital loss carry-overs if they had not been deducted in a previous taxable year as carry-backs; for purposes of the preceding exception the terms "life insurance company", "life insurance company taxable income", "life insurance company's share", "operations loss carry-back", "capital loss carry-back", "operations loss carry-over", "capital loss carry-over" and "gain or loss from operations" have the same meaning as they have in the federal corporation income tax law effective and in force on the last day of the income year; "fiduciary" means any receiver, liquidator, referee, trustee, assignee or other fiduciary or officer or agent appointed by any court or by any other authority, except the Commissioner of Banking acting as receiver or liquidator under the authority of the provisions of sections 36a-210 AS AMENDED and 36a-218 to 36a-239, inclusive AS AMENDED; "carrying on or doing business" means and includes each and every act, power or privilege exercised or enjoyed in this state, as an incident to, or by virtue of, the powers and privileges acquired by the nature of any organization whether the form of existence is corporate, associate, joint stock company or fiduciary [;] EXCEPT THAT A COMPANY THAT HAS CONTRACTED WITH A COMMERCIAL PRINTER FOR PRINTING AND DISTRIBUTION OF PRINTED MATERIAL SHALL NOT BE DEEMED TO BE CARRYING ON OR DOING BUSINESS IN THIS STATE BECAUSE OF (A) THE OWNERSHIP OR LEASING BY THAT COMPANY OF TANGIBLE OR INTANGIBLE PERSONAL PROPERTY LOCATED AT THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, (B) THE SALE BY THAT COMPANY OF PROPERTY OF ANY KIND PRODUCED OR PROCESSED AT AND SHIPPED OR DISTRIBUTED FROM THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, (C) THE ACTIVITIES OF THAT COMPANY'S EMPLOYEES OR AGENTS AT THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, WHICH ACTIVITIES RELATE TO QUALITY CONTROL, DISTRIBUTION OR PRINTING SERVICES PERFORMED BY THE PRINTER, OR (D) THE ACTIVITIES OF ANY KIND PERFORMED BY THE COMMERCIAL PRINTER IN THIS STATE FOR OR ON BEHALF OF THAT COMPANY [4m; [0m "interest paid" means and includes, in the case of state banks and trust companies, national banks, mutual savings banks, cooperative banks, savings and loan associations, amounts paid to, or credited to the accounts of, depositors or holders of accounts as dividends on their deposits or withdrawable accounts, if such amounts paid or credited are withdrawable on demand subject only to customary notice of intention to withdraw; "alternative energy system" means design systems, equipment or materials which utilize as their energy source: (1) Solar, (2) wind, (3) water or (4) biomass energy in providing space heating or cooling, water heating or generation of electricity, but shall not include wood-burning stoves; "S corporation" means any corporation which is an S corporation for federal income tax purposes.

Sec. 2. Subdivision (6) of section 12-407 of the general statutes, as amended by sections 12 and 21 of public act 95-257, is repealed and the following is substituted in lieu thereof:

(6) "Storage" and "use" do not include (A) keeping, retaining or exercising any right or power over tangible personal property shipped or brought into this state for the purpose of subsequently transporting it outside the state for use thereafter solely outside the state, or for the purpose of being processed, fabricated or manufactured into, attached to or incorporated into, other tangible personal property to be transported outside the state and thereafter used solely outside the state OR (B) KEEPING, RETAINING OR EXERCISING ANY RIGHT OR POWER OVER TANGIBLE PERSONAL PROPERTY ACQUIRED BY THE CUSTOMER OF A COMMERCIAL PRINTER WHILE SUCH PROPERTY IS LOCATED AT THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE PURSUANT TO A CONTRACT WITH SUCH PRINTER FOR PRINTING AND DISTRIBUTION OF PRINTED MATERIAL IF THE COMMERCIAL PRINTER COULD HAVE ACQUIRED SUCH PROPERTY WITHOUT APPLICATION OF TAX UNDER THIS CHAPTER.

Sec. 3. Subdivision (15) of section 12-407 of the general statutes, as amended by sections 12 and 21 of public act 95-257, is repealed and the following is substituted in lieu thereof:

(15) "Engaged in business in the state" means and includes but shall not be limited to the following acts or methods of transacting business: [(a)] (A) Selling in this state, or any activity in this state in connection with selling in this state, tangible personal property for use, storage or consumption within the state; [(b)] (B) engaging in the transfer for a consideration of the occupancy of any room or rooms in a hotel or lodging house for a period of thirty consecutive calendar days or less; [(c)] (C) rendering in this state any service described in any of the subdivisions of subsection (2) of this section; [(d)] (D) maintaining, occupying or using, permanently or temporarily, directly or indirectly, through a subsidiary or agent, by whatever name called, of any office, place of distribution, sales or sample room or place, warehouse or storage point or other place of business or having any representative, agent, salesman, canvasser or solicitor operating in this state for the purpose of selling, delivering or taking orders; [(e)] (E) notwithstanding the fact that retail sales are made from outside this state to a destination within this state and that a place of business is not maintained in this state, engaging in regular or systematic solicitation of sales of tangible personal property in this state [(A)] (i) by the display of advertisements on billboards or other outdoor advertising in this state, [(B)] (ii) by the distribution of catalogs, periodicals, advertising flyers or other advertising by means of print, radio or television media or [(C)] (iii) by mail, telegraphy, telephone, computer data base, cable, optic, microwave or other communication system, for the purpose of effecting retail sales of tangible personal property, provided one hundred or more retail sales from outside this state to destinations within this state are made during the twelve-month period ended on the September thirtieth immediately preceding the monthly or quarterly period with respect to which liability for tax under this chapter is determined; [(f)] (F) being owned or controlled, either directly or indirectly, by a retailer engaged in business in this state which is the same as or similar to the line of business in which the retailer so owned or controlled is engaged; [(g)] (G) being owned or controlled, either directly or indirectly, by the same interests that own or control, either directly or indirectly, a retailer engaged in business in this state which is the same as or similar to the line of business in which the retailer so owned or controlled is engaged; [(h)] (H) being the assignee of a person engaged in the business of leasing tangible personal property to others, where leased property of such person is situated within this state and such assignee has a security interest, as defined in subsection (37) of section 42a-1-201, in such property. A RETAILER WHO HAS CONTRACTED WITH A COMMERCIAL PRINTER FOR PRINTING AND DISTRIBUTION OF PRINTED MATERIAL SHALL NOT BE DEEMED TO BE ENGAGED IN BUSINESS IN THIS STATE BECAUSE OF THE OWNERSHIP OR LEASING BY THE RETAILER OF TANGIBLE OR INTANGIBLE PERSONAL PROPERTY LOCATED AT THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, THE SALE BY THE RETAILER OF PROPERTY OF ANY KIND PRODUCED OR PROCESSED AT AND SHIPPED OR DISTRIBUTED FROM THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, THE ACTIVITIES OF THE RETAILER'S EMPLOYEES OR AGENTS AT THE PREMISES OF THE COMMERCIAL PRINTER IN THIS STATE, WHICH ACTIVITIES RELATE TO QUALITY CONTROL, DISTRIBUTION OR PRINTING SERVICES PERFORMED BY THE PRINTER, OR THE ACTIVITIES OF ANY KIND PERFORMED BY THE COMMERCIAL PRINTER IN THIS STATE FOR OR ON BEHALF OF THE RETAILER.

Sec. 4. This act shall take effect July 1, 1996, and section 1 shall be applicable to taxable years commencing on or after January 1, 1996, and sections 2 and 3 shall be applicable to sales occurring on or after July 1, 1996.

Approved May 8, 1996. Effective July 1, 1996, and applicable as provided in section 4.

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