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Connecticut Public Acts 1996

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Substitute House Bill No. 5037

PUBLIC ACT NO. 96-144

AN ACT CONCERNING CHANGES TO THE HOSPITAL GROSS EARNINGS TAX, REINSTATING THE ELECTRONIC DATA PROCESSING TAX CREDIT, THE TAX CREDIT FOR MACHINERY AND EQUIPMENT EXPENDITURES FOR CERTAIN BUSINESSES, AND PERMITTING CARRY FORWARD OF THE DATA PROCESSING TAX CREDIT.

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

Section 1. Section 12-217t of the general statutes, as amended by section 35 of public act 95-160, is repealed and the following is substituted in lieu thereof:

(a) There shall be allowed as a credit against the tax imposed by CHAPTER 207, this chapter [and] chapter 208a, 209, 210, 211, OR 212 OR AGAINST THE TAX IMPOSED PURSUANT TO SECTION 12-202a in an amount determined under the provisions of subsection (b) of this section with respect to the personal property taxes paid during any income year, on electronic data processing equipment. [The credit shall be allowed against the tax imposed by chapter 207, 209, 210, 211 or 212 or the tax imposed pursuant to section 12-202a with respect to the personal property taxes paid for electronic data processing equipment in income years commencing on or after January 1, 1997.] For the purposes of this section "electronic data processing equipment" means computers, printers, peripheral computer equipment, bundled software and any computer-based equipment acting as a computer as defined under Section 168 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and any other such equipment reported as a Code 20 on the Personal Property Declaration as prescribed by the Secretary of the Office of Policy and Management pursuant to section 12-27.

(b) The amount allowed as a credit in any income year shall be the full amount of the tax on such electronic data processing equipment paid pursuant to section 12-71 or 12-80a, and as defined under Section 168 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, provided no credit shall be allowed for the payment of any interest or penalty on the tax.

(c) The credit provided for by this section shall be allowed [against the taxes imposed by this chapter and chapter 208a,] for any taxes owed on the grand list of October 1, 1994, [and against the taxes imposed by chapter 207, 209, 210, 211 or 212 or section 12-202a for any taxes owed on the grand list of October 1, 1996,] and each grand list annually thereafter or included in the list prescribed under section 12-80a for such grand list. Such credits shall first be used by the taxpayer against the corporation business tax under this chapter, if any, and then may be used against any tax paid by the taxpayer under the provisions of chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed upon a health care center under section 12-202a [as each such chapter or section becomes eligible for such credit.] The amount of credits allowable under this section in any tax year against the taxes imposed by chapter 207, 208, 208a, 209, 210, 211 or 212 or against the tax imposed on health care centers, under the provisions of section 12-202a, shall be allowable only after all other credits allowable against such taxes for such tax year have been applied.

(d) In the case of leased electronic data processing equipment, the lessee, not the lessor, shall be entitled to claim the credit allowed pursuant to this section if the lease by its terms or operation imposes on the lessee the cost of the personal property taxes on such equipment, provided the lessor and lessee may elect, in writing, that the lessor may claim the credit provided by this section. Such election shall be attached to the tax return filed by the lessor on which such credit is claimed.

(e) In the case of taxpayers filing a combined return pursuant to section 12-223a, the credit provided by this section shall be allowed on a combined basis, such that the amount of personal property taxes paid by such taxpayers with respect to such equipment may be claimed as a tax credit against the combined tax liability of such taxpayers as determined under this chapter. Credits available to taxpayers which are subject to tax under this chapter but not subject to tax under chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed on health care centers under the provisions of section 12-202a shall be used prior to credits of companies included in such combined return which are also subject to tax under said chapter 207, 208a, 209, 210, 211 or 212 or the tax imposed upon health centers pursuant to the provisions of section 12-202a.

(f) IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SECTION EXCEEDS THE SUM OF (1) THE CORPORATION BUSINESS TAX, IF ANY, AND (2) ANY TAXES IMPOSED BY CHAPTER 207, 208a, 209, 210, 211 OR 212 PAID BY THE TAXPAYER, AFTER ALL OTHER CREDITS ALLOWABLE AGAINST SUCH TAXES HAVE FIRST BEEN APPLIED, THEN ANY BALANCE OF THE CREDIT ALLOWABLE UNDER THIS SECTION REMAINING MAY BE TAKEN IN ANY OF THE FIVE SUCCEEDING INCOME YEARS.

Sec. 2. Section 12-263b of the general statutes is repealed and the following is substituted in lieu thereof:

There is hereby imposed on the hospital gross earnings of each hospital in this state a tax (1) at the rate of eleven per cent of its hospital gross earnings in each taxable quarter FOR TAXABLE QUARTERS COMMENCING PRIOR TO OCTOBER 1, 1996; (2) AT THE RATE OF NINE AND ONE-FOURTH PER CENT OF ITS HOSPITAL GROSS EARNINGS IN EACH TAXABLE QUARTER COMMENCING ON OR AFTER OCTOBER 1, 1996, AND PRIOR TO OCTOBER 1, 1997; (3) AT THE RATE OF EIGHT AND ONE-FOURTH PER CENT OF ITS HOSPITAL GROSS EARNINGS IN EACH TAXABLE QUARTER COMMENCING ON OR AFTER OCTOBER 1, 1997, AND PRIOR TO OCTOBER 1, 1998; (4) AT THE RATE OF SEVEN AND ONE-FOURTH PER CENT OF ITS HOSPITAL GROSS EARNINGS IN EACH TAXABLE QUARTER COMMENCING ON OR AFTER OCTOBER 1, 1998, AND PRIOR TO OCTOBER 1, 1999; (5) AT THE RATE OF SIX AND ONE-FOURTH PER CENT OF ITS HOSPITAL GROSS EARNINGS IN EACH TAXABLE QUARTER COMMENCING ON OR AFTER OCTOBER 1, [4m1999 [0m. Each hospital shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services under oath or affirmation of at least one of its principal officers, a return on forms prescribed or furnished by the Commissioner of Revenue Services, stating specifically the name and location of such hospital, and the amounts of its hospital gross earnings, its net revenue and its gross revenue for the calendar quarter ending the last day of the preceding month. Payment shall be made with such return.

Sec. 3. Section 2 of public act 95-306 is repealed and the following is substituted in lieu thereof:

Funds appropriated to the Department of Social Services for the fiscal [years] YEAR commencing July 1, 1995, and [July 1, 1996] ENDING JUNE 30, 1996, to the hospital assistance program account may be expended by the commissioner, in consultation with the Office of Policy and Management and the Office of Health Care Access, for grants to hospitals. Such grants shall be made on October fifteenth and April fifteenth of [each] said fiscal year. Any hospital may apply for such grant. The Commissioner of Social Services shall prescribe the form and manner of applications for such grants. The allocation of the appropriated funds among the applicant hospitals shall be determined by the commissioner based on the overall financial circumstances of each hospital as evidenced by the application and other information available to the commissioner. The commissioner shall make the allocation in a manner which, in the discretion of the commissioner, achieves the maximum benefit in securing the continuing financial viability of hospitals.

Sec. 4. Section 12-217o of the general statutes, as amended by section 33 of public act 95-160, is repealed and the following is substituted in lieu thereof:

There shall be allowed as a credit against the tax imposed on any corporation under this chapter with respect to any taxable year of such corporation commencing on or after January 1, 1997, (1) that has more than two hundred fifty full-time, permanent employees but not more than eight hundred full-time, permanent employees, an amount equal to five per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures or (2) that has not more than two hundred fifty full-time, permanent employees, an amount equal to ten per cent of the amount spent by the corporation on machinery and equipment acquired for and installed in a facility in this state, which amount exceeds the amount spent by such corporation during the preceding income year of the corporation for such expenditures. IN ADDITION, ANY AMOUNT SPENT (1) BY A CORPORATION WHOSE INCOME YEAR, FOR FEDERAL INCOME TAX PURPOSES, COMMENCES ON THE FIRST DAY OF JANUARY, FEBRUARY, MARCH, APRIL OR MAY, (2) ON MACHINERY AND EQUIPMENT ACQUIRED FOR AND INSTALLED IN A FACILITY IN THIS STATE, (3) DURING THAT PORTION OF ITS INCOME YEAR IN 1995 THAT EXPIRED ON MAY 31, 1995, SHALL BE DEEMED TO HAVE BEEN SPENT DURING ITS INCOME YEAR COMMENCING IN 1997 AND SHALL BE ADDED TO ANY AMOUNT ACTUALLY SPENT ON MACHINERY AND EQUIPMENT ACQUIRED FOR AND INSTALLED IN A FACILITY IN THIS STATE DURING ITS INCOME YEAR COMMENCING IN 1997, PROVIDED THE CREDIT PERCENTAGE TO WHICH SUCH CORPORATION SHALL BE ENTITLED FOR ITS INCOME YEAR COMMENCING IN 1997 SHALL BE BASED ON THE NUMBER OF FULL-TIME, PERMANENT EMPLOYEES DURING ITS INCOME YEAR COMMENCING IN 1997.

Sec. 5. This act shall take effect from its passage except that section 1 shall be applicable to income years commencing on or after January 1, 1995, and section 3 shall take effect July 1, 1996.

Approved May 29, 1996. Effective as provided in section 5.

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