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Substitute Senate Bill No. 509

PUBLIC ACT NO. 96-265

AN ACT EXEMPTING CERTAIN COMMERCIAL MOTOR VEHICLES FROM PROPERTY TAX AND CONCERNING THE APPORTIONMENT OF NET INCOME OF MOTOR CARRIERS.

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

Section 1. Section 12-81 of the general statutes, as amended by section 9 of public act 95-283, is amended by adding subdivision (74) as follows:

(NEW) (74) (a) For a period not to exceed five full assessment years following the assessment year in which it is purchased, any new commercial truck, truck tractor, tractor and semitrailer, and vehicle used in combination therewith, which is used exclusively to transport freight for hire and (A) is either (1) subject to the jurisdiction of the United States Department of Transportation pursuant to Chapter 135 of Title 49, United States Code, or (2) would otherwise be subject to said jurisdiction except for the fact that the vehicle is used exclusively in intrastate commerce; (B) has a gross vehicle weight rating in excess of twenty-six thousand pounds; and (C) prior to August 1, 1996, was not registered in this state or in any other jurisdiction but was registered in this state on or after said date. As used in this subdivision, "gross vehicle weight rating" shall have the same meaning as in section 14-1, as amended.

(b) Any person who on October first in any year holds title to a vehicle for which he intends to claim the exemption provided in this subdivision shall file with the assessor or board of assessors in the municipality in which the vehicle is subject to property taxation, on or before the first day of November in such year, a written application claiming such exemption on a form prescribed by the Secretary of the Office of Policy and Management. Such person shall include information as to the make, model, year and vehicle identification number of all such vehicles, and any appurtenances attached thereto, in such application. The person holding title to any vehicle for which exemption is claimed shall furnish the assessor or board of assessors with such supporting documentation as said secretary may require, including, but not limited to, evidence of vehicle use and registration. With respect to any vehicle for which the exemption under this subdivision has previously been claimed, the person shall also include information as to any modifications made to the vehicle subsequent to the assessment date with respect to which said exemption was previously claimed. Failure to file such application in this manner and form within the time limit prescribed shall constitute a waiver of the right to such exemption for such assessment year, unless an extension of time is allowed by the Secretary of the Office of Policy and Management as provided in section 12-81k of the general statutes, as amended by section 2 of this act, and upon payment of the required fee for late filing.

(c) The assessor or board of assessors shall determine the value for each vehicle with respect to which a claim for exemption under this subdivision is made, in accordance with sections 12-71b and 12-71d of the general statutes. In the event the provisions of section 12-71b of the general statutes become applicable to any such vehicle, the tax collector shall reflect the reduction or addition to the amount of revenue loss with respect to such vehicle, on the next claim for reimbursement the tax collector files pursuant to section 12-94b of the general statutes, as amended by section 3 of this act.

Sec. 2. Section 12-81k of the general statutes, as amended by section 4 of public act 95-307, is repealed and the following is substituted in lieu thereof:

Whenever any person claiming the exemption from property tax under the provisions of subdivisions (59), (60), (70) [and] (72) AND (74) of section 12-81 AS AMENDED BY SECTION 1 OF THIS ACT has failed to file a claim with the assessor or board of assessors as required in said subdivisions, the Secretary of the Office of Policy and Management, upon receipt of a written request from such person may allow an extension of time not exceeding thirty days within which such claim may be filed, provided whenever an extension of time is so allowed, such person shall pay a fee for late filing to the municipality in which the property, with respect to which such claim is submitted, is situated. A written request for an extension of the filing period must be received by the Secretary of the Office of Policy and Management within thirty days following the prescribed date by which the assessor or board of assessors must complete their duties. Said fee shall be calculated as follows: If the assessed value of the property with respect to which such claim is submitted is one hundred thousand dollars or less, said fee shall be fifty dollars; if the assessed value of the property with respect to which such claim is submitted is greater than one hundred thousand dollars but less than two hundred fifty thousand dollars, said fee shall be one hundred fifty dollars; if the assessed value of the property with respect to which such claim is submitted is equal to or greater than two hundred fifty thousand dollars but less than five hundred thousand dollars, said fee shall be two hundred fifty dollars; if the assessed value of the property with respect to which such claim is submitted is equal to or greater than five hundred thousand dollars, said fee shall be five hundred dollars.

Sec. 3. Section 12-94b of the general statutes, as amended by section 16 of public act 95-283 and section 5 of public act 95-307, is repealed and the following is substituted in lieu thereof:

(a) On or before July first, annually, commencing July 1, 1992, the tax collector of each municipality shall certify to the Secretary of the Office of Policy and Management, on a form furnished by said secretary, the amount of tax revenue which such municipality, except for the provisions of [subdivision] SUBDIVISIONS (72) AND (74) of section 12-81, AS AMENDED BY SECTION 1 OF THIS ACT would have received, together with such supporting information as said secretary may require. SAID SECRETARY MAY REEVALUATE ANY VEHICLE INCLUDED IN SUCH CLAIM WHEN, IN HIS JUDGMENT, THE VALUATION IS INACCURATE. Said secretary shall review each [such] claim and, not later than the November first next succeeding the deadline for the receipt of such claims, shall notify each municipality of his acceptance [or] modification OR DENIAL of such claim. Any municipality aggrieved by the action of the secretary under the provisions of this section may appeal therefrom to the superior court for the judicial district of Hartford-New Britain pursuant to section 12-39l. The secretary shall, on or before December first, annually, certify to the Comptroller the amount due each municipality under the provisions of this section, including any modification of such claim made prior to December first, and the Comptroller shall draw his order on the Treasurer on or before the fifteenth day of December following and the Treasurer shall pay the amount thereof to such municipality on or before the thirty-first day of December following. If any modification is made as the result of the provisions of this section on or after the December first following the date on which the tax collector has provided the amount of tax revenue in question, any adjustments to the amount due to any municipality for the period for which such modification was made shall be made in the next payment the Treasurer shall make to such municipality pursuant to this section. "Municipality" as used herein means each town, city, borough, consolidated town and city and consolidated town and borough and each district, as defined in section 7-324.

(b) If the Secretary of the Office of Policy and Management denies reimbursement to a municipality for machinery and equipment OR A COMMERCIAL MOTOR VEHICLE which has been approved for exemption [under this section] by the assessor or board of assessors UNDER SUBDIVISION (72) OR (74) OF SECTION 12-81, AS AMENDED BY SECTION 1 OF THIS ACT, the person who filed written application for such exemption may, within one month of receiving notice from said municipality of the denial of such reimbursement, make application in the nature of an appeal to the superior court of the judicial district in which the manufacturing facility is located OR THE COMMERCIAL MOTOR VEHICLE IS SUBJECT TO PROPERTY TAXATION. Such application shall be accompanied by a citation to the secretary to appear before said court, and shall be served and returned in the same manner as is required in the case of a summons in a civil action. The pendency of such appeal shall not suspend any action by the municipality to collect property taxes from the applicant on the machinery and equipment OR THE COMMERCIAL MOTOR VEHICLE that is the subject of the appeal. The authority issuing the citation shall take from the applicant a bond or recognizance to the state of Connecticut, with surety, to prosecute the application in effect and to comply with the orders and decrees of the court in the premises. Such applications shall be preferred cases, to be heard, unless cause appears to the contrary, at the first session, by the court or by a committee appointed by the court. Said court may grant such relief as may be equitable and, if the application is without probable cause, may tax double or triple costs, as the case demands; and, upon all applications which are denied, costs may be taxed against the applicant at the discretion of the court, but no costs shall be taxed against the state.

Sec. 4. Section 12-218 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Any taxpayer which is taxable both within and without this state shall apportion its net income as provided in this section. For purposes of apportionment of income under this section, a taxpayer is taxable in another state if in such state such taxpayer conducts business and is subject to a net income tax, a franchise tax for the privilege of doing business, or a corporate stock tax, or if such state has jurisdiction to subject such taxpayer to such a tax, regardless of whether such state does, in fact, impose such a tax.

(b) The net income of the taxpayer, when derived from business other than the manufacture, sale or use of tangible personal or real property, shall be apportioned within and without the state by means of an apportionment fraction, the numerator of which shall represent the gross receipts from business carried on within Connecticut and the denominator shall represent the gross receipts from business carried on everywhere, except that any gross receipts attributable to an international banking facility, as defined in section 12-217, shall not be included in the numerator or the denominator. Gross receipts as used in this subsection shall have the same meaning as used in subdivision (3) of subsection (c) of this section.

(c) The net income of the taxpayer when derived from the manufacture, sale or use of tangible personal or real property, shall be apportioned within and without the state by means of an apportionment fraction, to be computed as the sum of the property factor, the payroll factor and twice the receipts factor, divided by four. (1) The first of these fractions, the property factor, shall represent that part of the average monthly net book value of the total tangible property held and owned by the taxpayer during the income year which is held within the state, without deduction on account of any encumbrance thereon, and the value of tangible property rented to the taxpayer computed by multiplying the gross rents payable during the income year or period by eight. For the purpose of this section, gross rents shall be the actual sum of money or other consideration payable, directly or indirectly, by the taxpayer or for its benefit for the use or possession of the property, excluding royalties, but including interest, taxes, insurance, repairs or any other amount required to be paid by the terms of a lease or other arrangement and a proportionate part of the cost of any improvement to the real property made by or on behalf of the taxpayer which reverts to the owner or lessor upon termination of a lease or other arrangement, based on the unexpired term of the lease commencing with the date the improvement is completed, provided, where a building is erected on leased land by or on behalf of the taxpayer, the value of the land is determined by multiplying the gross rent by eight, and the value of the building is determined in the same manner as if owned by the taxpayer. (2) The second fraction, the payroll factor, shall represent the part of the total wages, salaries and other compensation to employees paid by the taxpayer during the income year which was paid in this state, excluding any such wages, salaries or other compensation attributable to the production of gross income of an international banking facility as defined in section 12-217. Compensation is paid in this state if (A) the individual's service is performed entirely within the state; or (B) the individual's service is performed both within and without the state, but the service performed without the state is incidental to the individual's service within the state; or (C) some of the service is performed in the state and (i) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or (ii) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state. (3) The third fraction, the receipts factor, shall represent the part of the taxpayer's gross receipts from sales or other sources during the income year, computed according to the method of accounting used in the computation of its entire net income, which is assignable to the state, and excluding any gross receipts attributable to an international banking facility as defined in section 12-217, but including receipts from sales of tangible property if the property is delivered or shipped to a purchaser within this state, other than a company which qualifies as a Domestic International Sales Corporation (DISC) as defined in Section 992 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 as to which a valid election under Subsection (b) of said Section 992 to be treated as a DISC is effective, regardless of the f.o.b. point or other conditions of the sale, receipts from services performed within the state, rentals and royalties from properties situated within the state, royalties from the use of patents or copyrights within the state, interest managed or controlled within the state, net gains from the sale or other disposition of intangible assets managed or controlled within the state, net gains from the sale or other disposition of tangible assets situated within the state and all other receipts earned within the state.

(d) Any motor bus company which is taxable both within and without this state shall apportion its net income derived from carrying of passengers for hire by means of an apportionment fraction, the numerator of which shall represent the total number of miles operated within this state and the denominator of which shall represent the total number of miles operated everywhere, but income derived by motor bus companies from sources other than the carrying of passengers for hire shall be apportioned as herein otherwise provided.

(e) ANY MOTOR CARRIER WHICH TRANSPORTS PROPERTY FOR HIRE AND WHICH IS TAXABLE BOTH WITHIN AND WITHOUT THIS STATE SHALL APPORTION ITS NET INCOME DERIVED FROM CARRYING OF PROPERTY FOR HIRE BY MEANS OF AN APPORTIONMENT FRACTION, THE NUMERATOR OF WHICH SHALL REPRESENT THE TOTAL NUMBER OF MILES OPERATED WITHIN THIS STATE AND THE DENOMINATOR OF WHICH SHALL REPRESENT THE TOTAL NUMBER OF MILES OPERATED EVERYWHERE, BUT INCOME DERIVED BY MOTOR CARRIERS FROM SOURCES OTHER THAN THE CARRYING OF PROPERTY FOR HIRE SHALL BE APPORTIONED AS HEREIN OTHERWISE PROVIDED.

[(e)] (f) The provisions of this section shall not apply to insurance companies.

Sec. 5. This act shall take effect from its passage, except that sections 1 to 3, inclusive, shall take effect October 1, 1996, and shall be applicable to assessment years commencing on or after October 1, 1996, and section 4 shall be applicable to income years commencing on or after January 1, 1996.

Approved June 10, 1996. Effective as provided in section 5.

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