Connecticut § 12-217aaa - Accumulated research and development tax credits.

§ 12-217aaa. Accumulated research and development tax credits.

Sec. 12-217aaa. Accumulated research and development tax credits. (a) As used in this section, (1) “accumulated credits” means the amount of credits allowed, in accordance with the provisions of section 12-217n, that have not been taken through an applicant's last income year completed prior to the date of an application submitted as provided in subsection (b) of this section, (2) “commissioner” means the Commissioner of Economic and Community Development, and (3) “human capital investment” means the amount paid or incurred by a corporation on (A) job training which occurs in this state for persons who are employed in this state; (B) work education programs in this state, including, but not limited to, programs in public high schools and work education-diversified occupations programs in this state; (C) worker training and education for persons who are employed in this state provided by institutions of higher education in this state; (D) donations or capital contributions to institutions of higher education in this state for improvements or advancements of technology, including physical plant improvements; (E) planning, site preparation, construction, renovation or acquisition of facilities in this state for the purpose of establishing a child care center, as described in section 19a-77, in this state to be used primarily by the children of employees who are employed in this state; and (F) subsidies to employees who are employed in this state for child care to be provided in this state.

(b) The commissioner shall establish and administer a program to allow businesses in the state to utilize accumulated credits against the tax imposed under this chapter and chapter 219 in exchange for (1) capital projects, planned or underway, in the state that propose to (A) expand the scale or scope of such business, (B) increase employment at such business, or (C) generate a substantial return to the state economy, or (2) human capital investment. A business seeking to utilize accumulated credits under this section shall submit to the commissioner, on forms provided by the commissioner, an application that shall include, but not be limited to: (A) A detailed plan outlining the capital project or human capital investment, (B) the term of such project or investment, (C) the estimated costs of such project or investment, and (D) the amount of accumulated credits the business proposes it be allowed to utilize under this section. The commissioner shall perform an econometric analysis of each application and shall only approve an application if he or she determines that such project or investment will generate revenues for the state that exceed the amount of the accumulated credits proposed to be utilized. The amount of such accumulated credits shall be subject to confirmation, in accordance with the provisions of this title, by the Commissioner of Revenue Services in consultation with the commissioner.

(c) The commissioner shall determine, in consultation with the Commissioner of Revenue Services and the Secretary of the Office of Policy and Management, when such accumulated credits may be utilized by the business, provided the commissioner shall not approve the utilization of the accumulated credits until the capital project or human capital investment under subsection (b) of this section generates revenues for the state that exceed the amount of the accumulated credits proposed to be utilized.

(d) The total amount of accumulated credits used under this section, at full value, and the investments made under section 12-217bbb shall not exceed fifty million dollars in the aggregate.

(e) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section.

(f) Not later than February 1, 2019, and annually thereafter, the commissioner shall include in the annual report required under section 32-1m: (1) Information on the number of applications received and the number of applications approved under this section; (2) the status of the capital projects or human capital investments associated with such approved applications; (3) the amount of accumulated credits that are proposed to be utilized under this section; and (4) (A) the amount and type of state revenue generated in connection with each such capital project or human capital investment to date, and (B) the projected amount and type of such revenue for the five succeeding fiscal years after completion of such capital project or human capital investment.

(June Sp. Sess. P.A. 17-2, S. 701; P.A. 21-188, S. 1; P.A. 23-117, S. 7.)

History: June Sp. Sess. P.A. 17-2 effective October 31, 2017; P.A. 21-188 added Subsec. (a)(3) re definition of “human capital investment”, amended Subsec. (b) by designating existing provision re capital projects as new Subdiv. (1), adding new Subdiv. (2) re human capital investment and made conforming changes, effective July 1, 2021, and applicable to income years beginning January 1, 2021; P.A. 23-117 amended Subsec. (a)(3) by deleting Subpara. (G) re Individual Development Account Reserve Fund, effective June 27, 2023.