The following listing provides information on a variety of select business incentives, some of which are tax credits or exemptions while others are non-tax incentives.

Qualifying corporations located in an Enterprise Zone (“EZ”) or other area designated as having EZ-level benefits (i.e., Enterprise Corridor Zones, Qualified Manufacturing Plants, Railroad Depot Zones, Contiguous Municipality Zones, Defense Plant Zones, and Manufacturing Plant Zones) are allowed a corporation business tax credit for ten years.

A qualifying corporation is a corporation incorporated after 1996 that is located in a zone and has:

• Less than 375 employees, at least 150 of whom are residents of the zone or the municipality where the zone is located and qualify under the federal Workforce Investment Act; or
• 375 or more employees, at least 40% of whom are residents of the zone or the municipality where the zone is located and qualify under the federal Workforce Investment Act.

The credit is equal to 100% of corporation business tax liability for the first three tax years of operation in the zone, and 50% of corporation business tax liability in the next five tax years of operation in the zone.

To apply, taxpayers must submit a pre-application questionnaire to the Department of Economic and Community Development (“DECD”). Upon review of the pre-application questionnaire, DECD will contact the taxpayer to explain the program and the formal application process.

To capture this credit, Form UT-9, Claim for Corporate Business Tax Credit Under the Provisions of the Enterprise Zone Program, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

These credits cannot be carried back or forward. Furthermore, total corporation business tax credits (i.e., EZ credits and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Taxpayers that locate or expand a manufacturing facility in a Targeted Investment Community, an Enterprise Zone, or other area designated as having Enterprise Zone-level benefits (i.e., Enterprise Corridor Zones, Qualified Manufacturing Plants, Railroad Depot Zones, Contiguous Municipality Zones, Defense Plant Zones, and Manufacturing Plant Zones) may be allowed a credit for a portion of tax liability allocable to the facility for ten years. The credit is also allowed to certain service industries located in an Enterprise Zone (“EZ”).

To qualify for a 50% credit, the taxpayer must be located in an EZ or EZ-level benefit area (non-EZ Targeted Investment Community facilities do not qualify) and, during the last quarter of its income tax year, either 150 of its full-time positions, or 30% of its full-time positions directly attributable to the manufacturing facility, must be held by employees who at the time of employment were:

• Residents of the EZ or EZ-level benefit area; or
• Residents of the municipality and eligible for training under the federal Workforce Investment Act.

If the above employment criteria are not met, the taxpayer will receive a credit of 25% of corporation business tax liability allocable to the facility.

To apply, taxpayers must submit an Urban Jobs/EZ questionnaire to the Department of Economic and Community Development (“DECD”). Upon review of the questionnaire, DECD will contact the taxpayer to discuss the formal application process.

To capture the credit, Form UT-9, Claim for Corporate Business Tax Credit Under the Provisions of the Enterprise Zone Program, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

These credits cannot be carried back or forward. Furthermore, total corporation business tax credits (i.e., EZ credits and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

A full sales and use tax exemption applies to sales of replacement parts for machinery to any business located in an Enterprise Zone (“EZ”) for use within the EZ. To receive this benefit, an exemption certificate may need to be issued by the purchaser.

There is no sunset date for this credit.

Taxpayers that acquire, construct, substantially renovate, or expand a manufacturing facility located in an Enterprise Zone (“EZ”), Targeted Investment Community or distressed municipality may be allowed an 80% exemption in the five years following the assessment year in which the acquisition, construction, or renovation is completed. The exemption is also allowed to many service industries if the facility is located in an EZ. A manufacturing facility with an SIC code of 2833 or 2834 and at least 1,000 full-time employees may be allowed an exemption for an additional five years.

To obtain an eligibility certificate, taxpayers must submit the Urban Jobs/EZ questionnaire to the Department of Economic and Community Development (“DECD”). Upon review of the questionnaire, DECD will contact the taxpayer to discuss the formal application process.

To claim the exemption, a taxpayer must submit an application to the municipal assessor by November 1 of the assessment year.

There is no sunset date for this credit.

Insurance companies, banking companies and investment companies located in the Hartford Insurance and Financial Services Export Zone that conduct all their business with non-United States persons are allowed an income tax exemption on income attributable to exempt activities conducted in the zone and a sales tax exemption on purchases of goods and services.

To be eligible, a company must be headquartered and conduct substantially all of its exempt activities in the United States in the Zone.

Under this program, an exempt banking company is a majority-owned subsidiary of a bank, out-of-state bank or foreign bank that is not authorized to make loans, borrow money or conduct non-exempt business in the United States. An exempt insurance company must only insure risks outside the United States. An exempt investment company is either:

• A mutual fund investment company that has a principal business of which is trading in stocks or securities for its own account and whose customers are non-United States persons; or
• A mutual fund management company that develops, services and manages mutual funds for non-United States persons or exempt mutual fund investment companies.

The income tax credit is equal to 100% of income derived from business activities with non-United States persons. The sales and use tax exemption is 100% of the tax on purchases of goods and services.

At the time of filing incorporation or qualification to do business as a foreign corporation documents, the company must submit a statement to the Secretary of State confirming eligibility to elect exempt status. To continue to capture the credit, exempt companies must file an annual declaration with the epartment of Revenue Services.

There is no sunset date for this credit.

Digital Animation Production Credit

A nonrefundable business corporation tax credit is allowed to certified digital animation production companies that incur production expenses and costs. To be eligible production expenses and costs must exceed $100,000.

Certified digital animation production companies incurring production expenses or costs:

• Between $100,000 and $500,000 are eligible for a 10% credit;
• Between $500,000 and $1 million are eligible for 15% credit; and
• Over $1 million are eligible for 30% credit.

Total credits for all taxpayers cannot exceed $15 million per fiscal year.

To apply, interested parties should submit an application to the Department of Economic and Community Development.

To capture the credit, a taxpayer must file Form CT-1120K, Business Tax Credit Summary, with the taxpayer's return.

The credit may be carried forward for three years but may not be carried back. In addition, credits may be transferred up to three times. Transferees may only claim the credit in the income year in which the production expenses were incurred.

Taxpayers claiming the credit cannot claim the film and digital video production credit. Furthermore, total corporation business tax credits (i.e., production credits and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Urban and Industrial Site Reinvestment Credit

A corporation business tax credit is allowed for investments in eligible urban reinvestment projects or eligible industrial site investment projects.

An eligible industrial site investment project must be located on environmentally contaminated property, which if remediated will generate new economic activity, employment and tax revenue. An eligible urban reinvestment project must add significant new economic activity, increase employment in a new facility and generate significant additional tax revenues. It must be also be located in a community that has an Enterprise Zone, is a distressed community, has a population of more than 100,000, or is a municipality that is connected with the relocation of an out-of-state operation or the expansion of an existing facility that will result in a capital investment by a company of at least $50 million.

To qualify for the credit, a taxpayer must make an investment:

• Directly of at least $5 million (may be met alone or in combination with other taxpayers);
• Directly of at least $2 million if the project involves preservation of an historic structure and redevelopment of the facility for mixed uses includes at least four housing units (may be met alone or in combination with other taxpayers);
• Through a fund if the fund has a total asset value of at least $60 million for the income year in which the initial credit is taken and not less than three investors who are not related persons; or
• Through a community development entity.

The reinvestment credit is claimed over ten years as follows, up to $100 million per project:

• 0% in the investment year and the two succeeding income years;
• 10% of investment in years four through seven; and
• 20% of investment in years eight through ten.

To apply, an application to the Department of Economic and Community Development must be submitted.

Form CT-1120 USIR, Urban and Industrial Site Reinvestment Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return to capture the credit. The credit can be carried forward for five years but cannot be carried back. Furthermore, these credits may be transferred. If the total amount of credits claimed on a project exceeds the total sum of revenues generated by the project, credits may be subject to recapture.

Manufacturing facility and service facility credits cannot also be claimed with respect to the same investment. In addition, credits may only be claimed by the entity that earned the credit.
Total corporation business tax credits (i.e., reinvestment credits and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

There is no sunset date for this credit.

Green Building Credit

For income years beginning in 2012 and after, a corporation business tax credit for the construction or renovation of buildings that meet certain energy and environmental standards is allowed. Building must use no more than 70% of the energy permitted by the state building code for new construction, or 80% of the energy permitted by the state energy code for renovation or rehabilitation. In addition, the building must use equipment and appliances that meet "Energy Star" standards, if applicable, for such things as refrigerators, dishwashers, and washing machines. If a development project consists of more than one building, only those buildings that meet these standards will be eligible for the credit. Newly constructed buildings must receive a certificate of occupancy in 2010 or thereafter.

The base credit for new construction or major renovation (but not other site improvements) that receives a gold rating under the Leadership in Energy and Environmental Design (“LEED”) rating system is 8% of allowable costs. For a platinum rating, the base credit is 10.5% of allowable costs. For core and shell or commercial interior projects, the base credit is 5% of allowable costs for a gold rating and 7% for a platinum rating. An additional credit of 0.5% of allowable costs is available if the project is:

• A mixed use development;
• Is located in an Enterprise Zone or brownfield;
• Does not require a sewer line extension of more than one-eighth mile; or
• Is located within walking distance of a public bus service or within one-half mile of adequate rail, light rail, streetcar, or ferry service.

Interested taxpayers must submit an initial credit voucher, eligibility certificate and credit application required. An application fee of up to $10,000 may be required.

Green building credits may be carried forward for five years but may not be carried back. The credits may be transferred or assigned.

There is no sunset date for this credit.

Neighborhood Assistance Program Credit

A corporation business tax credit is allowed to taxpayers that make cash contributions of at least $250 to neighborhood assistance programs that have been approved by the Department of Revenue Services (“DRS”). With the exception of contributions to an open space acquisition fund, the taxpayer's contribution during a taxable year must equal or exceed the taxpayer's charitable contributions in the prior year. A list of organizations approved to receive contributions is available from DRS.

The credit is equal to up to 60% of the contribution or up to 100% of contributions to certain energy conservation programs. The maximum credit is $75,000 per year. The total credits for all taxpayers are limited to $5 million per fiscal year.

To apply, a taxpayer must submit Form NAA-02, Connecticut Neighborhood Assistance Act Business Application, to DRS between September 15 and October 1. If approved, DRS will issue an approval letter that indicates the approved credit amount.

To capture the credit, Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit cannot be carried forward but may be carried back for two years. Taxpayers claiming the credit cannot claim any other credit with respect to the same contribution.

Total corporation business tax credits (i.e., the Neighborhood Assistance Program credit and any other corporation business tax credit) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Land Donation Credit

A corporation business tax credit is allowed to taxpayers that donate:

• Open space land to the state, a political subdivision of the state or a non-profit land conservation organization to be permanently preserved as protected open space; or
• Any land to a town, city, borough, or school district for the purpose of schools and related facilities.

The credit is equal to 50% of the value of donated land.

To capture the credit, Form CT-1120 DL, Donation of Land Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

Credits may be carried forward as follows:

• Open space donation - 25 years for income years after 2008; or
• School donation: 15 years.

Credits may not be carried back. Credits may only be claimed by the entity that earned the credit. Total corporation business tax credits (i.e., the land donation credit and any other corporation business tax credit) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

There is no sunset date for this credit.

Housing Program Contribution Credit

A corporation business tax credit is allowed for cash contributions of at least $250 to housing programs sponsored, developed, or managed by non-profit corporations that benefit low and moderate-income persons.

The credit may be up to 100% of contribution.

To participate in the program, a taxpayer must submit an application to the Connecticut Housing Finance Authority (“CHFA”). Upon verification that the contribution has been made, CHFA will issue a tax credit voucher that lists the approved credit amount.

To capture the credit, Form CT-1120HPC, Housing Program Contribution Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The housing program contribution credit can be carried forward or back for five years. Taxpayers cannot claim the housing contribution credit and the neighborhood assistance credit for the same contribution. In addition, credits may only be claimed by the entity that earned the credit. Total corporation business tax credits (i.e., the Housing Program Contribution credit and any other corporation business tax credit) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

There is no sunset date for this credit.

Human Capital Investment Credit

Taxpayers are allowed a corporation business tax credit for expenditures made for the following types of human capital investment:

• In-state job training for persons employed in Connecticut;
• Work education programs in Connecticut, including programs in public high schools and work education-diversified occupation programs;
• Worker training and education of persons employed in Connecticut provided by Connecticut institutions of higher learning;
• Donations or capital contributions to Connecticut institutions of higher learning for improvements or advancements of technology, including physical plant improvements;
• Planning, site preparation, construction, renovation, or acquisitions of facilities in the state for the purpose of establishing a day care facility to be used primarily by the children of Connecticut employees;
• Child care subsidies paid to Connecticut employees for child care provided in Connecticut; or
• Contributions to the Individual Development Account Reserve Fund.

This credit is equal to 5% of expenditures incurred and may be captured by filing Form CT-1120 HCIC, Human Capital Investment Credit, and Form CT-1120K, Business Tax Credit Summary, with the taxpayer's return.

The credit can be carried forward for five years but may not be carried back. Taxpayers claiming the credit cannot claim any other credit for the same expenditures. Total corporation business tax credits (i.e., the investment credit and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Computer Donation Credit

A corporation business tax credit is allowed to taxpayers that donate new or used (no more than two years old) computers to a local or regional board of education or a public or nonpublic school. To be eligible, the taxpayer and the school or board of education must enter into a written agreement in which the school or board accepts the computers, and the taxpayer acknowledges that the computers are in good working condition and agrees to install and provide training on the computers.

The credit for these donations is 50% of the fair market value of the computers, up to $75,000 per year. The total amount of credits for all taxpayers cannot exceed $1 million per fiscal year.

To capture the credit, the taxpayer must submit Form CT-CDC, Computer Donation Credit Application, to the Department of Revenue Services along with a copy of the written agreement between the taxpayer and the school. Form CT-1120K, Business Tax Credit Summary, must also be filed with a taxpayer's return.

These credits may not be carried forward or back. The credits may only be claimed by the entity that earned the credit. Total corporation business tax credits (i.e., the computer donation credit and any other corporation business tax credits) cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

There is no sunset date for this credit.

Historic Structure Rehabilitation Credit

A corporate business tax credit is allowed to property owners rehabilitating certified historic structures for residential use. A certified historic structure is commercial or industrial property that is: (1) listed on the National or State Register of Historic Places; or (2) located in a district listed on the National or State Register of Historic Places and certified by the Connecticut Commission on Culture and Tourism as contributing to the historic character of the district. Qualified rehabilitation expenditures must exceed 25% of the assessed valuation of the structure.

The credit is equal to the lesser of 25% of the estimated qualified rehabilitation expenditures or 25% of actual qualified rehabilitation expenditures, up to $2.7 million for residential rehabilitations and up to $5 million for commercial/residential rehabilitations. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

Taxpayers seeking this credit must submit a rehabilitation plan and an estimate of rehabilitation expenditures to the Connecticut Commission on Culture and Tourism (“CCT”) prior to beginning rehabilitation work. CCT will issue a tax credit voucher following completion of the work and verification of compliance with the rehabilitation plan. Form CT-1120 HRC, Historic Rehabilitation Credit, the credit voucher issued by CCT, and Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return.

The credit may be carried forward for five years but may not be carried back. Credits earned by multiple owners of certified historic structures pass through to partners, members, or owners, pro rata or pursuant to an agreement among them documenting an alternative distribution method without regard to other tax or economic attributes of such entity.

There is no sunset date for this credit.

Historic Homes Rehabilitation Credit

A corporation business tax credit is allowed to owners rehabilitating an historic home and other taxpayers making contributions to qualified rehabilitation expenditures of an eligible historic home. A historic home must: (1) contain one to four dwelling units, at least one of which will be occupied by the owner as a principal residence for at least five years following completion of rehabilitation; (2) be located in a designated census tract in which at least 70% of families have a median income of 80% or less than statewide median income; a state designated and federally approved area of chronic economic distress; or an urban and regional center as identified in the Connecticut Conservation and Development Policies Plan; and (3) be listed on the National or State Register of Historic Places; or located in a district listed on the National or State Register of Historic Places and certified by the Connecticut Commission on Culture and Tourism (“CCT”) as contributing to the historic character of the district. The qualified rehabilitation expenditures must exceed $25,000.

The credit is equal to the lesser of 30% of projected rehabilitation expenditures or 30% of actual rehabilitation expenditures, up to $30,000 per dwelling unit. Total credits for all taxpayers cannot exceed $3 million per fiscal year. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To apply, the property owner must submit a rehabilitation plan and an estimate of rehabilitation expenditures to the CCT prior to beginning rehabilitation work. CCT will issue a tax credit certificate following completion of work and verification of compliance with the rehabilitation plan.

To capture the credit, taxpayers must file Form CT-1120 HHR, Historic Homes Rehabilitation Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return.

The credit can be carried forward for four years but may not be carried back. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Historic Investment Tax Credit

A corporation business tax credit is allowed to property owners that rehabilitate certified historic structures for mixed residential/nonresidential use, if at least 33% of total square footage is placed in service for residential use. A certified historic structure is commercial or industrial property that is: (1) listed on the National or State Register of Historic Places; or (2) located in a district listed on the National or State Register of Historic Places and certified by the Connecticut Commission on Culture and Tourism (“CCT”) as contributing to the historic character of the district. Qualified rehabilitation expenditures must exceed 25% of the assessed valuation of the structure.

If affordable housing is not included, then the credit amount is the lesser of 25% of estimated qualified rehabilitation expenditures or 25% of actual qualified rehabilitation expenditures. If at least 20% percent of the units are rental units that qualify as affordable housing or at least 10% of the units are individual homeownership units that qualify as affordable housing, then the credit amount is the lesser of 30% of estimated qualified rehabilitation expenditures or 30% of actual qualified rehabilitation expenditures. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To apply, a taxpayer must submit a rehabilitation plan and an estimate of rehabilitation expenditures to the CCT prior to beginning rehabilitation work. If applying for the 30% credit, certification from the Department of Economic and Community Development that the project complies with affordable housing requirements must also be submitted to CCT. CCT will issue a tax credit voucher following completion of the work and verification of compliance with the rehabilitation plan.

To capture the credit, Form CT-1120 HI, Historic Investment Tax Credit, the credit voucher issued by CCT, and Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return.

The credit can be carried forward for five years but may not be carried back. Credits may be transferred. Furthermore, a credit earned by multiple owners of certified historic structures passes through to partners, members, or owners, pro rata or pursuant to an agreement among them documenting an alternative distribution method without regard to other tax or economic attributes of such entity.

There is no sunset date for this credit.

Motion Picture and Digital Media Infrastructure Project Credit

A nonrefundable corporation business tax credit is allowed to taxpayers that invest in state-certified infrastructure projects to provide basic buildings, facilities, or installations needed for the functioning of the digital media and motion picture industry in the state. Projects must have a minimum expenditure amount of $3 million.

The credit is equal to 20% of the investment. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

The entity undertaking the project must submit an application to the DECD for certification of the project within 90 days after the first expenditures are incurred. If approved, a certification letter to investors will be issued. Credit vouchers will not be issued to taxpayers until project is 100% complete.

To capture the credit, Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return.

The credit can be carried forward for three years but may not be carried back. Credits may be transferred up to three times. Transferees must claim the credit in an income year in which expenditures were made by the taxpayer for the infrastructure project. This credit may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Fixed Capital Investment Credit

Taxpayers that make new fixed capital investments are allowed a corporation business tax credit in the year in which the investment is made. "Fixed capital" is tangible personal property that: (1) has a class life in excess of four years; (2) is acquired by purchase from a person other than a related person; (3) is not acquired to be leased and is not leased during the 12 months following its acquisition; and (4) will be held and used in Connecticut by a taxpayer for five years after acquisition. The term does not include inventory, land, building structures, or mobile transportation property.

The credit is equal to 5% of the investment cost. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 FCIC, Fixed Capital Investment Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit can be carried forward for five years but cannot be carried back. Taxpayers claiming the credit cannot claim any other credits for the same acquisition. Furthermore, credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Machinery and Equipment Expenditures Credit

Businesses with no more than 800 full-time permanent employees whose compensation is paid in Connecticut are allowed a corporation business tax credit for increases in expenditures incurred for machinery and equipment installed at a Connecticut facility. The credit is based on amounts spent on machinery and equipment without regard to dispositions, reductions for the original tax cost or adjusted tax basis of disposed assets, or consideration received for disposed assets. Furniture and fixtures, automobiles or other property used for transportation, and custom software are not considered machinery or equipment. Canned software qualifies if preloaded on machinery on which it is used.

For businesses with between 251 and 800 full-time permanent employees in Connecticut, the credit is equal to 5% of the amount by which the taxpayer's expenditures on machinery and equipment during the taxable year exceed the preceding tax year's expenditures. For businesses with up to 250 full-time, permanent Connecticut employees, the credit is equal to 10% of the amount by which the taxpayer's expenditures on machinery and equipment during the taxable year exceed the preceding tax year's expenditures. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 MEC, Machinery and Equipment Expenditure Credit, schedules listing machinery and equipment expenditures and verification of the number of full-time employees, and Form CT-1120K, Business Credit Summary, must be filed with the taxpayer's return.

The credit may not be carried back or forward. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Hiring Incentive Credit

A corporation business tax credit is allowed to taxpayers that hire an individual who is and has been receiving Temporary Family Assistance for more than nine months. The number of employees for whom the credit is allowed is based on number of Connecticut employees:

• Taxpayers with 1 to 249 Connecticut employees may receive a credit for up to five employees;
• Taxpayers with 250 to 499 Connecticut employees may receive a credit for up to 10 employees;
• Taxpayers with 500 or more Connecticut employees may receive a credit for up to 25 employees; and
• Taxpayers with more than one Connecticut business location may receive a credit for five employees per location regardless of number of employees.

The credit is equal to $125 for each month a qualifying employee worked. Total amount of credits for all taxpayers cannot exceed $1 million per fiscal year. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To apply, taxpayers must submit an application to the Connecticut Department of Labor between July 1 and December 31 to receive reservation approval to hire an eligible TFA recipient.

To capture the credit, Form CT-1120 HIC, Hiring Incentive Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with a taxpayer's return.

The credit may be carried forward for five years but may not be carried back. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Qualified Small Business Job Creation Tax Credit Program

Connecticut provides incentives for small businesses to hire additional full-time employees between May 6, 2010 and January 1, 2013.

All types of qualifying businesses are eligible for the credit. It may be claimed by C corporations, shareholders of S corporations or partners in entities treated as partnerships for federal income tax purposes. An owner of a single member limited liability company that is disregarded as an entity separate from its owner may claim the credit.

The amount of the credit is $200 per month for each new employee hired. The new employee must reside in Connecticut and be hired after May 6, 2010, to fill a new full time job in which he or she is required to work at least 35 or more hours per week for not less than 48 weeks in a calendar year during the income years beginning on or after January 1, 2010, and prior to January 1, 2013.

To be eligible to claim the credit, the qualified small business must apply to the Department of Economic and Community Development. If approved, DECD will issue a certification letter to the qualified small business indicating that the credit will be available to be claimed.

The new employee cannot have been employed in Connecticut during the prior 12 months by any related entity.

A credit cannot be claimed for:

• A new temporary employee;
• A new employee hired for a seasonal job;
• Any new employee who is an owner, member, or partner in the qualified small business;
• A new employee for whom credit will be claimed against any tax under another statutory provision; or
• A new employee who is not employed at the close of the income year of the qualified small business.

The qualified small business must claim and use the credit in the income year in which the new employee is hired and, if eligible, the two immediately succeeding income years provided the new employee is still employed at the close of the income year of the qualified small business. The credit is not refundable and any tax credit not used in the income year will expire.

Click Here for the credit application

Vocational Rehabilitation Job Creation Tax Credit Program

The Vocational Rehabilitation Job Creation Tax Credit is a monthly $200 credit for each new qualifying employee hired by a Connecticut employer.  The new hire must reside in Connecticut, and is required to work at least 20 hours or more per week for no less than 48 weeks per calendar year. 

A new qualifying employee is defined as a person:

• Receiving vocational rehabilitation services from the Bureau of Rehabilitation Services within the Department of Social Services or from the Board of Education and Services for the Blind, and
• Hired by the employer to fill a new job after May 6, 2010, during the employer's income years beginning on or after January 1, 2010.

The new employee must not have been employed in Connecticut during the 12 month period prior to commencing employment by any of the following:

• A corporation, limited liability company, partnership, association, or trust controlled by the qualified small business;
• An individual, corporation, limited liability company, partnership, association, or trust in control of the qualified small business;
• A corporation, limited liability company, partnership, association, or trust controlled by an individual, corporation, limited liability company, partnership, association, or trust in control of the qualified small business; or
• A member of the same controlled group as the qualified small business.

A credit cannot be claimed for:

• Any new qualifying employee who is an owner, member, or partner in the business of the employer;
• A new qualifying employee for whom credit may be claimed against any tax under another statutory provision; or
• A new qualifying employee who is not employed at the close of the income year of the employer.

This credit is administered by DECD and is applicable to taxable years beginning on or after January 1, 2010.  Upon approval, DECD will issue a certification letter to the employer indicating that the credit will be available to be claimed.

To be eligible to claim the credit, the employer must apply to DECD.  Upon approval, DECD will issue a certification letter indicating that the credit will be available to be claimed.  The employer must claim and use the credit in the income year in which the new employee is hired and, if eligible, the two immediately succeeding income years provided the new employee is still employed at the close of the income year.  The credit may be claimed by shareholders of partners if the qualified small business is a pass through entity.

  This credit is nonrefundable.

Displaced Worker Credit

A corporation business tax credit is allowed to taxpayers that hire displaced workers. The credit is allowed in the tax year during which the displaced worker first completes 12 full months of full-time employment with the taxpayer. A “displaced worker" is an individual formerly employed in Connecticut whose position was terminated by a former employer as a direct result of a business restructuring in which the positions of at least 10 individuals employed in Connecticut by the employer were terminated. The displaced worker's wages or salary for the first 12 months of employment with the taxpayer must be at least 75% of his or her previous annual wages or salary. The term does not include an individual whose former employer is, or was at the time of termination of the position, a related business with respect to the taxpayer.

The credit is equal to $1,500 per displaced worker hired. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 DW, Displaced Worker Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may not be carried forward or back. Taxpayers cannot claim the displaced worker credit and the displaced electric worker credit with respect to the same employee. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

New Jobs Creation Credit

Taxpayers that create at least ten new full-time jobs in the state may be allowed a corporation business tax credit for each new employee for up to five years. New jobs are jobs that did not exist in the state prior to the taxpayer's submission of an eligibility certificate application to the Department of Economic and Community Development (“DECD”).

The credit is up to 60% of state income tax withheld from the wages of new employees. Total credits for all taxpayers cannot exceed $10 million per fiscal year. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. A percentage of the credit is subject to recapture if the number of new employees decreases to less than the number on the eligibility certificate during any of the first four years following the first full income year after eligibility certificate issuance and those employees are not replaced with new employees.

To apply, taxpayers must submit an eligibility certificate application to DECD.

To capture the credit, Form CT-1120 NJC, New Jobs Creation Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

This credit may not be carried forward or back. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Employment Expansion Project Pass-Through Entity Credit Allowance

A corporation that holds an interest in a "sponsor" (i.e., a partnership, limited partnership, limited liability company or other entity treated as a pass-through entity for federal income tax purposes) of an approved employment expansion project is entitled to its distributive share of any corporation business tax credit that the corporation would have received had the corporation itself conducted the business conducted by the sponsor during the income year. "Employment expansion project" is a project: (1) that will result in the creation of at least 400 new full-time jobs in Connecticut within the five income years following the income year in which the project begins; (2) for which the allowance of pass-through credits to constituent corporations is necessary to attract the project to the state; (3) that is economically viable and will generate economic benefits for the state; and (4) is consistent with strategic economic development priorities of the state and municipality.

The amount of the credit is corporation's pro rata share of credit earned by the sponsor.

To apply, the taxpayer must submit an application to the Department of Economic and Community Development.

Taxpayers seeking to claim this credit should contact the Department of Revenue Services for proper reporting methods.

A corporation with an interest in a sponsor may assign any a credit to another corporation with an interest in the same sponsor.

There is no sunset date for this credit.

Service Facility Credit

Taxpayers that hire at least 300 new full-time employees at a new or expanded service facility that is located in a Targeted Investment Community but not in an Enterprise Zone are allowed a corporation business tax credit for a portion of tax liability allocable to the expanded facility. "New jobs" include jobs shifted from outside Connecticut but not jobs shifted from within the state. The total number of new employees cannot exceed the total increase in the taxpayer's employment in Connecticut. An increase in employment is the difference between the number of employees employed in Connecticut at the time of application for the credit and the highest number of employees employed by the taxpayer in Connecticut in the preceding year.

The credit is a percentage of corporation business tax liability allocable to the facility based on number of new employees at the facility:

• For taxpayers with 300 to 599 new employees, the credit is 15% of the tax liability allocable to the facility;
• For taxpayers with 600 to 899 new employees, the credit is 20% of the tax liability allocable to the facility;
• For taxpayers 900 to 1,199 new employees, the credit is 25% of the tax liability allocable to the facility;
• For taxpayers with 1,200 to 1,499 new employees, the credit is 30% of the tax liability allocable to the facility;
• For taxpayers with 1,500 to 1,999 new employees, the credit is 40% of the tax liability allocable to the facility; and
• For taxpayers with 2,000 or more new employees, the credit is 50% of the tax liability allocable to the facility.

To apply, a taxpayer must submit the Urban Jobs/Enterprise Zone questionnaire to the Department of Economic and Community Development (“DECD”). Upon review of the questionnaire, the DECD will contact the taxpayer to discuss the formal application process.

To capture the credit, Form CT-1120 SF, Service Facility Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

This credit may not be carried forward or back. If a taxpayer ceases to qualify as a service facility or ceases to occupy the property, the credit terminates. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Electronic Data Processing Equipment Credit

A business corporation tax or unrelated business income tax credit is allowed for Connecticut personal property tax paid during the income year on electronic data processing equipment, including computers, printers, peripheral equipment, bundled software, any computer-based equipment acting as a computer (as defined under IRC Sec. 168), and any other equipment reported as Code 20 on the Personal Property Declaration. If the equipment is leased, the lessee may claim the credit (or may elect to allow the lessor to claim the credit) if the underlying lease, by its terms or operation, imposes on the lessee the cost of the personal property tax on the equipment.

The credit is equal to 100% of Connecticut personal property tax paid on electronic data processing equipment. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 EDPC, Electronic Data Processing Equipment Property Tax Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may be carried forward for five years but may not be carried back. The credit may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Incremental Research and Experimental Expenditures Credit

A corporation business tax credit is allowed for increases in incremental research and experimental expenditures (as defined in IRC §174) conducted in Connecticut.

The credit is equal to 20% of the amount by which research and experimental expenditures in Connecticut in the current income year exceed research and experimental expenditures in the preceding income year.

To capture the credit, Form CT-1120 RC, Research and Experimental Expenditures Credit, and CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may be carried forward for 15 years but may not be carried back. A qualified small business (i.e., an entity with gross income in the previous year that did not exceed $70 million and that has not met the gross income test through transactions with a related person) that cannot claim the credit because it has no tax liability (not including minimum tax or capital base tax) may carry forward the credit or it may obtain a refund of 65% of credit value (up to $1.5 million).

There is no sunset date for this credit.

Non-incremental Research and Development Expenditures Credit

A corporation business tax credit is allowed for research and development expenses incurred in Connecticut. "Research and development expenses" are expenses that may be deducted under IRC §174 (as in effect on May 28, 1993) and basic research payments as defined in IRC §41 if the expenditures are incurred for research and experimentation and basic research conducted in Connecticut and not funded (as provided in IRC §41(d)(4)(H)) as in effect on May 28, 1993) by any person or governmental entity other than the taxpayer or a person included on a combined return with the taxpayer.

The credit percentage is based, in part, on the amount of R&D expenses incurred:

• For taxpayers with expenses of $50 million or less, the credit is equal to 1% of expenditures;
• For taxpayers with more than $50 million but no more than $100 million, the credit is equal to $500,000 plus 2% of expenses over $50 million;
• Companies headquartered in an Enterprise Zone with 2,500 or more employees and revenues in excess of $3 billion may elect to compute the credit based on 3.5% of research and development expenses;
• The credit allowed to a qualified small business (i.e., a business with gross income in the previous year that did not exceed $100 million and that has not met the gross income test through transactions with a related person) is 6% of expenses;

Taxpayers that incur more than $200 million in R&D expenses in an income year must reduce credit amount by specified percentages if workforce reductions exceed a certain level.

To capture the credit, Form CT-1120 RDC, Research and Development Credit, Form CT-1120K, Business Tax Credit Summary, and certain attachments must be filed with the taxpayer's return.

This credit may be carried forward indefinitely but may not be carried back. Taxpayers that also claim the research and experimental expenditures credit or the credit for research and development grants to institutions of higher education cannot claim the credit for the same expenditures.

There is no sunset date for this credit.

Research and Development Credit for Grants to Institutions of Higher Education

A corporation business tax credit is allowed for the incremental increase in amounts spent by a taxpayer on grants to a Connecticut institution of higher learning for the purposes of research and development related to advancements in technology. "Research and development related to advancements in technology" means development of new products or new uses for existing products and improving methods for producing products. The term does not include testing or inspection for quality control purposes; efficiency surveys, management studies, consumer surveys, or other market research; advertising or promotional activities; or research in connection with literary, historical, or similar projects.

The credit is equal to 25% of the amount by which qualifying grants made in the current income year exceed the average qualifying grants made in the three immediately preceding income years. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 GC, Tax Credit for Research and Development Grants to Institutions of Higher Education, and Form 1120-K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may not be carried forward or back. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Small Business Guaranty Fee Credit

Small businesses are allowed a corporation business tax credit for guaranty fees paid to the federal Small Business Administration to obtain guaranteed financing.

The credit is equal to Amount of guarantee fee. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax.

To capture the credit, Form CT-1120 SBA, Small Business Guaranty Fee Tax Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may be carried forward for four years but may not be carried back. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Financial Institutions Credit

Financial institutions that build and occupy a facility of at least 900,000 square feet and create and maintain an average of 1,200 to 2,000 qualified employees at the facility are allowed a corporation business tax credit for ten years. A credit for an additional five years may be allowed if the taxpayer employs an average of 3,000 persons in the income year following the ten-year period.

A qualified employee is an individual whose compensation is paid in Connecticut and who works an average of at least 35 hours per week for at least eight weeks as: (1) an employee or independent contractor of the financial institution or a related person; or (2) an employee or principal of a company other than the financial institution or a related person if the company derives at least 80% of its gross revenues from the financial institution or a related person.

The credit is equal to:

• 30% of corporation business tax liability, up to $72 million over the ten-year period, if the average number of employees is 1,200 to 1,599;
• 40% of corporation business tax liability, up to $96 million over the ten-year period, if average number of employees is 1,600 to 1,999;
• 50% of corporation business tax liability, up to $120 million over the ten-year period, if average number of employees is 2,000 or more; and
• 25% of corporation business tax liability in years 11 through 15, up to $145 million over the 15-year period.

To apply, the taxpayer must submit a proposal to the Department of Economic and Community Development.

To capture the credit, Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

Taxpayers claiming the credit cannot claim the fixed capital credit. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Apprenticeship Training Credit in Manufacturing, Plastics, Plastics-Related, or Construction Trades

A corporation business tax credit is available to taxpayers that employ apprentices who are receiving training in manufacturing, plastics, plastics-related, or construction trades. Taxpayers claiming the credit must have a qualified apprenticeship training program that is at least 4,000 hours (two years) and no more than 8,000 hours (four years) and has been certified by the Connecticut Department of Labor and registered with the Connecticut State Apprenticeship Council. Construction trade apprenticeships must be at least four years. Each apprentice must be employed full-time (at least 120 hours per month).

The credit for manufacturing, plastics, and plastics-related trades is $4 per number of apprentice work hours worked by each apprentice during the year, up to the lesser of 50% of the actual wages paid or $4,800 per eligible apprentice.

The credit for construction trades is $2 per number of apprentice hours worked by each apprentice over the first four income years of the apprenticeship, up to the lesser of 50% of the actual wages paid to each apprentice in the income year or $4,000.

To apply, taxpayers should contact the Department of Labor to obtain an Apprenticeship Tax Credit Worksheet and a Monthly Worksheet. Completed worksheets must be submitted to the Department of Labor.

To capture the credit, Form CT-1120K, Business Credit Summary, must be filed with the taxpayer's return.

This tax credit may not be carried forward or back. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Film and Digital Media Production Credit

Production companies are allowed a nonrefundable corporation business tax credit for production expenses and costs incurred in Connecticut in the development, preproduction, production, or post production or a qualified film or digital media production. To qualify, production expenses and costs must exceed $100,000 and 50% of principal photography days or 50% of postproduction expenditures must be in state. No out-of-state expenses or costs are allowed to be considered.

The tax credit is based on the production company’s production expenses or costs. If the costs are between $100,000 and $500,000, the taxpayer is eligible for a credit equal to 10% of the qualified costs. If the costs are between $500,000 and $1 million, the taxpayer is eligible for a credit equal to 15% of the qualified expenses. If the costs are over $1 million, the taxpayer is eligible for a credit equal to 30% of the qualified costs.

To apply, taxpayers must submit an application to the Department of Economic and Community Development no later than 90 days after the first production expenses are incurred.

To capture the credit, Form CT-1120 FP, Film Production Tax Credit, and Form CT-1120K, Business Tax Credit Summary, must be filed with the taxpayer's return.

The credit may be carried forward for three years but may not be carried back. Credits may be transferred up to three times. Total corporation business tax credits cannot exceed 70% of tax due prior to application of credits and cannot be applied against the minimum tax. Credits may only be claimed by the entity that earned the credit.

There is no sunset date for this credit.

Sales Tax Incentives

Solar Energy Equipment Exemption

A full Exemption applies to sales of solar energy electricity generating systems, passive or active solar water or space heating systems, and geothermal resource systems, including related equipment and installation services. Exemption certificate may be required.

There is no sunset date for this credit.

Pollution Control Facility Exemption

Exemption applies to sales of tangible personal property acquired for incorporation into or used and consumed in the operation of air pollution control facilities or facilities that treat industrial waste before discharge into state waters or sewerage system emptying into state waters.

Eligibility – Facility must be certified by the Commissioner of Environmental Protection.

Exemption certificate may be required.

There is no sunset date for this credit.

Property Tax Incentives

Manufacturing Machinery and Equipment Tax Phase-Out

Tax on new and newly-acquired manufacturing machinery and equipment that is at least 6 years old and thus not eligible for the 5-year exemption is being phased out. The phaseout also applies to machinery and equipment used in connection with biotechnology or production of motion pictures, video, and sound recordings. The phaseout is not applicable to machinery and equipment used in connection with recycling, but the full exemption applies to recycling machinery and equipment for assessment years beginning on or after October 1, 2011.

Eligibility – Eligible machinery and equipment must be claimed on the owner's federal income tax return as 5-year or 7-year property, and must be used predominantly in: (1) manufacturing, processing, or fabricating; (2) research and development (including laboratory or experimental research and development), design, or engineering directly related to manufacturing; (3) for the significant overhauling or rebuilding of other products on a factory basis; (4) for measuring or testing or for metal finishing; or (5) the production of motion pictures, video, and sound recordings.

Tax is imposed as follows:
• assessment year beginning October 1, 2006: 20% exempt;
• assessment year beginning October 1, 2007: 40% exempt;
• assessment year beginning October 1, 2008: 60% exempt;
• assessment year beginning October 1, 2009: 80% exempt;
• assessment year beginning October 1, 2010: 100% exempt.

Submit an application to the municipal assessor by November 1 of the assessment year.

There is no sunset date for this credit.

Machinery and Equipment Acquired as Part of Technological Upgrade Exemption

New machinery and equipment used directly in manufacturing may be exempted for up to 5 years if acquired by the business as part of a technological upgrading of the manufacturing process at a facility in a distressed community, Targeted Investment Community, or Enterprise Zone.

Eligibility – Business must have been in continuous operation in the state for at least 5 years, had gross receipts of at least $20 million in the previous year, and incurred costs acquiring the machinery and equipment of the greater of $200,000 or 200% of the business' average expenditures for the acquisition of manufacturing machinery and equipment at the facility.

Up to 50% exempt.

To obtain an eligibility certificate, submit the Urban Jobs/Enterprise Zone questionnaire to the Department of Economic and Community Development. Upon review of the questionnaire, DECD will contact the taxpayer to discuss the formal application process.

To claim the exemption, submit an application to the municipal assessor by November 1 of the assessment year.

There is no sunset date for this credit.

Urban Reinvestment Project/Industrial Site Reinvestment Project Abatement

Municipalities may abate tax for up to 5 years on property that part of an urban reinvestment project or industrial site reinvestment project, if the project is eligible for the urban reinvestment project/industrial site reinvestment project corporation business tax credit, and the property does not qualify for any other property tax abatement.

Up to 50% of increased valuation resulting from the remediation, construction or development.

To apply, Contact the Department of Economic and Community Development.

There is no sunset date for this credit.

Environmental Remediation Abatement

Municipalities may agree to abate tax on property that has been subject to a spill, if the property owner agrees to undertake environmental site reassessment, demolition, and remediation that is necessary to redevelop the property. Abatement may be allowed for as long as the property is being remediated but no longer than 7 years.

Municipalities may also forgive all or a portion of the principal and interest due on delinquent property taxes for the benefit of any prospective purchaser who has obtained an environmental investigation or remediation plan approved by the Commissioner of Environmental Protection, or a licensed environmental professional, and completes a remediation plan at an establishment deemed by the municipality to be abandoned.

Up to 100% abatement.

To apply, Contact the municipality.

There is no sunset date for this credit.

Vanpool Vehicle Exemption

Vehicles used to provide employee vanpool service are fully exempt. To apply, Submit an application to the municipal assessor.

There is no sunset date for this credit.

Pollution Control Equipment Exemption

A full Exemption applies to structures and equipment acquired for the purpose of reducing, controlling, or eliminating air or water pollution.

Eligibility – Structures and equipment must be certified by the Commissioner of Environmental Protection.

Submit an application for certification to the Commissioner of Environmental Protection.

Commissioner of Environmental Protection certification must be filed with the local assessor by November 1 of the assessment year.

There is no sunset date for this credit.

Solar Energy System Exemption

Municipalities may exempt active, passive, or hybrid solar heating, cooling, or electricity systems for up to 15 years. Exemption applies to the amount by which the assessed valuation of the property with the solar energy system exceeds the valuation at which the property would be assessed if equipped with a conventional heating or cooling system.

Submit an application to the municipal assessor by November 1 of the assessment year.

There is no sunset date for this credit.

Historical Property Abatement

Municipalities may authorize full or partial abatements on structures of historical or architectural merit.

Eligibility – The municipality may determine which structures will qualify, or it may delegate the determination to local private preservation or architectural bodies. Abatement may be allowed to the property owners if they can show that the current level of taxation is a material factor that threatens the continued existence of the structure, necessitating either its demolition or remodeling in a manner that destroys its historical or architectural value.
To apply, contact the local municipality.
Recapture: If an abatement is granted and the structure is subsequently demolished or remodeled in a way that destroys its architectural or historical value, the property owner must pay all taxes that had been abated.
There is no sunset date for this credit.

Fixed Assessment Agreements

Municipalities may enter into agreements with taxpayers that propose to locate in the municipality to fix the assessment on real property and proposed improvements, or on personal property at a manufacturing facility, for up to 7 years.

Eligibility – Fixed assessment agreements are allowed if the improvement is for: office, retail, permanent or transient residential, manufacturing, warehousing, storage, distribution, multilevel parking in connection with mass transit, information technology, recreation, or transportation facilities.

Assessment may be fixed for up to:
• the entire increased assessment for up to 7 years if cost of improvements is at least $3 million;
• the entire increased assessment for up to 2 years if cost of improvements is at least $500,000; or
• 50% of increased assessment for up to 3 years if cost of improvements is at least $25,000.

Contact the municipality.

There is no sunset date for this credit.

Vessel Exemption

Commercial fishing vessels and any watercraft capable of being used as transportation are exempt.
Submit an application to the municipal assessor.

There is no sunset date for this credit.

Information Technology Exemption

Municipalities may authorize abatements on information technology personal property. Contact the municipality.

There is no sunset date for this credit.

Rehabilitation Area Tax Deferral

Municipalities may designate rehabilitation areas and agree to fix the assessment of property if the property owner agrees to rehabilitate or construct multifamily rental housing or cooperative housing. Assessment may be fixed during the period of rehabilitation or construction for up to 7 years, and upon completion of rehabilitation or construction, assessment increases attributable to the rehabilitation may be deferred for up to 11 years.

Eligibility – Municipalities may establish eligibility requirements.

Assessment if fixed during construction or rehabilitation. 100% of increase deferred for the first year following completion of rehabilitation or construction. In the following years, a minimum of 10% of the increase is assessed each year until 100% of the increase has been assessed.

Contact the municipal assessor.

There is no sunset date for this credit.

Service Facility Exemption

Taxpayers that invest at least $20 million to acquire, construct, substantially renovate, or expand a service facility that is located in a Targeted Investment Community but outside an Enterprise Zone may be allowed an exemption for up to 5 years

Based on the amount of investment in the facility:
• $20 million to $39 million: 40% of valuation.
• More than $39 million to $50 million: 50% of valuation.
• More than $50 million to $79 million: 60% of valuation.
• More than $79 million to $90 million: 70% of valuation.
• More than $90 million: 80% of valuation.

To obtain an eligibility certificate, submit the Urban Jobs/Enterprise Zone questionnaire to the Department of Economic and Community Development. Upon review of the questionnaire, DECD will contact the taxpayer to discuss the formal application process.

To claim the exemption, submit an application to the municipal assessor by November 1 of the assessment year.

Exemption may be allowed for an additional 5 years to a financial institution with at least 4,000 qualified employees.

There is no sunset date for this credit.

Farm Property Abatement

Municipalities may abate tax on land used for a commercial dairy farm, fruit orchard (including vineyards), vegetable farm, nursery farm, tobacco farm, any farm that employs nontraditional methods such as hydroponic farming, or lobstering business operating on maritime heritage land.

Up to 50% abatement.

If interested, contact the municipality.

There is no sunset date for this credit.

Agricultural Use Value Assessment

Farmland is assessed at its use value for agricultural purposes. Apply for farmland classification with the municipal assessor within 30 days before or after the assessment list date, or within 90 days after assessment list date in a general revaluation year,

There is no sunset date for this credit.

Agricultural Exemptions

Farm machinery (other than motor vehicles) owned by farmers with at least $15,000 in annual gross income or expenses is exempt up to a value of $100,000 (horses and ponies included in this amount). Municipalities may authorize an exemption for an additional $100,000 in machinery and equipment and may also authorize exemptions for buildings used in farming. (Conn. Gen. Stat. §12-91)

Livestock is exempt, except horses and ponies are only exempt up to a value of $1,000 unless used in farming. Farm produce is exempt if held by the producer or by an agricultural cooperative. (Conn. Gen. Stat. §12-81(39), (40), (41), (42), (44), (68))

Up to $500 in farm tools or fishing apparatus is exempt if used exclusively in the taxpayer's business. Municipalities may authorize additional exemptions.

Submit an application to the municipal assessor.

There is no sunset date for this credit.

Food Manufacturing Plant Abatement

Municipalities may fully abate tax, interest, and delinquent taxes on a food manufacturing plant that is at least 100 acres and served by a regional sewer system whose treatment facility is in an adjacent town.

Interested parties should contact the municipality.

There is no sunset date for this credit.

Communications Establishment Exemption

Municipalities may authorize abatements on real and personal property owned by a communications establishment included in SIC major group 48.

Up to 100% abatement.

To apply, Contact the municipality.

There is no sunset date for this credit.

Financing Tax Incentives

Connecticut Development Authority Direct Loans

Direct loans and mezzanine investments to businesses that maintain or create employment. Loans may be used for term working capital; machinery and equipment; purchase, construction, expansion, or upgrading facilities; mortgage of owner-occupied property; and Brownfield remediation and redevelopment.

Eligibility – Borrower must create or retain at least 1 job for each $20,000 in Connecticut Development Authority Assistance.

Residential and non-owner occupied real estate projects, retail and service businesses, and non-profit organizations are not eligible.

$250,000 to $5 million. Term is up to 20 years. Interest varies depending on the assistance requested.
Submit an application to the CDA. CDA urges applicants to discuss the project with a CDA loan officer prior to submitting an application.

There is no sunset date for this credit.

Connecticut Recovery Zone Economic Development Bonding Program

As part of the federal government's economic stimulus efforts, Connecticut is receiving authorization to issue up to $90 million in bonds for shovel-ready governmental purpose construction projects within “Recovery Zones” to be designated throughout the state. The issuer receives a 45% direct pay interest subsidy on the taxable bonds which must be used for a “Qualified Economic Purpose”. The program will be jointly administered by the Connecticut Development Authority and the Department of Economic and Community Development.

The allocation of bond proceeds will be made in the specified municipalities and counties. To apply these bonds to state projects, a bond allocation from an existing state program or project bond authorization would be necessary.

Contact the CDA to apply.

There is no sunset date for this credit.

Connecticut Recovery Zone Facility Bonding Program

As part of the federal government's economic stimulus efforts, Connecticut is receiving $135 million in private activity bond volume cap for shovel-ready construction projects within “Recovery Zones” to be designated throughout the state. The federal funds are separate from the the state's overall private activity bond cap. The program will be jointly administered by the Connecticut Development Authority and the Department of Economic and Community Development. The bonds allocated to the state would be self-sustaining tax exempt revenue bonds issued by CDA under its existing authority as a conduit issuer. There would be no liability to the state.

Eligibility – The bond funds must support economic growth in the areas hardest hit by recession. Funds may be used to acquire depreciable property (not land). Public ownership of the facility is not required. Bond funds may not be used for residential rental projects or for refinancing old debt. The funds from these bonds may be combined with other programs such as URA grants, state grants and loans, sales tax exemptions and TIFs to leverage the benefits.
Contact the CDA to apply.

Sunset RZFB must be issued by January 1, 2011.

Connecticut Development Authority Guaranteed Loans

Loan guarantees to help private-sector lenders meet eligible borrowers' financing needs. Guaranteed loans may be used for term working capital; machinery and equipment; purchase, construct, expand, or upgrade facilities; mortgages on owner-occupied real property; performance guarantees; foreign trade or receivables finance; and Brownfield remediation and redevelopment.

Eligibility – Borrowers must be businesses that contribute to Connecticut's economic base and are unable to satisfy lender's standard loan underwriting criteria. Borrower must create or retain at least 1 job for each $20,000 in Connecticut Development Authority assistance.

Residential and non-owner occupied real estate projects, retail and service businesses, and non-profit organizations are not eligible.

Guarantees can cover up to 40% of losses on principal balance. Amount not specified. Term and interest are determined by lender.

Borrower must apply with commercial lender. Lender must submit credit analysis to CDA.

There is no sunset date for this credit.

Connecticut Development Authority Participating Loans

Participating loans with private-sector lenders to enable lenders to meet borrowers' financing needs. Loans may be used for term working capital; machinery and equipment; purchase, construct, expand, or upgrade facilities; mortgages on owner-occupied real property; and Brownfield remediation and redevelopment.

Eligibility – Borrowers must be businesses that contribute to Connecticut's economic base and are unable to satisfy lender's standard loan underwriting criteria. Borrower must create or retain at least 1 job for each $20,000 in Connecticut Development Authority assistance.

Residential and non-owner occupied real estate projects, retail and service businesses, and non-profit organizations are not eligible.

Participation up to 50% of principal balance. Term and interest are determined by lender.
Borrower must contact a commercial lender. Lender must contact CDA.

There is no sunset date for this credit.

Connecticut Innovations Clean Tech Fund

The Clean Tech Fund makes investments in seed and early-stage companies focused on innovations that conserve energy and resources, protect the environment, or eliminate harmful waste. Clean technology includes wind power, solar power, biomass, hydropower, biofuels, information technology, green transportation, electric motors, lighting, and energy efficiency technologies. It may also be seen as a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce or optimize the use of natural resources, and cut or eliminate emissions and wastes.

Eligibility – A business must have: a significant Connecticut presence; proprietary technology; a sustainable competitive advantage; management team experience sufficient for a seed stage company; a definable/addressable market; and defensible business plans.

A company may receive an investment of up to $1 million from the fund.

To apply, submit a Clean Tech Fund pre-application to CT Innovations. The pre-application is available on the website.

There is no sunset date for this credit.

Connecticut Innovations Seed Investment Fund

Seed funding to Connecticut-based emerging technology companies (other than bioscience companies). Investments are structured as equity (preferred stock), convertible debt, or debt with warrants depending on the individual circumstances.

Amount Up to $500,000.

Submit a Seed Fund pre-application to CT Innovations. The pre-application form is available on the website.

There is no sunset date for this credit.

Brownfield Revolving Loan Fund

Loans to encourage redevelopment of sites that have been contaminated with hazardous waste or petroleum by non-profit organizations, municipalities, or for-profit businesses.

Eligibility – Property must be enrolled in the Department of Environmental Protection Voluntary Cleanup Program. Applicants or owners may not be the responsible party of the contamination.

Loans are available to sites statewide, but priority is given to projects in distressed communities.

Up to 80% of project costs. Applicant must contribute at least 20% toward the project. Loans must be repaid within 7 years.

To apply, Contact the Office of Brownfield Remediation.

There is no sunset date for this credit.

Environmental Insurance Program Grants and Loans

Grants and loans to subsidize the cost of environmental insurance premiums. Amounts vary. To apply, Contact the Office of Brownfield Remediation. No sunset date.

Special Contaminated Property Remediation and Insurance Fund

Loans to municipalities, developers, and property owners for costs associated with investigations, remedial action plans, structure demolition, and remedial action activities.

Amount varies. Term is generally 5 years. Interest is below market rate.

To apply Contact the Department of Economic and Community Development prior to submitting an application.

There is no sunset date for this credit.

Urban Sites Remedial Action Program

Funding to facilitate the transfer, reuse, and redevelopment of potentially polluted commercial and industrial real property that otherwise would remain vacant and unproductive. Funds are intended as seed capital to expedite the project, and recovery of state funds committed to a project will be sought.

Eligibility – The Department of Economic and Community Development must determine that the property is significant to the state's economy. Type 1 (Economic Development Initiative) projects may be undertaken statewide. To be eligible, the owner or developer of the contaminated property must be willing and able to conduct the investigations and remediate the site. Type 2 (Unwilling or Unable Party) projects may be undertaken in Distressed Municipalities and Targeted Investment Communities. For Type 2 projects, the property owner either has not been identified or is unwilling or unable to perform the remediation.

To apply, Contact the Connecticut Office of Brownfield Remediation and Development.

There is no sunset date for this credit.

Brownfield Redevelopment Tax Increment Financing

Tax increment financing is available to developers and businesses that remediate and redevelop Brownfield sites. The Connecticut Development Authority sells bonds based on the amount of incremental tax revenue allocated to CDA, and provides the bond proceeds to the developer or business as a cash incentive to help offset remediation costs.

Determined by the municipality and CDA based on the net present value of a portion of the future incremental tax revenues expected to be generated by the project.

Exclusivity: TIF cannot be combined with municipal real estate tax abatements.

Contact CDA to apply.

There is no sunset date for this credit.

Brownfield Third-Party Liability Program

Property owners that remediate contaminated property are allowed liability protection regarding costs or damages to third parties (not including governmental bodies) exposed to pollution that existed before the property owner took title to the property.

Eligibility – The Commissioner of Environmental Protection must approve an investigation report regarding the pollution and its sources and a final remedial action report that shows the remediation was completed in accordance with state standards.
Contact the Office of Brownfield Remediation.

There is no sunset date for this credit.

Economic and Manufacturing Assistance Act Loans

Loans to finance projects with a strong economic development potential. Loans may be used for planning (including feasibility studies, engineering, appraisals, market studies, and related activities), acquisition of real property, machinery and equipment; construction and renovation of site and infrastructure improvements; building demolition; relocation expenses for purposes of assisting manufacturing or other economic-based businesses to locate construct, renovate, or acquire a facility; and business support services such as labor training, day care, energy conservation, pollution control, recycling, in conjunction with other state agencies.

Contact the Department of Economic and Community Development.

There is no sunset date for this credit.

Connecticut Development Authority Line of Credit to Term Loans

One-year line of credit that converts to a fully amortizable loan to fund capital expenditures costs above a bank's underwriting comfort level. Funds may be used for revenue-producing equipment, IT upgrades (including software, hardware, installation and other security-driven, high-speed infrastructure expenditures), and building expansion.

Eligibility – Borrower must create or retain 1 job for each $20,000 in Connecticut Development Authority assistance.

$250,000 to $1 million. Term determined by lender, up to 7 years.

Borrower must submit an application to commercial lender. Lender must submit an application to CDA.

There is no sunset date for this credit.

Connecticut Development Authority Economic Inducement Financing

Below market-rate loans to encourage companies to undertake significant expansion in, or relocate to, Connecticut. Loans may be used for any business purpose, including term working capital; machinery and equipment; purchase, construction, expansion, or upgrade of facilities; and mortgages on owner-occupied property.

Eligibility – Borrower must relocate or significantly expand in the state and contribute to the state's technology base, urban infrastructure, intellectual capital, tax revenues, economic base, employment, or export of products and services.

At least 1 job must be created or retained for each $20,000 in Connecticut Development Authority Assistance.

Up to $5 million. Term is up to 20 years.

To apply, contact the CDA.

There is no sunset date for this credit.

Connecticut Development Authority URBANK Loan Guarantees

Guarantees on loans to small Connecticut businesses in instances where the lender is unable to approve the borrower's loan request without URBANK assistance. Loan proceeds may be used for any business purpose including: working capital; machinery and equipment; and purchase, construct, expand, or upgrade facilities.

Eligibility – Residential and non-owner-occupied real estate projects are not eligible.
Loan protection of up to 44.5%. First-loss guarantee of 30% on loans to businesses located anywhere in Connecticut. Maximum loan amount is $500,000. Term up to 15 years. Borrower must contact a
commercial lender. Lender must contact CDA.

There is no sunset date for this credit.

Connecticut Development Authority Early Stage Loans

Direct loans and mezzanine financing to businesses that have the potential to contribute to the state's technology base, intellectual capital, economic base, employment, urban infrastructure, or tax revenues. Funds may be used for term working capital; machinery and equipment; purchase, construction, expansion, or upgrade of facilities; and mortgages on owner-occupied property.

Eligibility – Residential and non-owner occupied real estate projects, retail and service businesses, and non-profit organizations are not eligible.

Up to $5 million. Term is tailored to each transaction.

Submit an application to the Connecticut Development Authority.

There is no sunset date for this credit.

Connecticut Innovations Small Business Innovation Research (SBIR)

SBIR assistance includes: making presentations to groups; giving overviews to small businesses and entrepreneurs; proposal support; reviewing SBIR Phase I and Phase II proposals; access to 11 federal SBIR agencies; matchmaking; and hosting events. Federal grant funding covers the cost of the services.
Services are free of charge.

To apply, Contact Connecticut Innovations.

There is no sunset date for this credit.

Procurement Technical Assistance Program

Marketing and procurement assistance for Connecticut businesses interested in selling products and services to federal, state, and local governments.
Contact the Procurement Technical Assistance Program

There is no sunset date for this credit.

Connecticut Venture Group

Connecticut Venture Group helps high-growth emerging companies at various stages of growth connect with investors seeking investment opportunities. The organization produces technology-focused seminars and expositions, updates on financing and market trends, university tech transfer conferences, and the annual Crossroads Venture Fair.

Submit a Funding Application to the Connecticut Venture Group.

There is no sunset date for this credit.

Small Business Development Centers

Counseling, seminars, education, and technical assistance for small businesses. The SBDC is the result of a partnership between state universities and the U.S. Small Business Administration, the Department of Economic and Community Development, and the private sector.

Contact Connecticut Small Business Development Center.

There is no sunset date for this credit.

Connecticut Works

Connecticut Works is a collaboration of state, regional, and local organizations addressing the state's workforce development needs. Services offered to businesses include recruiting, job training, and related support.

For further information, contact the Business Services Unit of the local CT Works Center.

There is no sunset date for this credit.

Connecticut Innovations Bioscience Facilities Fund

Funding to assist biotechnology companies build wet laboratory and related space.

To apply, Submit a business plan and company profile form to Connecticut Innovations.

There is no sunset date for this credit.

Connecticut Innovations Eli Whitney Fund Investments

Investments in early-stage Connecticut-based technology companies that are undertaking key product development and marketing activities. Focuses on companies with products and innovations in bioscience, energy and environmental systems, information technology, photonics/applied optics, advanced materials, and engineering.

Varies. Fund typically invests up to $1 million.

Submit a business plan and company profile form to Connecticut Innovations.

There is no sunset date for this credit.

Connecticut Innovations Bioseed Fund

Investments in developmental stage bioscience companies that are working to solve unmet medical needs in the areas of pharmaceuticals, genomics, molecular science, biomedical engineering, and medical devices.

Varies. Fund typically invests up to $500,000.

Submit a business plan and company profile form to Connecticut Innovations.

There is no sunset date for this credit.

Connecticut Development Authority Technology-Intensive Financing

Direct and guaranteed loans and mezzanine financing for high-technology projects that have the potential to contribute to the state's technology base, intellectual capital, economic base, employment, urban infrastructure, tax revenues, or export of products or services. Funds may be used for term working capital; software, hardware, and infrastructure, machinery and equipment; and purchase, construction, or expansion of facilities.

Eligibility – The following businesses or projects are eligible: high-technology, information technology, communications businesses or incubators; hardware and software developers and manufacturers; "smart" buildings, laboratory, and research facilities; technology and communications infrastructure projects; technology-intensive facility developers, lessors, and lessees; and performance guarantees.

At least 1 job must be created or retained for each $20,000 in Connecticut Development Authority assistance.

Up to $5 million. Term is up to 20 years. Interest may be below market rate for projects that provide significant economic benefits to the state.

To apply, Contact CDA.

There is no sunset date for this credit.

Connecticut Development Authority Technology-Intensive Incentive

Tax increment financing is available to developers and businesses that construct, or significantly rehabilitate or upgrade, technology-intensive facilities in designated communities. The Connecticut Development Authority sells bonds based on the amount of incremental tax revenue allocated to CDA, and provides the bond proceeds to the developer or business as a cash incentive to invest in the project.

Determined by the municipality and CDA based on the net present value of a portion of the future incremental tax revenues expected to be generated by the project.

If interested, contact CDA.

Exclusivity: TIF cannot be combined with municipal property tax abatements.

There is no sunset date for this credit.

Connecticut Development Authority Industrial Revenue Bond Financing

Tax-exempt bond financing for: (1) the acquisition of capital assets directly related to manufacturing; (2) certain non-manufacturing facilities ancillary and related to manufacturing (limited to 25% of bond proceeds); and (3) other non-qualifying costs including the cost of bond issuance (may not exceed 5%).

Eligibility – Business must be eligible for tax-exempt bond financing under the IRC.

Up to 100% of project cost.

Interested parties should contact CDA.

There is no sunset date for this credit.

Small Business Innovation and Diversification Program

The CT SBIR Office at Connecticut Innovations is administering this program on a matching grant basis to enable firms to design and develop innovative technologies that diversify their portfolio of products thereby retaining/increasing sales and employment in the state.

Eligibility – Firms must (1) have a NAICS Code of 311111-339999 for manufacturing companies; (2) provide at least 3 years historical financial information; (3) have established operations in Connecticut and remain in the state for 10 years once the grant is received; and (4) have less than 500 employees.

Each eligible firm will have the opportunity to submit and win one proposal per year. The maximum acceptable duration of a project is 9 months.

Grants average between $5,000 and $25,000. Companies will partner with the program by providing a 1:1 match. Awards under the program are contingent upon the availability of funds.

Submit applications to the CT SBIR Office. The review process includes independent reviews and a possible site visit.

There is no sunset date for this credit.

Naugatuck Valley Revolving Loan Fund

Loans to manufacturers and eligible wholesale distributors in Naugatuck Valley communities. Loans may be used for purchase of land, buildings, machinery and equipment, and construction, renovation, and rehabilitation

If interested, Contact the Department of Economic and Community Development.

There is no sunset date for this credit.

Connecticut State Technology Extension Program (CONNSTEP)

Provides consulting services to small and mid-sized manufacturers. CONNSTEP offers cost-effective solutions for growth and operational efficiency to help manufacturers become more competitive.

To apply, contact CONNSTEP.

There is no sunset date for this credit.

Connecticut Innovations Pre-Seed Support Services

Assistance for Connecticut-based technology companies, including intellectual property reviews, technology reviews, business plan development and reviews, market analysis, and market entry strategies.

Submit a Pre-Seed Services pre-application to CT Innovations. The pre-application form is available on the website.

There is no sunset date for this credit.

Dry Cleaning Establishment Remediation Fund

Grants are available to dry cleaning businesses for the assessment, cleanup, containment, or mitigation of pollution resulting from dry cleaning chemicals. The grants may also be used for measures undertaken to prevent such pollution, and for providing potable drinking water when necessary.

Up to $300,000. All dry cleaning establishments are responsible for the first $10,000 in costs for a given project.

Reimbursement for approved expenses is subject to available program funding.

Submit an application to the Connecticut Department of Economic and Community Development.

There is no sunset date for this credit.