Sec. 12-214. Imposition of tax. Surcharge.
Sec. 12-214. Imposition of tax. Surcharge. (a)(1) Every mutual savings bank,
savings and loan association and every company engaged in the business of carrying
passengers for hire over the highways of this state in common carrier motor vehicles
doing business in this state, and every other company carrying on, or having the right
to carry on, business in this state, including a dissolved corporation which continues to
conduct business, except those companies described in subdivision (2) of this subsection, shall pay, annually, a tax or excise upon its franchise for the privilege of carrying
on or doing business, owning or leasing property within the state in a corporate capacity
or as an unincorporated association taxable as a corporation for federal income tax
purposes or maintaining an office within the state, such tax to be measured by the entire
net income as herein defined received by such corporation or association from business
transacted within the state during the income year and to be assessed for each income
year commencing prior to January 1, 1995, at the rate of eleven and one-half per cent,
for income years commencing on or after January 1, 1995, and prior to January 1, 1996,
at the rate of eleven and one-quarter per cent, for income years commencing on or after
January 1, 1996, and prior to January 1, 1997, at the rate of ten and three-fourths per
cent, for income years commencing on or after January 1, 1997, and prior to January 1,
1998, at the rate of ten and one-half per cent, for income years commencing on or after
January 1, 1998, and prior to January 1, 1999, at the rate of nine and one-half per cent,
for income years commencing on or after January 1, 1999, and prior to January 1, 2000,
at the rate of eight and one-half per cent, and for income years commencing on or after
January 1, 2000, at the rate of seven and one-half per cent. The exemption of companies
described in subparagraphs (G) and (H) of subdivision (2) of this subsection shall not
be allowed with respect to any income year of any such company commencing on or
after January 1, 1998, and any such company claiming such exemption for any income
years commencing on or after January 1, 1985, but prior to January 1, 1998, shall be
required to file a corporation business tax return in accordance with section 12-222 for
each such income year.
(2) The following companies shall be exempt from the tax imposed under this chapter: (A) Insurance companies incorporated or organized under the laws of any other
state or foreign government and for income years commencing on or after January 1,
1999, domestic insurance companies; (B) companies exempt by the federal corporation
net income tax law, and any company which qualifies as a domestic international sales
corporation (DISC), as defined in Section 992 of the Internal Revenue Code and as to
which a valid election under subsection (b) of said Section 992 to be treated as a DISC
is effective, but excluding companies, other than any company which so qualifies as,
and so elects to be treated as, a DISC, which elect not to be subject to such tax under
any provision of said Internal Revenue Code other than said subsection (b) of Section
992; (C) companies subject to gross earnings taxes under chapter 210; (D) companies
all of whose properties in this state are operated by companies subject to gross earnings
taxes under chapter 210; (E) cooperative housing corporations, as defined for federal
income tax purposes; (F) any organization or association of two or more persons established and operated for the exclusive purpose of promoting the success or defeat of
any candidate for public office or of any political party or question or constitutional
amendment to be voted upon at any state or national election or for any other political
purpose; (G) any company which is not owned or controlled, directly or indirectly, by
any other company, the gross annual revenues of which in the most recently completed
year did not exceed one hundred million dollars and which engaged in the research,
design, manufacture, sale or installation of alternative energy systems or motor vehicles
powered in whole or in part by electricity, natural gas or solar energy including their parts
and components, provided at least seventy-five per cent of the gross annual revenues of
such company are derived from such research, design, manufacture, sale or installation;
(H) any company which engages in the research, design, manufacture or sale in Connecticut of aero-derived gas turbine systems in advanced industrial applications, which applications are developed after October 1, 1992, which are limited to simple-cycle systems,
humid air, steam or water injection, recuperation or intercooling technologies, including
their parts and components, to the extent that such company's net income is directly
attributable to such purposes; (I) any non-United States corporation, which shall be any
foreign corporation, as defined in Section 7701(a)(5) of the Internal Revenue Code,
whose sole activity in this state during the income year consists of the trading in stocks,
securities or commodities for such corporation's own account, as defined in Section
864(b)(2)(A)(ii) of said Internal Revenue Code; and (J) for income years commencing
on or after January 1, 2001, S corporations.
(3) (A) A company is carrying on or doing business in this state if it is a general
partner of a partnership that does business, owns or leases property or maintains an
office in this state. (B) A company is carrying on or doing business in this state if it is
a limited partner of a limited partnership, other than an investment partnership, that does
business, owns or leases property or maintains an office in this state. (C) A company
that is not otherwise carrying on or doing business in this state, either directly or by
virtue of being a partner in a partnership described in subparagraph (A) or (B) of this
subdivision is not carrying on or doing business in this state solely by virtue of being a
limited partner of one or more investment partnerships.
(b) (1) With respect to income years commencing on or after January 1, 1989, and
prior to January 1, 1992, any company subject to the tax imposed in accordance with
subsection (a) of this section shall pay, for each such income year, an additional tax in
an amount equal to twenty per cent of the tax calculated under said subsection (a) for
such income year, without reduction of the tax so calculated by the amount of any credit
against such tax. The additional amount of tax determined under this subsection for any
income year shall constitute a part of the tax imposed by the provisions of said subsection
(a) and shall become due and be paid, collected and enforced as provided in this chapter.
(2) With respect to income years commencing on or after January 1, 1992, and
prior to January 1, 1993, any company subject to the tax imposed in accordance with
subsection (a) of this section shall pay, for each such income year, an additional tax in
an amount equal to ten per cent of the tax calculated under said subsection (a) for such
income year, without reduction of the tax so calculated by the amount of any credit
against such tax. The additional amount of tax determined under this subsection for any
income year shall constitute a part of the tax imposed by the provisions of said subsection
(a) and shall become due and be paid, collected and enforced as provided in this chapter.
(3) With respect to income years commencing on or after January 1, 2003, and
prior to January 1, 2004, any company subject to the tax imposed in accordance with
subsection (a) of this section shall pay, for each such income year, an additional tax in
an amount equal to twenty per cent of the tax calculated under said subsection (a) for
such income year, without reduction of the tax so calculated by the amount of any credit
against such tax. The additional amount of tax determined under this subsection for any
income year shall constitute a part of the tax imposed by the provisions of said subsection
(a) and shall become due and be paid, collected and enforced as provided in this chapter.
(4) With respect to income years commencing on or after January 1, 2004, and
prior to January 1, 2005, any company subject to the tax imposed in accordance with
subsection (a) of this section shall pay, for each such income year, an additional tax in
an amount equal to twenty-five per cent of the tax calculated under said subsection (a)
for such income year, without reduction of the tax so calculated by the amount of any
credit against such tax, except that any company that pays the minimum tax of two
hundred fifty dollars under section 12-219 or 12-223c for such income year shall not
be subject to the additional tax imposed by this subdivision. The additional amount of
tax determined under this subdivision for any income year shall constitute a part of the
tax imposed by the provisions of said subsection (a) and shall become due and be paid,
collected and enforced as provided in this chapter.
(5) With respect to income years commencing on or after January 1, 2006, and
prior to January 1, 2007, any company subject to the tax imposed in accordance with
subsection (a) of this section shall pay, except when the tax so calculated is equal to
two hundred fifty dollars, for each such income year, an additional tax in an amount
equal to twenty per cent of the tax calculated under said subsection (a) for such income
year, without reduction of the tax so calculated by the amount of any credit against such
tax. The additional amount of tax determined under this subsection for any income year
shall constitute a part of the tax imposed by the provisions of said subsection (a) and
shall become due and be paid, collected and enforced as provided in this chapter.
(1949 Rev., S. 1897; 1951, 1953, June, 1955, S. 1089d; 1957, P.A. 515, S. 1; 649, S. 1; 1959, P.A. 394, S. 1; 510; 1961,
P.A. 604, S. 2; February, 1965, P.A. 147; 461, S. 7; 1969, P.A. 674; June, 1969, P.A. 1, S. 13; 1971, P.A. 683, S. 1; June,
1971, P.A. 5, S. 111; 1972, P.A. 271, S. 1; 285, S. 6; P.A. 73-350, S. 6, 27; 73-442, S. 4; P.A. 75-101, S. 1, 2; 75-213, S.
1, 53; P.A. 77-476, S. 1, 3; 77-499, S. 1, 2; P.A. 80-406, S. 4, 5; 80-483, S. 54, 186; P.A. 81-472, S. 15, 159; June Sp. Sess.
P.A. 83-1, S. 1, 15; P.A. 85-431, S. 1, 2; 85-474, S. 1, 2; P.A. 88-222, S. 1, 2; P.A. 89-16, S. 1, 31; 89-211, S. 22; 89-251,
S. 20, 203; P.A. 90-28, S. 1; June Sp. Sess. P.A. 91-3, S. 99, 168; P.A. 92-152, S. 1; P.A. 93-74, S. 5, 67; 93-199, S. 4, 6;
P.A. 94-4, S. 1, 2; May 25 Sp. Sess. P.A. 94-1, S. 45, 130; P.A. 95-160, S. 32, 69; P.A. 96-139, S. 12, 13; 96-197, S. 3,
11; P.A. 98-110, S. 13, 27; 98-244, S. 6, 35; June Sp. Sess. P.A. 98-1, S. 106, 121; P.A. 03-2, S. 32; June 30 Sp. Sess. P.A.
03-1, S. 87; P.A. 05-251, S. 62; P.A. 06-186, S. 66.)
History: 1959 acts changed technical language of statute, added exclusion in Subsec. (2) for companies which elect
not to be subject to such tax, applied 3.75% rate to net income received in each year as opposed to only those years between
1953 and 1958; 1961 act added reference to chapter 212a, changed tax rate to 5% and changed technical language of statute;
1965 acts added Subdiv. (5) excepting nonprofit cooperative ownership housing corporations when residence is restricted
to corporation members and corporation ownership is restricted to residents from payment of tax and restricted 5% tax
rates to years beginning before January 1, 1966, and increased rates for years thereafter to 5.25%; 1969 acts specified stock
and nonstock corporations in Subdiv. (5) and added Subdiv. (6) excepting cooperative housing corporations where there
is no taxable income to corporation from payment of tax, added new Subdivs. (4) and (5) detailing companies formerly
mentioned by chapter reference only in Subdiv. (3) and renumbering remaining Subdivs. accordingly, specified companies
"not subject to the tax imposed by this part" in Subdiv. (6), formerly (4), changed tax rates in Subdiv. (7), formerly (5), to
5.25% for years beginning after January 1, 1971, and, in the case of companies other than telephone companies, made
5.25% rate applicable to years before January 1, 1969, and set rate for period between that date and January 1, 1971, at
8%; 1971 acts deleted proviso that minimum tax shall not be less than minimum tax under Sec. 12-219, substituted
"additional" for "minimum" re tax under Sec. 12-219, deleted Subdiv. (5), renumbering following Subdivs. accordingly,
and changed references to 1971 to 1973; 1972 acts included DISC companies in Subdiv. (2), changed tax rates in Subdiv.
(7) to 8% without exception and deleted provisions concerning tax on telephone companies; P.A. 73-350 rewrote Subdiv.
(1) to apply to insurance companies for years before January 1, 1973, and to insurance companies incorporated or organized
under laws of other state or foreign company on or after that date, deleted Subdiv. (4) renumbering subsequent Subdivs.
accordingly and added proviso that tax rate as of January 1, 1974, applicable to companies subject to tax under provisions
of section will be 2%, effective May 9, 1973, and applicable to income years beginning on or after January 1, 1973; P.A.
73-442 included foreign municipal electric utilities under provisions of section and specifically excluded such utilities in
Subdiv. (2) of exception; P.A. 75-101 added new Subdiv. (7) exempting organizations promoting success or defeat of
political candidates, parties, questions, constitutional amendments etc. from payment of tax, effective May 12, 1975, and
applicable to income years commencing on or after January 1, 1973; P.A. 75-213 changed 8% rate to 10% for income
years beginning on or after January 1, 1975; P.A. 77-476 deleted references to foreign municipal electric utilities; P.A.
77-499 required payment for owning or leasing property in state in corporate capacity or as unincorporated association
taxable for federal income tax purposes or for maintaining an office in state; P.A. 80-406 added Subdiv. (8) exempting
certain companies engaged in research, design, manufacture, sale or installation of alternative energy systems from payment
of tax until July 1, 1985; P.A. 80-483 deleted reference to building and loan associations; P.A. 81-472 made technical
changes; June Sp. Sess. P.A. 83-1 increased the rate of tax from 10% to 11.5%, effective July 1, 1983, and applicable to
income years of corporations commencing on or after January 1, 1983; P.A. 85-431 added provision allowing for retroactive
exemption to date of incorporation for certain nonprofit corporations; P.A. 85-474 provided that exemption under Subdiv.
(8) for alternative energy system companies shall not be allowed with respect to any income year commencing on or after
January 1, 1988, instead of after July 1, 1985; P.A. 88-222 expanded the corporate tax exemption of Subdiv. (8) to include
any company which is not owned or controlled, directly or indirectly, by any other company and extended the exemption
until January 1, 1993, effective May 28, 1988, and applicable to income years of corporations commencing on or after
January 1, 1988; P.A. 89-16 added Subsec. (b) imposing an additional tax as a percentage of the tax under Subsec. (a),
effective March 23, 1989, and applicable to income years of corporations commencing on or after January 1, 1989; P.A.
89-211 clarified reference to the Internal Revenue Code of 1986; P.A. 89-251 amended Subsec. (b) by increasing the
additional tax imposed under Sec. 1 of P.A. 89-16 from 15% to 20% of the tax calculated under Subsec. (a), effective July
1, 1989, and applicable to income years commencing on or after January 1, 1989; P.A. 90-28 made technical changes in
the list of corporations in Subsec. (a) not subject to tax; June Sp. Sess. P.A. 91-3 amended Subsec. (b) to provide that the
20% additional tax would be applicable with respect to income years commencing prior to January 1, 1992, and to impose
a 10% additional tax applicable with respect to income years commencing on or after January 1, 1992, and prior to January
1, 1993, effective August 22, 1991, and applicable to income years of corporations commencing on or after January 1,
1991; P.A. 92-152 added new Subsec. (a)(8) exempting corporation engaged in the research, design, manufacture or sale
of aero-derived gas turbine systems and extended the exemptions for Subdivs. (7) and (8) until January 1, 1998; P.A. 93-74 added provisions reducing tax rates commencing on and after January 1, 1995, effective May 19, 1993, and applicable
to taxable years commencing on and after January 1, 1995; P.A. 93-199 expanded exemption in Subdiv. (7) to include
companies engaged in research, design, manufacture, sale or installation of motor vehicles powered by electricity, natural
gas or solar energy, effective July 1, 1993, and applicable to taxable years commencing on or after January 1, 1993; P.A.
94-4 in Subdiv. (5) of Subsec. (a) eliminated provision requiring cooperative housing corporations to have no taxable
income, effective April 7, 1994, and applicable for income years commencing on or after January 1, 1990; May Sp. Sess.
P.A. 94-1 amended Subsec. (a) to conform section with revisions made in Sec. 5 of P.A. 93-74, effective April 7, 1994;
P.A. 95-160 amended Subsec. (a) to decrease tax rate from 11% to 10.75% for the income years commencing on or after
January 1, 1996, and prior to January 1, 1997, 9.5% for the income years commencing on or after January 1, 1998, and
prior to January 1, 1999, 8.5% for the income years commencing on or after January 1, 1999, and prior to January 1, 2000,
and 7.5% for income years commencing on or after January 1, 2000, effective June 1, 1995; P.A. 96-139 amended effective
date of P.A. 95-160 to clarify applicability to income years commencing on or after January 1, 1996; P.A. 96-197 amended
Subsec. (a) to reorganize provisions and added Subdiv. (3) re general partners of a partnership and made other technical
changes, effective June 3, 1996, and applicable to income years commencing on or after January 1, 1996; P.A. 98-110
amended Subsec. (a)(2) to exempt domestic insurance companies and make technical changes, effective May 19, 1998,
and applicable to income years commencing on or after January 1, 1999; P.A. 98-244 amended Subsec. (a)(2) to exempt
S corporations from the minimum tax under Sec. 12-219 for income years commencing on or after January 1, 2001, and
to exempt foreign-sourced income of non-United-States corporations from the corporation business tax, effective June 8,
1998, and applicable to income years commencing on or after January 1, 1998; June Sp. Sess. P.A. 98-1 amended Subsec.
(a)(2) to add commodities, effective June 24, 1998; P.A. 03-2 added Subsec. (b)(3) re surcharge for the 2003 income year,
effective February 28, 2003, and applicable to income years commencing on or after January 1, 2003; June 30 Sp. Sess.
P.A. 03-1 amended Subsec. (b) to include in surcharge provided under Subdiv. (3) amounts calculated under Sec. 91 of
P.A. 03-1 of the June 30 special session and to add Subdiv. (4) re surcharge for the 2004 income year, effective August
16, 2003, and applicable to income years commencing on or after January 1, 2003; P.A. 05-251 amended Subsec. (b) by
deleting references to Sec. 91 of June 30 Sp. Sess. P.A. 03-1 in Subdivs. (3) and (4) and by adding Subdivs. (5) and (6) re
surcharge for 2006 and 2007 income years, respectively, effective June 30, 2005, and applicable to income years commencing on or after January 1, 2006; P.A. 06-186 deleted former Subsec. (b)(6) re surcharge in income years commencing on
or after January 1, 2007, and prior to January 1, 2008, effective July 1, 2006, and applicable to income years commencing
on or after January 1, 2006.
See chapter 138c re tax credits for donations to Rental Housing Assistance Trust Fund.
See Sec. 12-247 re reduction of tax where business carried on for less than twelve months.
See Sec. 12-264 re tax on gross earnings of utility companies.
Cited. 127 C. 508. Cited. 129 C. 664. Cited. 130 C. 461. Constitutionality not passed upon until Connecticut court
determines extent of applicability of tax to corporation solely in interstate business. 323 U.S. 104. Is an excise upon
franchise of corporation for privilege of doing business in the state. 135 C. 37. Cited. 142 C. 483. Cited. 151 C. 688. Cited.
178 C. 243. Cited. 196 C. 1. Cited. 202 C. 412; Id., 583. Cited. 203 C. 198. Cited. 220 C. 665. Cited. 224 C. 426. Section
is tax imposition statute; any ambiguity must be resolved in favor of taxpayer. 228 C. 137.
Cited. 26 CS 277; Id., 373. Cited. 40 CS 77. Cited. 43 CS 314. Cited. 44 CS 90.
Subsec. (a):
Cited. 228 C. 139. Cited. 232 C. 325.