(a) Any taxpayer that (1) is a qualified small business, (2) qualifies for a credit under section 12-217j or section 12-217n, and (3) cannot take such credit in the taxable year in which the credit could otherwise be taken as a result of having no tax liability under this chapter may elect to carry such credit forward under this chapter or may apply to the commissioner as provided in subsection (b) of this section to exchange such credit with the state for a credit refund equal to sixty-five per cent of the value of the credit. Any amount of credit refunded under this section shall be refunded to the taxpayer under the provisions of this chapter, except that such credit refund shall not be subject to the provisions of section 12-227. Payment of the capital base tax under section 12-219 for an income year commencing on or after January 1, 2002, in which year the taxpayer reports no net income, as defined in section 12-213, or payment of the minimum tax of two hundred fifty dollars under section 12-219 or 12-223c for any income year, shall not be considered a tax liability for purposes of this section.
(b) An application for refund of such credit amount shall be made to the Commissioner of Revenue Services, at the same time such taxpayer files its return for the income year on or before the original due date or, if applicable, the extended due date of such year's return, on such forms and containing such information as prescribed by said commissioner. No application for refund of such credit amount may be made after the due date or extended due date, as the case may be, of such return.
(c) If the commissioner determines that the taxpayer qualifies for a credit refund under this section, the commissioner shall notify, no later than one hundred twenty days from receipt of the application for such credit refund, the State Comptroller of the name of the eligible taxpayer, and the State Comptroller shall draw an order on the State Treasurer. The amount of the credit refund shall be limited as follows: (1) In the case of an application for such credit refund filed by the taxpayer for income years beginning during 2000 or 2001 where such credit refund has not been paid as of July 1, 2002, the taxpayer shall be entitled to receive no more than one million dollars during the state's fiscal year in which the initial refund is paid, with any remaining unpaid balance to be paid in two equal installments during the state's next two succeeding fiscal years; and (2) in the case of an application for such credit refund filed by the taxpayer for the income years beginning during 2002 or thereafter, the taxpayer shall be entitled to receive no more than one million five hundred thousand dollars for any one such income year.
(d) The Commissioner of Revenue Services may disallow the credit refund of any credit otherwise allowable for a taxable year under this section if the company claiming the exchange has any amount of taxes due and unpaid to the state including interest, penalties, fees and other charges related thereto for which a period in excess of thirty days has elapsed following the date on which such taxes were due and which are not the subject of a timely filed administrative appeal to the commissioner or of a timely filed appeal pending before any court of competent jurisdiction. Before any such disallowance, the commissioner shall send written notice to the company, stating that it may pay the amount of such delinquent tax or enter into an agreement with the commissioner for the payment thereof, by the date set forth in said notice, provided, such date shall not be less than thirty days after the date of such notice. Failure on the part of the company to pay the amount of the delinquent tax or enter into an agreement to pay the amount thereof by said date shall result in a disallowance of the credit refund being claimed.
(e) For purposes of this section “qualified small business” means a company that (1) has gross income for the previous income year that does not exceed seventy million dollars, and (2) has not, in the determination of the commissioner, met the gross income test through transactions with a related person, as defined in section 12-217w.
(P.A. 99-173, S. 38, 65; June Sp. Sess. P.A. 01-6, S. 11, 85; May 9 Sp. Sess. P.A. 02-1, S. 60; May 9 Sp. Sess. P.A. 02-4, S. 19; P.A. 03-120, S. 1; June 30 Sp. Sess. P.A. 03-1, S. 89; P.A. 04-235, S. 1.)
History: P.A. 99-173 effective June 23, 1999, and applicable to taxable years commencing on or after January 1, 2000; June Sp. Sess. P.A. 01-6 amended Subsec. (a) to add reference to the application for a credit refund under Subsec. (b), to change “cash payment” to “credit refund”, and to provide that amounts refunded under this section are not subject to Sec. 12-227, and amended Subsecs. (b) and (c) to change “payment” and “exchange” to “credit refund”, effective July 1, 2001; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (b) to provide for the application for refund on or before the due date of the return, or extended due date of the return, redesignated a portion of existing Subsec. (b) as new Subsec. (c) and added provisions therein re limit on the amount of credit refund and redesignated existing Subsecs. (c) and (d) as Subsecs. (d) and (e), effective July 1, 2002; May 9 Sp. Sess. P.A. 02-4 amended Subsec. (a) to provide that payment of the minimum tax shall not be considered a tax liability for purposes of section, effective August 15, 2002, and applicable to income years commencing on or after January 1, 2002; P.A. 03-120 amended Subsec. (a) to add provision re effect of tax liability for payment of tax under Sec. 12-219 for the income year commencing January 1, 2002, and make conforming changes, effective June 18, 2003, and applicable to income years commencing on or after January 1, 2002; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (a) to allow participation in program for certain capital base taxpayers through the 2004 income year, effective August 16, 2003, and applicable to income years commencing on or after January 1, 2002; P.A. 04-235 amended Subsec. (a) to eliminate January 1, 2005, end date for consideration of income years under the exchange program, effective June 8, 2004, and applicable to income years commencing on or after January 1, 2002.
Exchange of tax credits carried forward from previous income years for a refund in subsequent years is not authorized under section. 291 C. 525.