SB 981 — AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE BIENNIAL BUDGET.

(4) Notwithstanding the provisions of subdivision (2) of this subsection, the aggregate amount allowable of tax credits and any remaining credits available under section 12-217j or 12-217n after tax credits are utilized in accordance with said subdivision shall not exceed LCO No.

4026 5 of 64 Governor's Bill No.981 (A) for income years commencing on or after January 1, 2022, and prior to January 1, 2023, sixty per cent of the amount of tax due from such taxpayer under this chapter with respect to any such income year of the taxpayer prior to the application of such credit or credits, and (B) for income years commencing on or after January 1, 2023, and prior to January 1, 2024, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to any such income year of the taxpayer prior to the application of such credit or credits.

(5) Notwithstanding the provisions of subdivision (2) of this subsection, for income years commencing on or after January 1, 2024, theaggregate amountallowableoftax creditsandany remaining credits available under section 12-217j or 12-217n or subparagraph (B) of subdivision (4) of subsection (b) of section 12-217x, as amended by this act, after tax credits are utilized in accordance with said subdivision shall not exceed seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to any such income year of the taxpayer prior to the application of such credit or credits.

Subsection (a) of section 12-392 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

(a) (1) (A) For the estates of decedents dying prior to July 1, 2009, and onor after July 1, 2023, thetax imposedby thischapter shallbecome due at the date of the taxable transfer and shall become payable, and shall be paid, without assessment, notice or demand, to the Commissioner of Revenue Services at the expiration of nine months from the date of death.

(B) For the estates of decedents dying on or after July 1, 2009, and prior to July 1, 2023, the tax imposed by this chapter shall become due at the date of the taxable transfer and shall become payable and shall be paid, without assessment, notice or demand, to the commissioner at the expiration of six months from the date of death.

(C) Executors, administrators, trustees, grantees, donees, LCO No.

4026 6 of 64 Governor's Bill No.981 beneficiaries and surviving joint owners shall be liable for the tax and for any interest or penalty thereon until it is paid, notwithstanding any provision of chapter 802b, except that no executor, administrator, trustee, grantee, donee, beneficiary or surviving joint owner shall be liable for a greater sum than the value of the property actually received by him or her.

(D) If the amount of tax reported to be due on the return is not paid [, for the estates of decedents dying prior to July 1, 2009, within such nine months, or for the estates of decedents dying on or after July 1, 2009, within such six months] within the time period set forth in subparagraph (A) or (B) of this subdivision, as applicable, there shall be imposed a penalty equalto tenper cent ofsuchamount due andunpaid, or fifty dollars, whichever is greater.

Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the due date of such tax until the date of payment.Subject to the provisions of section 12-3a, the commissioner may waive all or part of the penalties provided under this chapter when it is proven to the commissioner's satisfaction that the failure to pay any tax was due to reasonable cause and was not intentional or due to neglect.

(2) The Commissioner of Revenue Services may, for reasonable cause shown, extend the time for payment.

The commissioner may require the filing of a tentative return and the payment of the tax reported to be due thereon in connection with such extension.

Any additional tax which may be found to be due on the filing of a return as allowed by such extension shall bear interest at the rate of one per cent per month or fraction thereof from the original due date of such tax to the date of actual payment.

(3) (A) Whenever there is a claimed overpayment of the tax imposed by this chapter, the Commissioner of Revenue Services shall return to the fiduciary or transferee the overpayment which shall bear interest at the rate of two-thirds of one per cent per month or fraction thereof, such interest commencing, for the estates of decedents dying prior to July 1, 2009, and on or after July 1, 2023, from the expiration of nine months LCO No.

4026 7 of 64 Governor's Bill No981 after the death of the transferor or date of payment, whichever is later, or, for the estates of decedents dying on or after July 1, 2009, and prior to July 1, 2023, from the expiration of six months after the death of the transferor or date of payment, whichever is later, as provided in subparagraphs (B) and (C) of this subdivision.

(B) In case of such overpayment pursuant to a tax return, no interest shall be allowed or paid under this subdivision on such overpayment for any month or fraction thereof prior to (i) the ninety-first day after the last day prescribed for filing the tax return associated with such overpayment, determined without regard to any extension of time for filing, or (ii) the ninety-first day after the date such return was filed, whichever is later.

(C) In case of such overpayment pursuant to an amended tax return, no interest shall be allowed or paid under this subdivision on such overpayment for any month or fraction thereof prior to the ninety-first day after the date such amended tax return was filed.

Sec.

7.

Section 12-704d of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

(a) As used in this section:

(1) "Angel investor" means an accredited investor, as defined by the Securities and Exchange Commission, or network of accredited investors who review new or proposed businesses for potential investment and who may seek active involvement, such as consulting and mentoring, in a qualified Connecticut business or a qualified cannabis business, but "angel investor" does not include (A) a person controllingfiftypercentormoreoftheConnecticutbusinessorcannabis business invested in by the angel investor, (B) a venture capital company, or (C) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business;

LCO No.

4026 8 of 64 Governor's Bill No981 (2) "Cash investment" means the contribution of cash, at a risk of loss, to a qualified Connecticut business or a qualified cannabis business in exchange for qualified securities;

(3) "Connecticut business" means any business, other than a cannabis business, with its principal place of business in Connecticut;

(4) "Bioscience" means manufacturing pharmaceuticals, medicines, medical equipment or medical devices and analytical laboratory instruments, operating medical or diagnostic testing laboratories, or conducting pure research and development in life sciences;

(5) "Advanced materials" means developing, formulating or manufacturing advanced alloys, coatings, lubricants, refrigerants, surfactants, emulsifiers or substrates;

(6) "Photonics" means generation, emission, transmission, modulation, signal processing, switching, amplification, detection and sensing of light from ultraviolet to infrared and the manufacture, research or development of opto-electronic devices, including, but not limited to, lasers, masers, fiber optic devices, quantum devices, holographic devices and related technologies;

(7) "Information technology" means software publishing, motion picture and video production, teleproduction and postproduction services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services and computer training;

(8) "Clean technology" means the production, manufacture, design, research or development of clean energy, green buildings, smart grid, high-efficiency transportation vehicles and alternative fuels, environmental products, environmental remediation and pollution prevention;

(9) "Qualified securities" means any form of equity, including a LCO No.

4026 9 of 64 Governor's Bill No981 general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position that must be convertible into common stock;

(10) "Emerging technology business" means any business that is engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner of Economic and Community Development;

(11) "Cannabis business" means a cannabis establishment (A) for which a social equity applicant has been granted a provisional license or a license, (B) in which a social equity applicant or social equity applicants have an ownership interest of at least sixty-five per cent, and (C) such social equity applicant or social equity applicants have control of such establishment;

(12) "Social equity applicant" has the same meaning as provided in section 21a-420;

(13) "Cannabis" has the same meaning as provided in section 21a-420;

and (14) "Cannabis establishment" has the same meaning as provided in section 21a-420.

(b) There shall be allowed a credit against the tax imposed under this chapter, other than the liability imposed by section 12-707, for a cash investment by an angel investor of not less than twenty-five thousand dollars in thequalified securities of a Connecticut business or a cannabis business.

The credit shall be in an amount equal to (1) twenty-five per cent of such investor's cash investment in a Connecticut business, or (2) forty per cent of such investor's cash investment in a cannabis business, provided the total tax credits allowed to any angel investor shall not exceed five hundred thousand dollars.

The credit shall be claimed in the taxable year in which such cash investment is made by the angel investor.

The credit may be sold, assigned or otherwise transferred, in LCO No.

4026 10 of 64 Governor's Bill No981 whole or in part.

(c) To qualify for a tax credit pursuant to this section, a cash investment shall be in:

(1) A Connecticut business that (A) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section;

(B) had annual gross revenues of less than one million dollars in the most recent incomeyearofsuchbusiness;(C)hasfewerthantwenty-fiveemployees, not less than seventy-five per cent of whom reside in this state;

(D) has been operating in this state for less than seven consecutive years;

(E) is primarily owned by the management of the business and their families;

and (F) received less than two million dollars in cash investments eligible for the tax credits provided by this section;

or (2) A cannabis business that (A) has been approved as a qualified cannabis business pursuant to subsection (d) of this section;

(B) had annual gross revenues of less than one million dollars in the most recent incomeyearofsuchbusiness;(C)hasfewerthantwenty-fiveemployees, not less than seventy-five per cent of whom reside in this state;

(D) is primarily owned by the management of the business and their families;

and (E) received less than two million dollars in cash investments eligible for the tax credits provided by this section.

(d) (1) A Connecticut business or a cannabis business may apply to Connecticut Innovations, Incorporated, for approval as a Connecticut business or cannabis business, as applicable, qualified to receive cash investments eligible for a tax credit pursuant to this section.

The application shall include (A) the name of the business and a copy of the organizational documents of such business, (B) a business plan, including a description of the business and the management, product, market and financial plan of the business, (C) a description of the business's innovative technology, product or service, (D) a statement of the potential economic impact of the business, including the number, location and types of jobs expected to be created, (E) a description of the qualified securities to be issued and the amount of cash investment LCO No.

4026 11 of 64 Governor's Bill No.981 sought by the business, (F) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities, and (G) such other information as the chief executiveofficerofConnecticutInnovations,Incorporated,mayrequire.

(2) Said chief executive officer shall, on a monthly basis, compile a list of approved applications, categorized by the cash investments being sought by the qualified Connecticut business or the qualified cannabis business and type of qualified securities offered.

(e) (1) Any angel investor that intends to make a cash investment in a business on such list may apply to Connecticut Innovations, Incorporated, to reserve a tax credit in the amount indicated by such investor.

Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investments made in a qualified Connecticut business on or after July 1, 2028, or for any investments made in a qualified cannabis business on or after July 1, 2023.

(2)The aggregateamount ofalltax creditsunder thissectionthat may be reserved by Connecticut Innovations, Incorporated, shall not exceed (A) for cash investments made in qualified Connecticut businesses, six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and five million dollars for each fiscal year thereafter, and (B) for cash investments made in qualified cannabis businesses, fifteen million dollars annually for [each fiscal year] the fiscal years commencing [on or after] July 1, 2021, and July 1, 2022.

(3) With respect to the tax credits available under this section for investments in qualified Connecticut businesses, Connecticut Innovations, Incorporated, shall not reserve more than seventy-five per cent of such tax credits for investments in emerging technology businesses, except if any such credits remain available for reservation after April first in any fiscal year, such remaining credits may be reserved for investments in such businesses and may be prioritized for veteran-owned, women-owned or minority-owned businesses and businesses owned by individuals with disabilities.

LCO No.

4026 12 of 64 Governor's Bill No981 (4) The amount of the credit allowed to any investor pursuant to this section shall not exceed the amount of tax due from such investor under this chapter, other than section 12-707, with respect to such taxable year.

Any tax credit that is claimed by the angel investor but not applied against the tax due under this chapter, other than the liability imposed under section 12-707, may be carried forward for the five immediately succeeding taxable years until the full credit has been applied.

(f) If the angel investor is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the angel investor.

If the angel investor is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by such limited liability company's owner, provided such owner is a person subject to the tax imposed under this chapter.

(g) A review of the cumulative effectiveness of the credit under this sectionshallbeconductedbyConnecticutInnovations,Incorporated,by July first annually.

Such review shall include, but need not be limited to, thenumber andtype of Connecticut businessesandcannabisbusinesses that received angel investments, the number of angel investors and the aggregate amount of cash investments, the current status of each Connecticut business and cannabis business that received angel investments, the number of employees employed in each year following the year in which such Connecticut business or cannabis business received the angel investment and the economic impact in the state of the Connecticut business or cannabis business that received the angel investment.

Such review shall be submitted to the Office of Policy and Management and to the joint standing committee of the General Assembly having cognizance of matters relating to commerce, in accordance with the provisions of section 11-4a.

Sec.

8.

Subsection (c) of section 21a-420f of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

LCO No.

4026 13 of 64 Governor's Bill No981 (c) (1) On and after July 1, 2022, there is established a fund to be known as the "Social Equity and Innovation Fund" which shall be a separate, nonlapsing fund.

The fund shall contain any moneys required by law to be deposited in the fund and shall be held by the Treasurer separate and apart from all other moneys, funds and accounts.

Moneys in the fund shall be appropriated for the purposes of providing the following:

Access to capital for businesses;

technical assistance for the start-up and operation of a business;

funding for workforce education;

funding for community investments;

and paying costs incurred to implement the activities authorized under RERACA.

All such appropriations shall be dedicated to expenditures that further the principles of equity, as defined in section 21a-420.

(2) (A) For the purposes of subdivision (1) of this subsection, for the fiscal year ending June 30, 2023, and for each fiscal year thereafter, the Social Equity Council shall transmit, for even-numbered years, estimates of expenditure requirements and for odd-numbered years, recommended adjustments and revisions, if any, of such estimates, to the Secretary of the Office of Policy and Management, in the manner prescribed for a budgeted agency under subsection (a) of section 4-77.

[The council shall recommend for each fiscal year commencing with the fiscal year ending June 30, 2023, appropriate funding for all credits payable to angel investors that invest in cannabis businesses pursuant to section 12-704d.] (B) The Office of Policy and Management may not make adjustments to any such estimates or adjustments and revisions of such estimates transmitted by the council.

Notwithstanding any provision of the general statutes or any special act, the Governor shall not reduce the allotment requisitions or allotments in force pursuant to section 4-85 or make reductions in allotments in order to achieve budget savings in the General Fund, concerning any appropriations made by the General Assembly for the purposes of subdivision (1) of this subsection.

Sec.

9.

Subsection (a) of section 12-704e of the general statutes is repealed and the following is substituted in lieu thereof (Effective from LCO No.

4026 14 of 64 Governor's Bill No.981 passage):

(a) Any resident of this state, as defined in subdivision (1) of subsection (a) of section 12-701, who is subject to the tax imposed under this chapter for any taxable year shall be allowed a credit against the tax otherwise due under this chapter in an amount equal to the applicable percentage of the earned income credit claimed and allowed for the same taxable year under Section 32 of the Internal Revenue Code, as defined in subsection (a) of section 12-701.

As used in this section, "applicable percentage" means (1) twenty-three per cent for taxable years commencing prior to January 1, 2021, [and] (2) thirty and one-half per cent for taxable years commencing on or after January 1, 2021, and prior to January 1, 2023, and (3) forty per cent for taxable years commencing on or after January 1, 2023.

Sec.

10.

Section 3-20 of the general statutes is amended by adding subsection (bb) as follows (Effective from passage):

(NEW) (bb) (1) For each fiscal year during which general obligation bonds or credit revenue bonds issued on or after the effective date of this section and prior to July 1, 2033, shall be outstanding, the state of Connecticut shall comply with the provisions of (A) section 4-30a of the general statutes, revision of 1958, revised to January 1, 2023, (B) section 2-33a of the general statutes, revision of 1958, revised to January 1, 2023, (C) section 2-33c of the general statutes, revision of 1958, revised to January 1, 2023, (D) subsections (d) and (g) of this section, revision of 1958, revised to January 1, 2023, and (E) section 3-21 of the general statutes, revision of 1958, revised to January 1, 2023.

The state of Connecticut does hereby pledge to and agree with the holders of any bonds, notes and other obligations issued pursuant to subdivision (2) of this subsection that no public or special act of the General Assembly taking effect on or after the effective date of this section and prior to July 1, 2033, shall alter the obligation to comply with the provisions of the sections and subsections set forth in subparagraphs (A) to (E), inclusive, of this subdivision, during the period for which the pledge and undertaking is applicable pursuant to subdivision (2) of this subsection, LCO No.

4026 15 of 64 Governor's Bill No981 provided nothing in this subsection shall preclude such alteration (i) if and when adequate provision shall be made by law for the protection of the holders of such bonds, or (ii) (I) if and when the Governor declares an emergency or the existence of extraordinary circumstances, in which the provisions of section 4-85 are invoked, (II) at least three-fifths of the members of each chamber of the General Assembly vote to alter such required compliance during the fiscal year for which the emergency or existence of extraordinary circumstances are determined, and (III) any such alteration is for the fiscal year in progress only.

(2) The Treasurer shall include this pledge and undertaking in general obligation bonds and credit revenue bonds issued on or after the effective date of this section and prior to July 1, 2033, and such pledge and undertaking (A) shall be applicable for a period of ten years from the date of first issuance of such bonds, and (B) shall not apply to refunding bonds issued for bonds issued under this subdivision.

Sec.

11.

Subsection (p) of section 3-20j of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

(p) (1) Prior to July 1, [2023] 2025, net earnings of investments of proceeds of bonds issued pursuant to section 3-20, as amended by this act, or pursuant to this section and accrued interest on the issuance of such bonds and premiums on the issuance of such bonds shall be deposited to the credit of the General Fund, after (A) payment of any expenses incurred by the Treasurer or State Bond Commission in connection with such issuance, or (B) application to interest on bonds, notes or other obligations of the state.

(2) On and after July 1, [2023] 2025, notwithstanding subsection (f) of section3-20, (A)net earningsofinvestmentsofproceedsofbondsissued pursuant to section 3-20, as amended by this act, or pursuant to this section and accrued interest on the issuance of such bonds shall be deposited to the credit of the General Fund, and (B) premiums, net of any original issue discount, on the issuance of such bonds shall, after LCO No.

4026 16 of 64 Governor's Bill No981 payment of any expenses incurred by the Treasurer or State Bond Commission in connection with such issuance, be deposited at the direction of the Treasurer to the credit of an account or fund to fund all or a portion of any purpose or project authorized by the State Bond Commission pursuant to any bond act up to the amount authorized by the State Bond Commission, provided the bonds for such purpose or project are unissued, and provided further the certificate of determination the Treasurer files with the secretary of the State Bond Commission for such authorized bonds sets forth the amount of the deposit applied to fund each such purpose and project.

Upon such filing, the Treasurer shall record bonds in the amount of net premiums credited to each purpose and project as set forth in the certificate of determination of the Treasurer as deemed issued and retired and the Treasurer shall not thereafter exercise authority to issue bonds in such amount for such purpose or project.

Upon such recording by the Treasurer, such bonds shall be deemed to have been issued, retired and no longer authorized for issuance or outstanding for the purposes of section 3-21, and for the purpose of aligning the funding of such authorized purpose and project with amounts generated by net premiums, but shall not constitute an actual bond issuance or bond retirement for any other purposesincluding,but not limitedto,financial reporting purposes.

Sec.

12.

Subsection (c) of section 4-28e of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2023):

(c) Commencing with the fiscal year ending June 30, [2023] 2024, annual disbursements from the Tobacco Settlement Fund shall be made asfollows:(1)TotheTobaccoandHealthTrustFundinanamountequal to [twelve] six million dollars;

and (2) the remainder to the General Fund.

Sec.

13.

LCO(a) No.There is hereby imposed on the Connecticut taxable income of each resident of this state a tax:

4026 17 of 64 Governor's Bill No.981 (a) There is hereby imposed on the Connecticut taxable income of each resident of this state a tax:

T1 Connecticut Taxable Income Rate of Tax T2 Not over $2,250 3.0% OversSB981 $2,250/ $67.50,File plusNo. 4.5% of the T3 T4 excess over $2,250 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

732 5 sSB981 File No.

732 Over $2,250 $67.50, plus 4.5% of the T3 T4 excess over $2,250 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T9 Connecticut Taxable Income Rate of Tax LCOT10 No.Not over $4,500 3.0% T11 Over $4,500 $135.00, plus 4.5% of the T12 excess over $4,500 (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

4026 18 of 64 Governor's Bill No.981 T10 Not over $4,500 3.0% T11 Over $4,500 $135.00, plus 4.5% of the T12 excess over $4,500 (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

T13 Connecticut Taxable Income Rate of Tax T14 Not over $6,250 3.0% T15sSB981 Over/ $6,250File $187.50,No. plus 4.5% of the T16 excess over $6,250 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

732 6 sSB981 File No.

732 T15 Over $6,250 $187.50, plus 4.5% of the T16 excess over $6,250 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

LCOT21 No.Connecticut Taxable Income Rate of Tax T22 Not over $12,500 3.0% T23 Over $12,500 $375.00, plus 4.5% of the T24 excess over $12,500 (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

4026 19 of 64 Governor's Bill No.981 T21 Connecticut Taxable Income Rate of Tax T22 Not over $12,500 3.0% T23 Over $12,500 $375.00, plus 4.5% of the T24 excess over $12,500 (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

T25 Connecticut Taxable Income Rate of Tax T26 Not over $7,500 3.0% T27sSB981 Over/ $7,500File $225.00,No. plus 4.5% of the T28 excess over $7,500 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T29732 Connecticut7 TaxablesSB981 IncomeFile RateNo. of Tax Not over $12,000 3.0% T30 T31 Over $12,000 $360.00, plus 4.5% of the excess over $12,000 T32 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

LCO732 No.Over $7,500 $225.00, plus 4.5% of the T27 T28 excess over $7,500 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

4026T29 20 of 64 Governor's Bill No.981 T33 Connecticut Taxable Income Rate of Tax T34T30 Not over $15,000$12,000 3.0% T35T31 Over $15,000$12,000 $450.00,$360.00, plus 4.5% of the T36T32 excess over $15,000$12,000 (D)(C) For trustsany husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or estates,any person who files a return under the ratefederal ofincome tax shallfor besuch 4.5%taxable year as a surviving spouse, as defined in Section 2(a) of theirthe ConnecticutInternal taxableRevenue income.Code:

T33 Connecticut Taxable Income Rate of Tax Not over $15,000 3.0% T34 T35 Over $15,000 $450.00, plus 4.5% of the T36 excess over $15,000 (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

T37 Connecticut Taxable Income Rate of Tax NotsSB981 over/ $10,000File 3.0%No. T38 T39 Over $10,000 $300.00, plus 4.5% of the excess over $10,000 T40 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T41732 Connecticut8 TaxablesSB981 IncomeFile Rate of Tax T42 Not over $16,000 3.0% T43 Over $16,000 $480.00, plus 4.5% of the T44 excess over $16,000 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the LCO No.

4026732 21Not over $10,000 3.0% T38 T39 Over $10,000 $300.00, plus 4.5% of 64the Governor'sexcess Billover No.981$10,000 T40 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T41 Connecticut Taxable Income Rate of Tax T42 Not over $16,000 3.0% T43 Over $16,000 $480.00, plus 4.5% of the T44 excess over $16,000 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

T49sSB981 Connecticut/ TaxableFile IncomeNo. Rate of Tax T50 Not over $10,000 3.0% Over $10,000 $300.00, plus 5.0% of the T51 T52 excess over $10,000 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T53732 Connecticut9 TaxablesSB981 IncomeFile Rate of Tax T54 Not over $16,000 3.0% T55 Over $16,000 $480.00, plus 5.0% of the T56 excess over $16,000 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such LCO No.

4026732 22T49 Connecticut Taxable Income Rate of 64Tax Governor'sT50 BillNot No.981over $10,000 3.0% T51 Over $10,000 $300.00, plus 5.0% of the T52 excess over $10,000 (B) For any person who files a return under the federal income tax for such taxable year as a survivinghead spouse,of household, as defined in Section 2(a)2(b) of the Internal Revenue Code:

T53 Connecticut Taxable Income Rate of Tax Not over $16,000 3.0% T54 T55 Over $16,000 $480.00, plus 5.0% of the excess over $16,000 T56 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

T61sSB981 Connecticut/ TaxableFile IncomeNo. Rate of Tax T62 Not over $10,000 3.0% Over $10,000 but not $300.00, plus 5.0% of the T63 T64 over $500,000 excess over $10,000 T65 Over $500,000 $24,800, plus 6.5% of the T66 excess over $500,000 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

T67732 Connecticut10 TaxablesSB981 IncomeFile Rate of Tax T68 Not over $16,000 3.0% Over $16,000 but not $480.00, plus 5.0% of the T69 T70 over $800,000 excess over $16,000 Over $800,000 $39,680, plus 6.5% of the T71 T72 excess over $800,000 LCO No.

4026732 23T61 Connecticut Taxable Income Rate of 64Tax Governor'sT62 BillNot No.over $10,000 3.0% T63 Over $10,000 but not $300.00, plus 5.0% of the T64 over $500,000 excess over $10,000 T65 Over $500,000 $24,800, plus 6.5% of the T66 excess over $500,000 (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

981T67 Connecticut Taxable Income Rate of Tax Not over $16,000 3.0% T68 T69 Over $16,000 but not $480.00, plus 5.0% of the over $800,000 excess over $16,000 T70 T71 Over $800,000 $39,680, plus 6.5% of the T72 excess over $800,000 (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

T79sSB981 Connecticut/ TaxableFile IncomeNo. Rate of Tax T80 Not over $10,000 3.0% Over $10,000 but not $300.00, plus 5.0% of the T81 T82 over $500,000 excess over $10,000 T83 Over $500,000 $24,800, plus 6.5% of the T84 excess over $500,000 (E)For trustsorestates,therate oftax shallbe6.5% oftheConnecticut taxable income.

732 11 sSB981 File No.

732 T79 Connecticut Taxable Income Rate of Tax T80 Not over $10,000 3.0% T81 Over $10,000 but not $300.00, plus 5.0% of the T82 over $500,000 excess over $10,000 T83 Over $500,000 $24,800, plus 6.5% of the T84 excess over $500,000 (E)For trustsorestates,therate oftax shallbe6.5% oftheConnecticut taxable income.

LCOT85 Connecticut Taxable Income Rate of Tax T86 Not over $10,000 3.0% Over $10,000 but not $300.00, plus 5.0% of the T87 T88 over $50,000 excess over $10,000 Over $50,000 but not $2,300, plus 5.5% of the T89 T90 over $100,000 excess over $50,000 T91 Over $100,000 but not $5,050, plus 6.0% of the T92 over $200,000 excess over $100,000 T93 Over $200,000 but not $11,050, plus 6.5% of the T94 over $250,000 excess over $200,000 T95 Over $250,000 $14,300, plus 6.70% of the T96 excess over $250,000 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each five sSB981 / File No.

4026732 2412 ofsSB981 64File Governor'sNo. Bill No.981 T85 Connecticut Taxable Income Rate of Tax T86 Not over $10,000 3.0% T87 Over $10,000 but not $300.00, plus 5.0% of the T88 over $50,000 excess over $10,000 T89 Over $50,000 but not $2,300, plus 5.5% of the T90 over $100,000 excess over $50,000 T91 Over $100,000 but not $5,050, plus 6.0% of the T92 over $200,000 excess over $100,000 T93 Over $200,000 but not $11,050, plus 6.5% of the T94 over $250,000 excess over $200,000 T95 Over $250,000 $14,300, plus 6.70% of the T96 excess over $250,000 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(B) (i) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) LCOof No.the Internal Revenue Code:

4026T97 25Connecticut Taxable Income Rate of 64Tax Governor'sT98 BillNot No.981over $16,000 3.0% Over $16,000 but not $480.00, plus 5.0% of the InternalT99 RevenueT100 Code:over $80,000 excess over $16,000 Over $80,000 but not $3,680, plus 5.5% of the T101 T102 over $160,000 excess over $80,000 Over $160,000 but not $8,080, plus 6.0% of the T103 T104 over $320,000 excess over $160,000 Over $320,000 but not $17,680, plus 6.5% of the T105 T106 over $400,000 excess over $320,000 Over $400,000 $22,880, plus 6.70% of the T107 T108 excess over $400,000 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the sSB981 / File No.

T97732 Connecticut13 TaxablesSB981 IncomeFile RateNo. of Tax T98 Not over $16,000 3.0% T99 Over $16,000 but not $480.00, plus 5.0% of the T100 over $80,000 excess over $16,000 T101 Over $80,000 but not $3,680, plus 5.5% of the T102 over $160,000 excess over $80,000 T103 Over $160,000 but not $8,080, plus 6.0% of the T104 over $320,000 excess over $160,000 T105 Over $320,000 but not $17,680, plus 6.5% of the T106 over $400,000 excess over $320,000 T107 Over $400,000 $22,880, plus 6.70% of the excess over $400,000 T108 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

LCO(C) No.(i) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

4026T109 26Connecticut ofTaxable 64Income Governor'sRate Billof No.981Tax (C)T110 (i)Not Forover any$20,000 husband3.0% andT111 wifeOver who$20,000 filebut anot return$600.00, underplus 5.0% of the federalover income$100,000 taxexcess forover such$20,000 taxableT112 yearT113 asOver married$100,000 individualsbut filingnot jointly$4,600, orplus any5.5% personof whothe filesT114 aover return$200,000 underexcess over $100,000 Over $200,000 but not $10,100, plus 6.0% of the federalT115 incomeT116 taxover for$400,000 suchexcess taxableover year$200,000 asT117 aOver surviving$400,000 spouse,but asnot defined$22,100, inplus Section6.5% 2(a)of the T118 over $500,000 excess over $400,000 T119 Over $500,000 $28,600, plus 6.70% of the Internalexcess Revenueover Code:$500,000 T120 sSB981 / File No.

T109732 Connecticut14 TaxablesSB981 IncomeFile RateNo. of Tax Not over $20,000 3.0% T110 T111 Over $20,000 but not $600.00, plus 5.0% of the T112 over $100,000 excess over $20,000 Over $100,000 but not $4,600, plus 5.5% of the T113 T114 over $200,000 excess over $100,000 T115 Over $200,000 but not $10,100, plus 6.0% of the T116 over $400,000 excess over $200,000 T117 Over $400,000 but not $22,100, plus 6.5% of the over $500,000 excess over $400,000 T118 T119 Over $500,000 $28,600, plus 6.70% of the T120 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred fifty dollars for each LCOten No.thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of four thousand five hundred dollars.

4026 27 of 64 Governor's Bill No.981 ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of four thousand five hundred dollars.

T121 Connecticut Taxable Income Rate of Tax T122 Not over $10,000 3.0% T123 Over $10,000 but not $300.00, plus 5.0% of the T123 T124 over $50,000 excess over $10,000 T125 Over $50,000 but not $2,300, plus 5.5% of the T126 over $100,000 excess over $50,000 T126 T127 Over $100,000 but not $5,050, plus 6.0% of the T128 over $200,000 excess over $100,000 T128 T129 Over $200,000 but not $11,050, plus 6.5% of the T129 T130 over $250,000 excess over $200,000 T131sSB981 Over/ $250,000File $14,300,No. plus 6.70% of the excess over $250,000 T132 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 15 sSB981 File No.

732 T131 Over $250,000 $14,300, plus 6.70% of the T132 excess over $250,000 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax LCOcomputed No.under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

4026 28 of 64 Governor's Bill No.981 computed under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

T133 Connecticut Taxable Income Rate of Tax T134 Not over $10,000 3.0% T135 Over $10,000 but not $300.00, plus 5.0% of the T136 over $50,000 excess over $10,000 T137sSB981 Over/ $50,000File but not $2,300, plus 5.5% of the T138 over $100,000 excess over $50,000 Over $100,000 but not $5,050, plus 6.0% of the T139 T140 over $200,000 excess over $100,000 Over $200,000 but not $11,050, plus 6.5% of the T141 T142 over $250,000 excess over $200,000 Over $250,000 but not $14,300, plus 6.9% of the T143 T144 over $500,000 excess over $250,000 Over $500,000 $31,550, plus 6.99% of the T145 T146 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent LCO No.

4026732 2916 ofsSB981 64File Governor'sNo. Bill No.981 tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 Over $50,000 but not $2,300, plus 5.5% of the T137 T138 over $100,000 excess over $50,000 Over $100,000 but not $5,050, plus 6.0% of the T139 T140 over $200,000 excess over $100,000 T141 Over $200,000 but not $11,050, plus 6.5% of the T142 over $250,000 excess over $200,000 T143 Over $250,000 but not $14,300, plus 6.9% of the T144 over $500,000 excess over $250,000 T145 Over $500,000 $31,550, plus 6.99% of the T146 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii) and (A)(iii) of this subdivision, an amount equal to fifty dollars for each five thousandsSB981 dollars,/ orFile fractionNo. thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

732 17 sSB981 File No.

732 thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

T147 Connecticut Taxable Income Rate of Tax T148 Not over $16,000 3.0% T148 T149 Over $16,000 but not $480.00, plus 5.0% of the T150 over $80,000 excess over $16,000 T150 T151 Over $80,000 but not $3,680, plus 5.5% of the T152 over $160,000 excess over $80,000 T152 T153 Over $160,000 but not $8,080, plus 6.0% of the over $320,000 excess over $160,000 T154 T155 Over $320,000 but not $17,680, plus 6.5% of the over $400,000 excess over $320,000 T156 T157 Over $400,000 but not $22,880, plus 6.9% of the T158 over $800,000 excess over $160,000$400,000 LCOT159 No.Over $800,000 $50,480, plus 6.99% of the T160 excess over $800,000 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount ofthetaxpayer's Connecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

4026 30 of 64 Governor's Bill No.981 Over $320,000 but not $17,680, plus 6.5% of the T155 T156 over $400,000 excess over $320,000 T157 Over $400,000 but not $22,880, plus 6.9% of the T158 over $800,000 excess over $400,000 T159 Over $800,000 $50,480, plus 6.99% of the T160 excess over $800,000 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of thetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds threesSB981 hundred/ twentyFile thousandNo. dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to one hundred forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of four thousand two hundred dollars.

732 18 sSB981 File No.

732 three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to one hundred forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of four thousand two hundred dollars.

LCO(C) No.(i) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

4026T161 31Connecticut Taxable Income Rate of 64Tax Governor'sNot Billover No.981$20,000 (C)3.0% (i)T162 ForT163 anyOver husband$20,000 andbut wifenot who$600.00, fileplus a5.0% returnof underthe T164 over $100,000 excess over $20,000 T165 Over $100,000 but not $4,600, plus 5.5% of the federalT166 incomeover tax$200,000 forexcess suchover taxable$100,000 yearOver as$200,000 marriedbut individualsnot filing$10,100, jointlyplus or6.0% anyof personthe whoT167 filesT168 aover return$400,000 underexcess over $200,000 T169 Over $400,000 but not $22,100, plus 6.5% of the federalT170 incomeover tax$500,000 forexcess suchover taxable$400,000 yearT171 asOver a$500,000 survivingbut spouse,not as$28,600, definedplus in6.9% Sectionof 2(a)the over $1,000,000 excess over $500,000 T172 T173 Over $1,000,000 $63,100, plus 6.99% of the InternalsSB981 Revenue/ Code:File No.

T161732 Connecticut19 TaxablesSB981 IncomeFile RateNo. of Tax T162 Not over $20,000 3.0% T163 Over $20,000 but not $600.00, plus 5.0% of the over $100,000 excess over $20,000 T164 T165 Over $100,000 but not $4,600, plus 5.5% of the T166 over $200,000 excess over $100,000 T167 Over $200,000 but not $10,100, plus 6.0% of the T168 over $400,000 excess over $200,000 Over $400,000 but not $22,100, plus 6.5% of the T169 T170 over $500,000 excess over $400,000 T171 Over $500,000 but not $28,600, plus 6.9% of the T172 over $1,000,000 excess over $500,000 T173 Over $1,000,000 $63,100, plus 6.99% of the excess over $1,000,000 T174 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 excess over $1,000,000 T174 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount ofthetaxpayer'sConnecticut taxableincome to whichthethree- per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax LCOcomputed No.under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred eighty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of five thousand four hundred dollars.

4026 32 of 64 Governor's Bill No981 computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred eighty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of five thousand four hundred dollars.

T175 Connecticut Taxable Income Rate of Tax T176 Not over $10,000 3.0% T176sSB981 T177/ OverFile $10,000 but not $300.00, plus 5.0% of the T178 over $50,000 excess over $10,000 T179 Over $50,000 but not $2,300, plus 5.5% of the T180 over $100,000 excess over $50,000 Over $100,000 but not $5,050, plus 6.0% of the T181 T182 over $200,000 excess over $100,000 T183 Over $200,000 but not $11,050, plus 6.5% of the T184 over $250,000 excess over $200,000 T185 Over $250,000 but not $14,300, plus 6.9% of the T186 over $500,000 excess over $250,000 T187 Over $500,000 $31,550, plus 6.99% of the excess over $500,000 T188 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this LCO No.

4026732 3320 ofsSB981 64File Governor'sNo. Bill No981 subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

732 T177 Over $10,000 but not $300.00, plus 5.0% of the T178 over $50,000 excess over $10,000 T179 Over $50,000 but not $2,300, plus 5.5% of the T180 over $100,000 excess over $50,000 T181 Over $100,000 but not $5,050, plus 6.0% of the over $200,000 excess over $100,000 T182 T183 Over $200,000 but not $11,050, plus 6.5% of the T184 over $250,000 excess over $200,000 T185 Over $250,000 but not $14,300, plus 6.9% of the T186 over $500,000 excess over $250,000 Over $500,000 $31,550, plus 6.99% of the T187 T188 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computedsSB981 under/ theFile provisionsNo. of subparagraphs (D)(i), (D)(ii) and (D)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

732 21 sSB981 File No.

732 computed under the provisions of subparagraphs (D)(i), (D)(ii) and (D)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

T189 Connecticut Taxable Income Rate of Tax LCOT190 Not over $10,000 2.0% T191 Over $10,000 but not $200.00, plus 4.75% of the T192 over $50,000 excess over $10,000 T193 Over $50,000 but not $2,100, plus 5.5% of the T194 over $100,000 excess over $50,000 T195 Over $100,000 but not $4,850, plus 6.0% of the over $200,000 excess over $100,000 T196 T197 Over $200,000 but not $10,850, plus 6.5% of the over $250,000 excess over $200,000 T198 T199 Over $250,000 but not $14,100, plus 6.9% of the over $500,000 excess over $250,000 T200 T201 Over $500,000 $31,350, plus 6.99% of the excess over $500,000 T202 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's sSB981 / File No.

4026732 3422 ofsSB981 64File Governor'sNo. Bill No.981 Not over $10,000 2.0% T190 T191 Over $10,000 but not $200.00, plus 4.5% of the T192 over $50,000 excess over $10,000 T193 Over $50,000 but not $2,000, plus 5.5% of the T194 over $100,000 excess over $50,000 T195 Over $100,000 but not $4,750, plus 6.0% of the T196 over $200,000 excess over $100,000 T197 Over $200,000 but not $10,750, plus 6.5% of the T198 over $250,000 excess over $200,000 T199 Over $250,000 but not $14,000, plus 6.9% of the T200 over $500,000 excess over $250,000 T201 Over $500,000 $31,250, plus 6.99% of the T202 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

Any732 such amount of Connecticut taxableadjusted gross income toexceeds which,said asamount. provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii)Any Eachsuch taxpayeramount whoseof Connecticut adjustedtaxable gross income exceedsto twowhich, hundredas thousandprovided dollars shall pay, in addition to the taxpreceding computedsentence, under the provisionstwo-per-cent oftax subparagraphsrate (A)(i)does andnot (A)(ii)apply ofshall thisbe subdivision, an amount equal to ninety-eight dollars for each five thousand dollars, or fraction thereof, by which the taxpayer'sfour-and-three-quarters-per-cent Connecticuttax adjustedrate grossshall incomeapply. exceeds two hundred thousand dollars, up to a maximum payment of two thousand nine hundred forty dollars.

(iv)(iii) Each taxpayer whose Connecticut adjusted gross income exceeds LCOtwo No.hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii) of this subdivision, an amount equal to ninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand seven hundred dollars.

4026(iv) 35Each oftaxpayer 64whose Governor'sConnecticut Billadjusted No.981gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii) and (A)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii), (A)(iii) and, if applicable, (A)(iv) of this subdivision, one hundred twenty-five dollars.

T203 Connecticut Taxable Income Rate of Tax T204 Not over $16,000 2.0% Over $16,000 but not $320.00, plus 4.5%4.75% of the T205 T206 over $80,000 excess over $16,000 OversSB981 $80,000/ butFile notNo. $3,200, plus 5.5% of the T207 T208 over $160,000 excess over $80,000 Over $160,000 but not $7,600, plus 6.0% of the T209 T210 over $320,000 excess over $160,000 Over $320,000 but not $17,200, plus 6.5% of the T211 T212 over $400,000 excess over $320,000 T213 Over $400,000 but not $22,400, plus 6.9% of the T214 over $800,000 excess over $400,000 T215 Over $800,000 $50,000, plus 6.99% of the T216 excess over $800,000 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two- per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

Any732 such23 amountsSB981 ofFile Connecticut taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall LCO No.

4026732 36Over $80,000 but not $3,360, plus 5.5% of 64the Governor'sT207 BillT208 No.981over be$160,000 anexcess over $80,000 Over $160,000 but not $7,760, plus 6.0% of the T209 T210 over $320,000 excess over $160,000 T211 Over $320,000 but not $17,360, plus 6.5% of the T212 over $400,000 excess over $320,000 T213 Over $400,000 but not $22,560, plus 6.9% of the T214 over $800,000 excess over $400,000 T215 Over $800,000 $50,160, plus 6.99% of the T216 excess over $800,000 (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the four-and-one-half-per-centtwo- per-cent tax rate applies shall apply.be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(iii)Any Eachsuch taxpayeramount whoseof Connecticut adjustedtaxable gross income exceedsto threewhich, hundredas twentyprovided thousand dollars shall pay, in addition to the taxpreceding computedsentence, under the provisionstwo-per-cent oftax subparagraphsrate (B)(i)does andnot (B)(ii)apply ofshall thisbe subdivision, an amount equal to one hundred fifty-seven dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer'sfour-and-three-quarters-per-cent Connecticuttax adjustedrate grossshall incomeapply. exceeds three hundred twenty thousand dollars, up to a maximum payment of four thousand seven hundred ten dollars.

(iv)(iii) Each taxpayer whose Connecticut adjusted gross income exceeds eightthree hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i),(B)(i) (B)(ii) and (B)(iii)(B)(ii) of this subdivision, an amount equal to eightyone hundred forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds eightthree hundred twenty thousand dollars, up to a maximum payment of sevenfour hundredthousand twentytwo hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds eight hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i), (B)(ii) and sSB981 / File No.

732 24 sSB981 File No.

732 (B)(iii) of this subdivision, an amount equal to eighty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds eight hundred thousand dollars, up to a maximum payment of seven hundred twenty dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i), (B)(ii), (B)(iii) and, if applicable, (B)(iv) of this subdivision, two hundred dollars.

T217 Connecticut Taxable Income Rate of Tax T218 Not over $20,000 2.0% T218 T219 Over $20,000 but not $400.00, plus 4.5%4.75% of the T220 over $100,000 excess over $20,000 T221 Over $100,000 but not $4,000,$4,200, plus 5.5% of the T222 over $200,000 excess over $100,000 T222 T223 Over $200,000 but not $9,500,$9,700, plus 6.0% of the T223 T224 over $400,000 excess over $200,000 T225 Over $400,000 but not $21,500,$21,700, plus 6.5% of the LCOT226 over $500,000 excess over $400,000 T227 Over $500,000 but not $28,200, plus 6.9% of the T228 over $1,000,000 excess over $500,000 T229 Over $1,000,000 $62,700, plus 6.99% of the excess over $1,000,000 T230 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two- sSB981 / File No.

4026732 3725 ofsSB981 64File Governor'sNo. Bill No981 T226 over $500,000 excess over $400,000 T227 Over $500,000 but not $28,000, plus 6.9% of the T228 over $1,000,000 excess over $500,000 T229 Over $1,000,000 $62,500, plus 6.99% of the T230 excess over $1,000,000 (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two- per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

Any732 suchper-cent amounttax ofrate Connecticutapplies taxableshall incomebe toreduced which,by astwo providedthousand indollars thefor precedingeach sentence,five thethousand two-per-centdollars, taxor ratefraction doesthereof, notby applywhich shallthe betaxpayer's anConnecticut amountadjusted togross whichincome theexceeds four-and-one-half-per-centsaid taxamount. rate shall apply.

(iii)Any Eachsuch taxpayeramount whoseof Connecticut adjustedtaxable gross income exceedsto fourwhich, hundredas thousandprovided dollars shall pay, in addition to the taxpreceding computedsentence, under the provisionstwo-per-cent oftax subparagraphsrate (C)(i)does andnot (C)(ii)apply ofshall thisbe subdivision, an amount equal to one hundred ninety-six dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer'sfour-and-three-quarters-per-cent Connecticuttax adjustedrate grossshall incomeapply. exceeds four hundred thousand dollars, up to a maximum payment of five thousand eight hundred eighty dollars.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred eighty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of five thousand four hundred dollars.

(D)(v) (i)Each Fortaxpayer anywhose personConnecticut whoadjusted filesgross aincome returnexceeds four hundred thousand dollars shall pay, in addition to the tax computed under the federalprovisions incomeof taxsubparagraphs LCO(C)(i), No.(C)(ii), (C)(iii) and, if applicable, (C)(iv) of this subdivision, two hundred fifty dollars.

4026(D) 38(i) ofFor 64any Governor'sperson Billwho No.981files a return under the federal income tax for such taxable year as a married individual filing separately:

T231 Connecticut Taxable Income Rate of Tax T232 Not over $10,000 2.0% T232 T233 Over $10,000 but not $200.00, plus 4.5%4.75% of the oversSB981 $50,000/ excessFile overNo. $10,000 T234 T235 Over $50,000 but not $2,000, plus 5.5% of the T236 over $100,000 excess over $50,000 T237 Over $100,000 but not $4,750, plus 6.0% of the T238 over $200,000 excess over $100,000 T239 Over $200,000 but not $10,750, plus 6.5% of the T240 over $250,000 excess over $200,000 Over $250,000 but not $14,000, plus 6.9% of the T241 T242 over $500,000 excess over $250,000 T243 Over $500,000 $31,250, plus 6.99% of the T244 excess over $500,000 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

Any732 such26 amountsSB981 ofFile ConnecticutNo. taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii)732 EachT234 taxpayerover whose$50,000 Connecticutexcess adjustedover gross$10,000 incomeT235 exceedsOver two$50,000 hundredbut thousandnot dollars$2,100, shallplus pay,5.5% inof additionthe toT236 over $100,000 excess over $50,000 T237 Over $100,000 but not $4,850, plus 6.0% of the taxT238 computedover under$200,000 excess over $100,000 Over $200,000 but not $10,850, plus 6.5% of the provisionsT239 T240 over $250,000 excess over $200,000 T241 Over $250,000 but not $14,100, plus 6.9% of subparagraphsthe (D)(i)T242 andover (D)(ii)$500,000 excess over $250,000 T243 Over $500,000 $31,350, plus 6.99% of the excess over $500,000 T244 (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, anfor each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount equalof the taxpayer's Connecticut taxable income to ninety-eightwhich the two-per-cent tax rate applies shall be reduced by one thousand dollars for each fivetwo thousand five hundred dollars, or fraction thereof, by which the taxpayer's LCOConnecticut No.adjusted gross income exceeds said amount.

4026Any 39such amount of 64Connecticut Governor'staxable Billincome No981to Connecticutwhich, adjustedas grossprovided incomein exceedsthe twopreceding hundredsentence, thousandthe dollars,two-per-cent uptax torate adoes maximumnot paymentapply ofshall twobe thousandan nineamount hundredto fortywhich dollars.the four-and-three-quarters-per-cent tax rate shall apply.

(iv)(iii) Each taxpayer whose Connecticut adjusted gross income exceeds fivetwo hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i),(D)(i) (D)(ii) and (D)(iii)(D)(ii) of this subdivision, an amount equal to fiftyninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds fivetwo hundred thousand dollars, up to a maximum payment of fourtwo hundredthousand fiftyseven hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax sSB981 / File No.

732 27 sSB981 File No.

732 computed under the provisions of subparagraphs (D)(i), (D)(ii) and (D)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i), (D)(ii), (D)(iii) and, if applicable, (D)(iv) of this subdivision, one hundred twenty-five dollars.

7.

Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to taxable years commencing on or after January 1, 2023):

(B) There shall be subtracted therefrom:

(i) To the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law;

(ii) To the extent allowable under section 12-718, exempt dividends sSB981 / File No.

732 28 sSB981 File No.

732 paid by a regulated investment company;

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

(iv) To the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits;

(v) To the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code for property placed in service after September 27, 2017, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years;

(vi) To the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut;

(vii) To the extent properly includable in determining the net gain or lossfromthesale orother dispositionofcapital assetsfor federalincome tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized;

(viii) Any interest on indebtedness incurred or continued to purchase sSB981 / File No.

732 29 sSB981 File No.

732 or carry obligations or securities the interest on which is subject to tax under thischapter butexempt fromfederalincome tax,totheextentthat such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual;

(ix) Ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual;

(x) (I) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes;

(II) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is sSB981 / File No.

732 30 sSB981 File No.

732 fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(III) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes;

and (IV) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or asamarriedindividual filing separately whosefederaladjustedgross income for such taxable year is seventy-five thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is one hundred thousand dollars or more or for a person who files a return under the federal income tax as a head sSB981 / File No.

732 31 sSB981 File No.

732 of household whose federal adjusted gross income for such taxable year is one hundred thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(xi) To the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746;

(xii) To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state;

(xiii) To the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state;

(xiv) To the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim;

(xv) To the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31- 51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder;

(xvi) To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section sSB981 / File No.

732 32 sSB981 File No.

732 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive;

(xvii) To the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code;

(xviii) To the extent properly includable in gross income for federal income tax purposesfor thetaxableyear,any income fromthedischarge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year;

(xix) To the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made;

(xx) To the extent properly includable in gross income for federal income tax purposes, (I) for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, (II) for the taxable years commencing January 1, 2016, to January 1, 2020, inclusive, twenty-five per cent of the income received from the state teachers' retirement system, and (III) for the taxable year commencing January 1, 2021, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system or, for a taxpayer whose federal adjusted gross sSB981 / File No.

732 33 sSB981 File No.

732 income does not exceed the applicable threshold under clause (xxi) of this subparagraph, the percentage pursuant to said clause of the income received from the state teachers' retirement system, whichever deduction is greater;

(xxi) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, and (IV) for the taxable year commencing January 1, 2022, [andeachtaxableyear thereafter,]onehundredper cent of any pension or annuity income;

(xxii) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2023, and each taxable year thereafter, in accordance with the following schedule, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is sSB981 / File No.

732 34 sSB981 File No.

732 less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars:

T245 Federal Adjusted Gross Income Deduction T246 Less than $75,000 100.0% T247 $75,000 but not over $77,499 85.0% T248 $77,500 but not over $79,999 70.0% T249 $80,000 but not over $82,499 55.0% T250 $82,500 but not over $84,999 40.0% T251 $85,000 but not over $87,499 25.0% T252 $87,500 but not over $89,999 10.0% T253 $90,000 but not over $94,999 5.0% T254 $95,000 but not over $99,999 2.5% T255 $100,000 and over 0.0% (xxiii) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2023, and each taxable year thereafter, in accordance with the following schedule for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred fifty thousand dollars:

T256 Federal Adjusted Gross Income Deduction T257 Less than $100,000 100.0% T258 $100,000 but not over $104,999 85.0% T259 $105,000 but not over $109,999 70.0% T260 $110,000 but not over $114,999 55.0% T261 $115,000 but not over $119,999 40.0% T262 $120,000 but not over $124,999 25.0% T263 $125,000 but not over $129,999 10.0% sSB981 / File No.

732 35 sSB981 File No.

732 $130,000 but not over $139,999 5.0% T264 T265 $140,000 but not over $149,999 2.5% $150,000 and over 0.0% T266 [(xxii)] (xxiv) The amount of lost wages and medical, travel and housing expenses, not to exceed ten thousand dollars in the aggregate, incurred by a taxpayer during the taxable year in connection with the donation to another person of an organ for organ transplantation occurring on or after January 1, 2017;

[(xxiii)] (xxv) To the extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 and 8-443;

[(xxiv)] (xxvi) To the extent properly includable in gross income for federal income tax purposes, the amount calculated pursuant to subsection (b) of section 12-704g for income received by a general partner of a venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to time;

[(xxv)] (xxvii) To the extent any portion of a deduction under Section 179 of the Internal Revenue Code was added to federal adjusted gross income pursuant to subparagraph (A)(xiv) of this subdivision in computing Connecticut adjusted gross income, twenty-five per cent of such disallowed portion of the deduction in each of the four succeeding taxable years;

[(xxvi)] (xxviii) To the extent properly includable in gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than [seventy-five] one hundred thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than [seventy-five] one hundred thousand dollars, or as a head of household sSB981 / File No.

732 36 sSB981 File No.

732 whose federal adjusted gross income for such taxable year is less than [seventy-five]onehundredthousanddollars, [orforahusbandand wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars,] (I) for the taxable year commencing January 1, 2023, twenty-five per cent of any distribution from an individual retirement account other than a Roth individual retirementaccount,(II)forthetaxableyearcommencingJanuary1,2024, fifty per cent of any distribution from an individual retirement account otherthana Rothindividualretirementaccount,(III)forthetaxableyear commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (IV) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

[;

and] The subtraction under this clause shall be made in accordance with the following schedule:

T267 Federal Adjusted Gross Income Deduction Less than $75,000 100.0% T268 T269 $75,000 but not over $77,499 85.0% $77,500 but not over $79,999 70.0% T270 T271 $80,000 but not over $82,499 55.0% $82,500 but not over $84,999 40.0% T272 T273 $85,000 but not over $87,499 25.0% $87,500 but not over $89,999 10.0% T274 T275 $90,000 but not over $94,999 5.0% $95,000 but not over $99,999 2.5% T276 T277 $100,000 and over 0.0% (xxix) To the extent properly includable in gross income for federal income tax purposes, for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred fifty thousand dollars, (I) for the taxable year commencing sSB981 / File No.

732 37 sSB981 File No.

732 January 1, 2023, twenty-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (III) for the taxable year commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (IV) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account.

The subtraction under this clause shall be made in accordance with the following schedule:

T278 Federal Adjusted Gross Income Deduction T279 Less than $100,000 100.0% $100,000 but not over $104,999 85.0% T280 T281 $105,000 but not over $109,999 70.0% $110,000 but not over $114,999 55.0% T282 T283 $115,000 but not over $119,999 40.0% $120,000 but not over $124,999 25.0% T284 T285 $125,000 but not over $129,999 10.0% $130,000 but not over $139,999 5.0% T286 T287 $140,000 but not over $149,999 2.5% $150,000 and over 0.0% T288 [(xxvii)] (xxx) To the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2022, the amount or amounts paid or otherwise credited to any eligible resident of this state under (I) the 2020 Earned Income Tax Credit enhancement program from funding allocated to the state throughtheCoronavirusReliefFundestablishedundertheCoronavirus Aid, Relief, and Economic Security Act, P.L.

116-136, and (II) the 2021 Earned Income Tax Credit enhancement program from funding allocated to the state pursuant to Section 9901 of Subtitle M of Title IX of the American Rescue Plan Act of 2021, P.L.

117-2;

sSB981 / File No.

732 38 sSB981 File No.

732 (xxxi) For a taxpayer licensed under the provisions of chapter 420f or 420h, the amount of the expenditures that would be eligible to be claimed as a deduction for federal income tax purposes but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act.

Sec.

8.

Section 12-217 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to income years commencing on or after January 1, 2023):

(a) (1) In arriving at net income as defined in section 12-213, whether or not the taxpayer is taxable under the federal corporation net income tax, there shall be deducted from gross income:

[,] (A) [all] All items deductible under the Internal Revenue Code effective and in force on the last day of the income year, except (i) any taxes imposed under the provisions of this chapter [which] that are paid or accrued in the income year and in the income year commencing January 1, 1989, and thereafter, any taxes in any state of the United States or any political subdivision of such state, or the District of Columbia, imposed on or measured by the income or profits of a corporation [which] that are paid or accrued in the income year, (ii) deductions for depreciation, which shall be allowed as provided in subsection (b) of this section, (iii) deductions for qualified domestic production activities income, as provided in Section 199 of the Internal Revenue Code, and (iv) in the case of any captive real estate investment trust,thedeductionfordividendspaidprovidedunderSection857(b)(2) of the Internal Revenue Code;

[,] and (B) [additionally] Additionally, in the case of a regulated investment company, the sum of (i) the exempt-interest dividends, as defined in the Internal Revenue Code, and (ii) expenses, bond premium, and interest related to tax-exempt income that are disallowed as deductions under the Internal Revenue Code;

[,] and (C)[in]Inthe case ofataxpayer maintaining aninternationalbanking sSB981 / File No.

732 39 sSB981 File No.

732 facility as defined in the laws of the United States or the regulations of the Board of Governors of the Federal Reserve System, as either may be amended from time to time, the gross income attributable to the international banking facility, provided [,] no expense or loss attributable to the international banking facility shall be a deduction under any provision of this section;

[,] and (D) [additionally] Additionally, in the case of all taxpayers, all dividends as defined in the Internal Revenue Code effective and in force on the last day of the income year not otherwise deducted from gross income, including dividends received from a DISC or former DISC as defined in Section 992 of the Internal Revenue Code and dividends deemed to have been distributed by a DISC or former DISC as provided in Section 995 of said Internal Revenue Code, other than thirty per cent of dividends received from a domestic corporation in which the taxpayer owns less than twenty per cent of the total voting power and value of the stock of such corporation;

[,] and (E) [additionally] Additionally, in the case of all taxpayers, the value of any capital gain realized from the sale of any land, or interest in land, to the state, any political subdivision of the state, or to any nonprofit land conservation organization where such land is to be permanently preserved as protected open space or to a water company, as defined in section 25-32a, where such land is to be permanently preserved as protected open space or as Class I or Class II water company land;

[,] and (F) [in] In the case of [manufacturers] a manufacturer, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the income year that such contribution is made to the extent not deductible for federal income tax purposes;

[,] and (G) [the] The amount of any contribution made on or after December 23, 2017, by the state of Connecticut or a political subdivision thereof to the extent included in a company's gross income under Section 118(b)(2) of the Internal Revenue Code;

and sSB981 / File No.

732 40 sSB981 File No.

732 (H) In the case of a taxpayer licensed under the provisions of chapter 420f or 420h, the amount of the expenditures that would be eligible to be claimed as a deduction for federal income tax purposes but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act.

(2) (A) No deduction shall be allowed for (i) expenses related to dividends that are allowable as a deduction or credit under the Internal Revenue Code, and (ii) federal taxes on income or profits, losses of other calendar or fiscal years, retroactive to include all calendar or fiscal years beginning after January 1, 1935, interest received from federal, state and local government securities, if any such deductions are allowed by the federal government.

(B) For purposes of this subdivision, expenses related to dividends shall equal five per cent of all dividends received by a company during an income year.

The net income associated with the disallowance of expenses related to dividends shall be apportioned, if the company conducts business within and without the state or is required to apportion its income under section 12-218b, in accordance with this chapter.

(3) Notwithstanding any provision of this section to the contrary, no dividendreceived fromarealestate investment trust shall bedeductible under thissectionby the recipient unlessthedividendis:

(A)Deductible under Section 243 of the Internal Revenue Code;

(B) received by a qualifieddividendrecipient fromaqualifiedrealestate investmenttrust and, as of the last day of the period for which such dividend is paid, persons, not including the qualified dividend recipient or any person that is either a related person to, or an employee or director of, the qualified dividend recipient, have outstanding cash capital contributions to the qualified real estate investment trust that, in the aggregate, exceed five per cent of the fair market value of the aggregate real estate assets, valued as of the last day of the period for which such dividend is paid, then held by the qualified real estate investment trust;

sSB981 / File No.

732 41 sSB981 File No.

732 or (C) received from a captive real estate investment trust that is subject to the tax imposed under this chapter.

For purposes of this section, "related person" has the same meaning as provided in section 12-217ii, "real estate assets" has the same meaning as provided in Section 856 of the Internal Revenue Code, "qualified dividend recipient" means a dividendrecipientwhohasinvestedinaqualifiedrealestateinvestment trust prior to April 1, 1997, and "qualified real estate investment trust" means an entity that both was incorporated and had contributed to it a minimum of five hundred million dollars' worth of real estate assets prior to April 1, 1997, and that elects to be a real estate investment trust under Section 856 of the Internal Revenue Code prior to April 1, 1998.

(4) Notwithstanding any provision of this section:

[to the contrary,] (A) [any] Any excess of the deductions provided in this section for any income year commencing on or after January 1, 1973, over the gross income for such year or the amount of such excess apportioned to this state under the provisions of this chapter, shall be an operating loss of such income year andshallbedeductibleasan operating losscarry-over foroperatinglossesincurredpriortoincomeyearscommencingJanuary 1, 2000, in each of the five income years following such loss year, and for operating losses incurred in income years commencing on or after January 1, 2000, in each of the twenty income years following such loss year, except that:

(i) [for] For income years commencing prior to January 1, 2015, the portion of such operating loss [which] that may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of (I) any net income greater than zero of such income year following such loss year, or in the case of a company entitled to apportion its net income under the provisions of this chapter, the amount of such net income [which] that is apportioned to this state pursuant thereto, or (II) the excess, if any, of such operating loss over the total of such net income for each of any prior income years following such loss year, such net income of each of such prior income years following such loss year for such purposes being computed without sSB981 / File No.

732 42 sSB981 File No.

732 regard to any operating loss carry-over from such loss year allowed under this subparagraph and being regarded as not less than zero, and provided further the operating loss of any income year shall be deducted in any subsequent year, to the extent available for such deduction, before the operating loss of any subsequent income year is deducted;

[,] (ii) [for] For income years commencing on or after January 1, 2015, the portion of such operating loss [which] that may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of (I) fifty per cent of net income of such income year following such loss year, or in the case of a company entitled to apportion its net income under the provisions of this chapter, fifty per cent of such net income [which] that is apportioned to this state pursuant thereto, or (II) the excess, if any, of such operating loss over the operating loss deductions allowable with respect to such operating loss under this subparagraph for each of any prior income years following such loss year, such net income of each of such prior income years following such loss year for such purposes being computed without regard to any operating loss carry-over from such loss year allowed under this subparagraph and being regarded as not less than zero, and provided further the operating loss of any income year shall be deducted in any subsequent year, to the extent available for such deduction, before the operating loss of any subsequent income year is deducted;

[,] and (iii) [if] If a combined group so elects, the combined group shall relinquish fifty per cent of its unused operating losses incurred prior to the income year commencing on or after January 1, 2015, and before January 1, 2016, and may utilize the remaining operating loss carry-over without regard to the limitations prescribed in subparagraph (A)(ii) of this subdivision.

The portion of such operating loss carry-over that may be deducted shall be limited to the amount required to reduce a combined group's tax under this chapter, prior to surtax and prior to the application of credits, to two million five hundred thousand dollars in any income year commencing on or after January 1, 2015.

Only after the sSB981 / File No.

732 43 sSB981 File No.

732 combined group's remaining operating loss carry-over for operating losses incurred prior to income years commencing January 1, 2015, has been fully utilized, will the limitations prescribed in subparagraph (A)(ii) of this subdivision apply.

The combined group, or any member thereof, shall make such election on its return for the income year beginning on or after January 1, 2015, and before January 1, 2016, by the due date for such return, including any extensions.

Only combined groups with unused operating losses in excess of six billion dollars from income years beginning prior to January 1, 2013, may make the election prescribed in this clause;

[,] and (B)[any]Anynetcapitalloss,asdefinedintheInternalRevenueCode effective and in force on the last day of the income year, for any income year commencing on or after January 1, 1973, shall be allowed as a capital loss carry-over to reduce, but not below zero, any net capital gain, as so defined, in each of the five following income years, in order of sequence, to the extent not exhausted by the net capital gain of any of the preceding of such five following income years;

[,] and (C) [any] Any net capital losses allowed and carried forward from prior years to income years beginning on or after January 1, 1973, for federal income tax purposes by companies entitled to a deduction for dividends paid under the Internal Revenue Code other than companies subject to the gross earnings taxes imposed under chapters 211 and 212, shall be allowed as a capital loss carry-over.

(5) This section shall not apply to a life insurance company as defined in the Internal Revenue Code effective and in force on the last day of the income year.

For purposes of this section, the unpaid loss reserve adjustment required for nonlife insurance companies under the provisions of Section 832(b)(5) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall be applied without making the adjustment in Subparagraph (B) of said Section 832(b)(5).

(6) For purposes of determining net income under this section for income years commencing on or after January 1, 2018, the deduction sSB981 / File No.

732 44 sSB981 File No.

732 allowed for business interest paid or accrued shall be determined as provided under the Internal Revenue Code, except that in making such determination, the provisions of Section 163(j) shall not apply.

(b) (1) For purposes of determining net income under this section, the deduction allowed for depreciation shall be determined as provided under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, provided in making such determination, the provisions of Section 168(k) of said code shall not apply.

(2) (A) For purposes of determining net income under this section for taxable years ending after December 31, 2008, and to the extent any income from the discharge of indebtedness, under Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in said Section 108, as amended by said Section 1231, is not properly includable in gross income for federal income tax purposes for the taxable year, any deferral of the recognition of any such income shall not be allowed.

(B) To the extent that any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, is properly includable in gross income for federal income tax purposes for the taxable year, any such income shall be deductible in computing net income under this section for a taxable year ending after December 31, 2008, to the extent that the deferral of recognition of such income from such discharge was not allowed pursuant to subparagraph (A) of this subdivision in computing net income for a preceding taxable year.

(C) For income years commencing on or after January 1, 2018, eighty sSB981 / File No.

732 45 sSB981 File No.

732 per cent of any deduction claimed under Section 179 of the Internal Revenue Code for federal income tax purposes shall be disallowed.

To the extent such a deduction is disallowed for purposes of computing the tax under this chapter, twenty-five per cent of the disallowed portion of the deduction shall be allowed as a deduction in each of the four succeeding income years.

(c) (1) Notwithstanding the provisions of subsections (a) and (b) of this section, "net income", in the case of an S corporation, means the percentage of the nonseparately computed income or loss, as defined in Section 1366(a)(2) of the Internal Revenue Code, of such S corporation, without separate state adjustment pursuant to section 12-233 or 12-226a forthecompensationofanyofficeroremployee,towhichshallbeadded (A) any taxes imposed under the provisions of this chapter [which] that are paid or accrued in the income year, and (B) any taxes in any state of theUnitedStatesoranypoliticalsubdivisionofsuchstate,ortheDistrict of Columbia, imposed on or measured by the income or profits of a corporation [which] that are paid or accrued in the income year as provided in subdivision (2) of this subsection.

(2) For income years commencing prior to January 1, 1997, "net income" means one hundred per cent of the amount computed under subdivision (1) of this subsection;

for income years commencing on or after January 1, 1997, and prior to January 1, 1998, "net income" means ninety per cent of the amount computed under subdivision (1) of this subsection;

for income years commencing on or after January 1, 1998, and prior to January 1, 1999, "net income" means seventy-five per cent of the amount computed under subdivision (1) of this subsection;

for income years commencing on or after January 1, 1999, and prior to January 1, 2000, "net income" means fifty-five per cent of the amount computed under subdivision (1) of this subsection;

for income years commencing on or after January 1, 2000, and prior to January 1, 2001, "net income" means thirty per cent of the amount computed under subdivision (1) of this subsection;

for income years commencing on or after January 1, 2001, net income of S corporations as computed under subdivision (1) of this subsection shall not be subject to the tax under sSB981 / File No.

732 46 sSB981 File No.

732 this chapter.

Any S corporation subject to the tax on net income as provided in this section shall be eligible for any credit against the tax otherwise available to taxpayers under this chapter only to the extent andinthesamepercentageasnetincomeofsuchScorporationissubject to taxation under this chapter, except that any S corporation with an income year commencing on or after January 1, 1999, but before December 31, 2000, shall be eligible for the entire credit available under sections 8-395, 12-633, 12-634, 12-635 and 12-635a.

(d) The commissioner may adopt regulations in accordance with chapter 54, relating to mergers or consolidations of corporations providing for the deduction, by the surviving or new corporation provided for in the plan of consolidation, of operating losses that were incurred by a merging or consolidating corporation,respectively,before the merger or consolidation, respectively.

Such regulations may follow the provisions of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, or the regulations thereunder.

(e) Where a combined group is required to file a combined unitary tax return pursuant to section 12-222, the combined group's net income shall be computed as provided in subsection (a) of section 12-218e.

(f) Where a combined group is requiredto filea combined unitary tax return pursuant to section 12-222, a taxable member's net operating loss apportioned to this state shall be deducted and carried over by the taxable member as provided in subsection (d) of section 12-218e.

Sec.

9.

Section 12-217jj of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2024):

(a) As used in this section:

(1) "Commissioner" means the Commissioner of Revenue Services.

(2) "Department" means the Department of Economic and Community Development.

sSB981 / File No.

732 47 sSB981 File No.

732 (3) (A) "Qualified production" means entertainment content created in whole or in part within the state, including motion pictures, except as otherwise provided in this subparagraph;

documentaries;

long-form, specials, mini-series, series, sound recordings, videos and music videos and interstitials television programming;

interactive television;

relocated television production;

interactive games;

videogames;

commercials;

any format of digital media, including an interactive web site, created for distribution or exhibition to the general public;

and any trailer, pilot, video teaser or demo created primarily to stimulate the sale, marketing, promotionor exploitationoffuture investment ineither a product or a qualified production via any means and media in any digital media format, film or videotape, provided such program meets alltheunderlying criteriaofaqualifiedproduction.For state fiscalyears ending on or after June 30, 2014, "qualified production" shall not include a motion picture that has not been designated as a state-certified qualified production prior to July 1, 2013, and no tax credit voucher for such motion picture may be issued for such motion picture, except, for state fiscal years ending on or after June 30, 2015, "qualified production" shall include a motion picture for which twenty-five per cent or more of theprincipalphotography shooting daysare inthisstate atafacility that receives not less than twenty-five million dollars in private investment and opens for business on or after July 1, 2013, and a tax credit voucher may be issued for such motion picture.

(B) "Qualified production" shall not include any ongoing television programcreated primarily asnews,weather or financial market reports;

a production featuring current events, other than a relocated television production, sporting events, an awards show or other gala event;

a production whose sole purpose is fundraising;

a long-form production that primarily markets a product or service;

a production used for corporate training or in-house corporate advertising or other similar productions;

or any production for which records are required to be maintained under 18 USC 2257, as amended from time to time, with respect to sexually explicit content.

(4) "Eligible production company" means a corporation, partnership, sSB981 / File No.

732 48 sSB981 File No.

732 limited liability company, or other business entity engaged in the business of producing qualified productions on a one-time or ongoing basis, and qualified by the Secretary of the State to engage in business in the state.

(5) "Production expenses or costs" means all expenditures clearly and demonstrably incurred in the state in the preproduction, production or postproduction costs of a qualified production, including:

(A) Expenditures incurred in the state in the form of either compensation or purchases including production work, production equipment not eligible for the infrastructure tax credit provided in section 12-217kk, production software, postproduction work, postproduction equipment, postproduction software, set design, set construction, props, lighting, wardrobe, makeup, makeup accessories, special effects, visual effects, audio effects, film processing, music, sound mixing, editing, location fees, soundstages and any and all other costs or services directly incurred in connection with a state-certified qualified production;

(B) Expenditures for distribution, including preproduction, production or postproduction costs relating to the creation of trailers, marketing videos, commercials, point-of-purchase videos and any and all content created on film or digital media, including the duplication of films, videos, CDs, DVDs and any and all digital files now in existence and those yet to be created for mass consumer consumption;

the purchase, by a company in the state, of any and all equipment relating to the duplication or mass market distribution of any content created or produced in the state by any digital media format which is now in use and those formats yet to be created for mass consumer consumption;

and (C) "Production expenses or costs" does not include the following:

(i) On and after January 1, 2008, compensation in excess of fifteen million dollars paid to any individual or entity representing an individual, for services provided in the production of a qualified production and on or after January 1, 2010, compensation subject to Connecticut personal sSB981 / File No.

732 49 sSB981 File No.

732 income tax in excess of twenty million dollars paid in the aggregate to any individuals or entities representing individuals, for star talent provided in the production of a qualified production;

(ii) media buys, promotional events or gifts or public relations associated with the promotion or marketing of any qualified production;

(iii) deferred, leveraged or profit participation costs relating to any and all personnel associated with any and all aspects of the production, including, but not limited to, producer fees, director fees, talent fees and writer fees;

(iv) costs relating to the transfer of the production tax credits;

(v) any amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the qualified production;

and (vi) any expenses or costsrelating to an independent certification, as required by subsection (h) of this section, or as the department may otherwise require, pertaining to the amount of production expenses or costs set forth by an eligible production company in its application for a production tax credit.

(6) "Sound recording" means a recording of music, poetry or spoken- word performance, but does not include the audio portions of dialogue or words spoken and recorded as part of a motion picture, video, theatrical production, television news coverage or athletic event.

(7) "State-certified qualified production" means a qualified production produced by an eligible production company that (A) is in compliance with regulations adopted pursuant to subsection (l) of this section, (B) is authorized to conduct business in this state, and (C) has been approved by the department as qualifying for a production tax credit under this section.

(8) "Interactive web site" means a web site, the production costs of which (A) exceed five hundred thousand dollars per income year, and (B) is primarily (i) interactive games or end user applications, or (ii) animation, simulation, sound, graphics, story lines or video created or repurposed for distribution over the Internet.

An interactive web site does not include a web site primarily used for institutional, private, industrial, retail or wholesale marketing or promotional purposes, or sSB981 / File No.

732 50 sSB981 File No.

732 which contains obscene content.

(9) "Post-certification remedy" means the recapture, disallowance, recovery, reduction, repayment, forfeiture, decertification or any other remedy that would have the effect of reducing or otherwise limiting the use of a tax credit provided by this section.

(10) "Compensation" means base salary or wages and does not include bonus pay, stock options, restricted stock units or similar arrangements.

(11) "Relocated television production" means:

(A) An ongoing television program all of the prior seasons of which were filmed outside this state, and may include current events shows, except those referenced in subparagraph (B)(i) of this subdivision.

(B) An eligible production company's television programming in this state that (i) is not a general news program, sporting event or game broadcast, and (ii) is created at a qualified production facility that has had a minimum investment of twenty-five million dollars made by such eligible production company on or after January 1, 2012, at which facility the eligible production company creates ongoing television programming as defined in subparagraph (A) of this subdivision, and creates at least two hundred new jobs in Connecticut on or after January 1, 2012.

For purposes of this subdivision, "new job" means a full-time job, as defined in section 12-217ii, that did not exist in this state prior to January 1, 2012, and is filled by a new employee, and "new employee" includes a person who was employed outside this state by the eligible production company prior to January 1, 2012, but does not include a person who was employed in this state by the eligible production company or a related person, as defined in section 12-217ii, with respect to the eligible production company during the prior twelve months.

(C) A relocated television production may be a state-certified qualified production for not more than ten successive income years, after which period the eligible production company shall be ineligible sSB981 / File No.

732 51 sSB981 File No.

732 to resubmit an application for certification.

(b) (1) The Department of Economic and Community Development shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section for eligible production companies producing a state-certified qualified production in the state.

(2) Any eligible production company incurring production expenses or costs shall be eligible for a credit (A) for income years commencing on or after January 1, 2010, but prior to January 1, 2018, against the tax imposed under chapter 207 or this chapter, (B) for income years commencing on or after January 1, 2018, but prior to January 1, 2022, against the tax imposed under chapter 207 or 211 or this chapter, and (C)for income yearscommencing on or after January 1,2022,against the tax imposed under chapter 207, 211, 219 or this chapter, as follows:

(i) For any such company incurring such expenses or costs of not less than one hundred thousand dollars, but not more than five hundred thousand dollars, a credit equal to ten per cent of such expenses or costs, (ii) for any such company incurring such expenses or costs of more than five hundred thousand dollars, but not more than one million dollars, a credit equal to fifteen per cent of such expenses or costs, and (iii) for any suchcompanyincurringsuchexpensesorcostsofmorethanonemillion dollars, a credit equal to thirty per cent of such expenses or costs.

(c) No eligible production company incurring an amount of production expenses or costs that qualifies for such credit shall be eligible for such credit unless on or after January 1, 2010, such company conducts (1) not less than fifty per cent of principal photography days within the state, or (2) expends not less than fifty per cent of postproduction costs within the state, or (3) expends not less than one million dollars of postproduction costs within the state.

(d) For income years commencing on or after January 1, 2010, no expenses or costs incurred outside the state and used within the state shall be eligible for a credit, and one hundred per cent of such expenses or costs shall be counted toward such credit when incurred within the state and used within the state.

sSB981 / File No.

732 52 sSB981 File No.

732 (e) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, any credit allowed pursuant to this section may be sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers, provided (A) no credit, after issuance, may be sold, assigned or otherwise transferred, in whole or in part, more than three times, (B) in the case of a credit allowed for the income year commencing on or after January 1, 2011, [and] but prior to January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than fifty per cent of such credit in any one income year, and (C) in the case of a credit allowed for an income year commencing on or after January 1, 2012, any entity that is not subject to tax under chapter 207 or this chapter may transfer not more than twenty-five per cent of such credit in any one income year.

(2) Notwithstanding the provisions of subdivision (1) of this subsection, any entity that is not subject to tax under this chapter or chapter 207 shall not be subject to the limitations on the transfer of credits provided in subparagraphs (B) and (C) of said subdivision (1), provided such entity owns not less than fifty per cent, directly or indirectly, of a business entity, as defined in section 12-284b.

(3) Notwithstanding the provisions of subdivision (1) of this subsection, any qualified production that is created in whole or in significant part, as determined by the Commissioner of Economic and Community Development, at a qualified production facility shall not be subject to the limitations of subparagraph (B) or (C) of said subdivision (1).

For purposes of this subdivision, "qualified production facility" means a facility (A) located in this state, (B) intended for film, television or digital media production, and (C) that has had a minimum investment of three million dollars, or less if the Commissioner of Economic and Community Development determines such facility otherwise qualifies.

(4) (A) For the income year commencing on or after January 1, 2018, butpriortoJanuary1, 2019,anycreditthatis sold,assignedorotherwise transferred, in whole or in part, to one or more taxpayers pursuant to sSB981 / File No.

732 53 sSB981 File No.

732 subdivision (1) of this subsection may be claimed against the tax imposedunderchapter211onlyifthereiscommonownershipofatleast fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit.

Such taxpayer may only claim ninety-two per cent of the amount of such credit entered by the department on the production tax credit voucher.

(B) For income years commencing on or after January 1, 2019, any credit that is sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers pursuant to subdivision (1) of this subsection, which credit is claimed against the tax imposed under chapter 211, shall be subject to the following limits:

(i) The taxpayer may only claim ninety-five per cent of the amount of such credit entered by the department on the production tax credit voucher;

and (ii) If there is common ownership of at least fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit, such taxpayer may only claim ninety-two per cent of the amount of such credit entered by the department on the production tax credit voucher.

(5) (A) For income years commencing on or after January 1, 2022, but prior to January 1, 2024, any credit that is claimed against the tax imposed under chapter 219 shall be subject to the following limits:

[(A)] (i) Any credit that is sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers pursuant to subdivision (1) ofthissubsectionmay beclaimedagainstthetaximposedunderchapter 219 only if there is common ownership of at least fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit;

and [(B)] (ii) The eligible production company or taxpayer claiming the credit against the tax imposed under chapter 219 may only claim seventy-eight per cent of the amount of such credit entered by the sSB981 / File No.

732 54 sSB981 File No.

732 department on the production tax credit voucher.

(B) For income years commencing on or after January 1, 2024, any credit that is claimed against the tax imposed under chapter 219 shall be subject to the following limits:

(i) Any credit that is sold, assigned or otherwise transferred, in whole or in part, to one or more taxpayers pursuant to subdivision (1) of this subsection may be claimed against the tax imposed under chapter 219 only ifthere is commonownershipof at least fifty per cent between such taxpayer and the eligible production company that sold, assigned or otherwise transferred such credit;

and (ii) The eligible production company or taxpayer claiming the credit against the tax imposed under chapter 219 may only claim ninety-two per cent of the amount of such credit entered by the department on the production tax credit voucher.

(f) (1) On and after July 1, 2006, and for income years commencing on or after January 1, 2006, but prior to January 1, 2015, all or part of any such credit allowed under this section may be claimed against the tax imposed under chapter 207 or this chapter for the income year in which the production expenses or costs were incurred, or in the three immediately succeeding income years.

(2) For production tax credit vouchers issued on or after July 1, 2015, but prior to January 1,2018,allor part ofanysuch credit may beclaimed against the tax imposed under chapter 207 or this chapter, for the income year in which the production expenses or costs were incurred, or in the five immediately succeeding income years.

(3) For production tax credit vouchers issued on or after July 1, 2018, but prior to January 1,2022,allor part ofanysuch credit may beclaimed against the tax imposed under chapter 207 or 211 or this chapter, for the income year in which the production expenses or costs were incurred, or in the five immediately succeeding income years.

(4) For production tax credit vouchers issued on or after January 1, sSB981 / File No.

732 55 sSB981 File No.

732 2022, all or part of any such credit may be claimed against the tax imposed under chapter 207, 211, 219 or this chapter, for the income year in which the production expenses or costs were incurred, or in the five immediately succeeding income years.

(g) Any production tax credit allowed under this section shall be nonrefundable.

(h) (1) An eligible production company shall apply to the department forataxcreditvoucheronanannualbasis,butnotlaterthanninetydays after the first production expenses or costs are incurred in the production of a qualified production, and shall provide with such application such information as the department may require to determine suchcompany'seligibility to claimacredit under thissection.

No production expenses or costs may be listed more than once for purposes of the tax credit voucher pursuant to this section, or pursuant to section 12-217kk or 12-217ll, and if a production expense or cost has been included in a claim for a credit, such production expense or cost may not be included in any subsequent claim for a credit.

(2) Not later than ninety days after the end of the annual period, or afterthelastproductionexpensesorcostsare incurredintheproduction of a qualified production, an eligible production company shall apply to the department for a production tax credit voucher, and shall provide with such application (A) a report that includes the number of full-time jobs and the number of part-time jobs created by the eligible production company during the annual period, a description of each such job and an explanation of what the eligible production company considers to be job creation for purposes of the report, and (B) such information and independent certification as the department may require pertaining to the amount of such company's production expenses or costs.

Such independent certification shall be provided by an audit professional chosen from a list compiled by the department.

If the department determines that such company is eligible to be issued a production tax credit voucher, the department shall enter on the voucher the amount of production expenses or costs that has been established to the sSB981 / File No.

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732 satisfaction of the department and the amount of such company's credit under thissection.The department shallprovideacopy ofsuch voucher to the commissioner, upon request.

(3) The department shall charge a reasonable administrative fee sufficient to cover the department's costs to analyze applications submitted under this section.

(i) If an eligible production company sells, assigns or otherwise transfers a credit under this section to another taxpayer, the transferor and transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer.

If such transferee sells, assigns or otherwise transfers a credit under this section to a subsequent transferee, such transferee and such subsequent transferee shall jointly submit written notification of such transfer to the department not later than thirty days after such transfer.

The notification after each transfer shall include the credit voucher number, the date of transfer, the amount of such credit transferred, the tax credit balance before and after the transfer, the tax identification numbers for both the transferor and the transferee, and any other information required by the department.

Failure to comply with this subsection will result in a disallowance of the tax credit until there is full compliance on the part of the transferor and the transferee, and for a second or third transfer, on the part of all subsequent transferors and transferees.

The department shall provide a copy of the notification of assignment to the commissioner upon request.

(j) Any eligible production company that submits information to the department that it knows to be fraudulent or false shall, in addition to any other penalties provided by law, be liable for a penalty equal to the amount of such company's credit entered on the production tax credit voucher issued under this section.

(k) No tax credits transferred pursuant to this section shall be subject to a post-certification remedy, and the department and the commissioner shall have no right, except in the case of possible material misrepresentation or fraud, to conduct any further or additional review, sSB981 / File No.

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732 examination or audit of the expenditures or costs for which such tax credits were issued.

The sole and exclusive remedy of the department and the commissioner shall be to seek collection of the amount of such tax credits from the entity that committed the fraud or misrepresentation.

(l) The department, in consultation with the commissioner, shall adopt regulations, in accordance with the provisions of chapter 54, as may be necessary for the administration of this section.

Sec.

10.

Subsection (a) of section 32-1m of the general statutes is repealedandthefollowingissubstitutedinlieuthereof(EffectiveJanuary 1, 2024):

(a) Not later than February first, annually, the Commissioner of Economic and Community Development shall submit a report to the Governor, the Auditors of Public Accounts and the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, finance, revenue and bonding and commerce, in accordance with the provisions ofsection11-4a.

Not later thanthirty daysafter submissionofthereport, said commissioner shall post the report on the Department of Economic and Community Development's web site.