2023 Connecticut General Statutes › Title 32 - Commerce and Economic and Community Development › Chapter 578 - Department of Economic and Community Development › Section 32-7t. - JobsCT tax rebate program. Eligibility. Applications. Rebate amount calculation. Report.

(a) As used in this section:
(1) “Commissioner” means the Commissioner of Economic and Community Development;
(2) “Discretionary FTE” means an FTE that is paid qualified wages and does not meet the threshold wage requirements to be a qualified FTE but is approved by the commissioner pursuant to subdivision (4) of subsection (c) of this section;
(3) “Distressed municipality” has the same meaning as provided in section 32-9p;
(4) “Full-time equivalent” or “FTE” means the number of employees employed at a qualified business, calculated in accordance with subsection (d) of this section;
(5) “Full-time job” means a job in which an employee is required to work at least thirty-five or more hours per week. “Full-time job” does not include a temporary or seasonal job;
(6) “Median household income” means the median annual household income for residents in a municipality as calculated from the U.S. Census Bureau's five-year American Community Survey or another data source, at the sole discretion of the commissioner;
(7) “New employee” means a person or persons hired by the qualified business to fill a full-time equivalent position. A new employee does not include a person who was employed in this state by a related person with respect to the qualified business within twelve months prior to a qualified business' application to the commissioner for a rebate allocation notice for a job creation rebate pursuant to subsection (c) of this section;
(8) “New FTEs” means the number of FTEs that (A) did not exist in this state at the time of a qualified business' application to the commissioner for a rebate allocation notice for a job creation rebate pursuant to subsection (c) of this section, (B) are not the result of FTEs acquired due to a merger or acquisition, (C) are filled by a new employee, (D) are qualified FTEs, and (E) are not FTEs hired to replace FTEs that existed in the state after January 1, 2020. The commissioner may issue guidance on the implementation of this definition;
(9) “New FTEs created” means the number of new FTEs that the qualified business is employing at a point-in-time at the end of the relevant time period;
(10) “New FTEs maintained” means the total number of new FTEs employed throughout a relevant time period;
(11) “Opportunity zone” means a population census tract that is a low-income community that is designated as a “qualified opportunity zone” pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to time;
(12) “Part-time job” means a job in which an employee is required to work less than thirty-five hours per week. “Part-time job” does not include a temporary or seasonal job;
(13) “Qualified business” means a person that is (A) engaged in business in an industry related to finance, insurance, manufacturing, clean energy, bioscience, technology, digital media or any similar industry, as determined by the sole discretion of the commissioner, and (B) subject to taxation under chapter 207, 208 or 228z;
(14) “Qualified FTE” means an FTE who is paid qualified wages of at least eighty-five per cent of the median household income for the location where the FTE position is primarily located, scaled in proportion to the FTE fraction, or thirty-seven thousand five hundred dollars, scaled in proportion to the FTE fraction, whichever is greater;
(15) “Qualified wages” means wages sourced to this state pursuant to section 12-705;
(16) “Rebate period” means the calendar years in which a tax rebate provided for in this section is to be paid pursuant to a contract executed pursuant to subsection (c) of this section; and
(17) “Related person” means (A) a corporation, limited liability company, partnership, association or trust controlled by the qualified business, (B) an individual, corporation, limited liability company, partnership, association or trust that is in control of the qualified business, (C) a corporation, limited liability company, partnership, association or trust controlled by an individual, corporation, limited liability company, partnership, association or trust that is in control of the qualified business, or (D) a member of the same controlled group as the qualified business. For the purposes of this subdivision, “control” means (i) ownership, directly or indirectly, of stock possessing fifty per cent or more of the total combined voting power of all classes of the stock of a corporation entitled to vote, (ii) ownership, directly or indirectly, of fifty per cent or more of the capital or profits interest in a partnership, limited liability company or association, or (iii) ownership, directly or indirectly, of fifty per cent or more of the beneficial interest in the principal or income of a trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership, of a limited liability company or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, other than paragraph (3) of said section.
(b) There is established a JobsCT tax rebate program under which qualified businesses that create jobs in this state, in accordance with the provisions of this section, may be allowed a tax rebate, which shall be treated as a credit against the tax imposed under chapter 208 or 228z or as an offset of the tax imposed under chapter 207.
(c) (1) To be eligible to claim a rebate under this section, a qualified business shall apply to the commissioner in accordance with the provisions of this subsection. The application shall be on a form prescribed by the commissioner and may require information, including, but not limited to, the number of new FTEs to be created by the qualified business, the number of current FTEs employed by the qualified business, feasibility studies or business plans for the increased number of FTEs, projected state and local revenue that may reasonably derive as a result of the increased number of FTEs and any other information necessary to determine whether there will be net benefits to the economy of the municipality or municipalities in which the qualified business is primarily located and the state.
(2) Upon receipt of an application, the commissioner shall determine (A) whether the qualified business making the application will be reasonably able to meet the FTE hiring targets and other metrics as presented in such application, (B) whether such qualified business' proposed job growth would provide a net benefit to economic development and employment opportunities in the state, and (C) whether such qualified business' proposed job growth will exceed the number of jobs at the business that existed prior to January 1, 2020. The commissioner may require the applicant to submit additional information to evaluate an application. Each qualified business making an application shall satisfy the requirements of this subdivision, as determined by the commissioner, to be eligible for the JobsCT tax rebate program.
(3) The commissioner, upon consideration of an application and any additional information, may approve an application in whole or in part or may approve an application with amendments. If the commissioner disapproves an application, the commissioner shall identify the defects in such application and explain the specific reasons for the disapproval. The commissioner shall render a decision on an application not later than ninety days after the date of its receipt by the commissioner.
(4) The commissioner may approve an application in whole or in part by a qualified business that creates new discretionary FTEs or may approve such an application with amendments if a majority of such new discretionary FTEs are individuals who (A) because of a disability, are receiving or have received services from the Department of Aging and Disability Services; (B) are receiving employment services from the Department of Mental Health and Addiction Services or participating in employment opportunities and day services, as defined in section 17a-226, operated or funded by the Department of Developmental Services; (C) have been unemployed for at least six of the preceding twelve months; (D) have been convicted of a misdemeanor or felony; (E) are veterans, as defined in section 27-103; (F) have not earned any postsecondary credential and are not currently enrolled in an postsecondary institution or program; or (G) are currently enrolled in a workforce training program fully or substantially paid for by the employer that results in such individual earning a postsecondary credential.
(5) The commissioner may combine approval of an application with the exercise of any of the commissioner's other powers, including, but not limited to, the provision of other financial assistance.
(6) The commissioner shall enter into a contract with an approved qualified business, which shall include, but need not be limited to, a requirement that the qualified business consent to the Department of Economic and Community Development's access of data compiled by other state agencies, including, but not limited to, the Labor Department, for the purposes of audit and enforcement and, if a qualified business is approved by the commissioner in accordance with subdivision (4) of this subsection, the required wage such business shall pay new discretionary FTEs to qualify for the tax rebates provided for in subsection (f) of this section.
(7) Upon signing a contract with an approved qualified business, the commissioner shall issue a rebate allocation notice stating the maximum amount of each rebate available to such business for the rebate period and the specific terms that such business shall meet to qualify for each rebate. Such notice shall certify to the approved qualified business that the rebates may be claimed by such business if it meets the specific terms set forth in the notice.
(d) For the purposes of this section, the FTE of a full-time job or part-time job is based on the hours worked or expected to be worked by an employee in a calendar year. A job in which an employee worked or is expected to work one thousand seven hundred fifty hours or more in a calendar year equals one FTE. A job in which an employee worked or is expected to work less than one thousand seven hundred fifty hours equals a fraction of one FTE, where the fraction is the number of hours worked in a calendar year divided by one thousand seven hundred fifty. The commissioner shall have the discretion to adjust the calculation of FTE.
(e) (1) In each calendar year of the rebate period, a qualified business approved by the commissioner pursuant to subdivision (3) of subsection (c) of this section that employs at least twenty-five new FTEs in this state by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed shall be allowed a rebate equal to the greater of the following amounts:
(A) The sum of:
(i) The lesser of (I) the new FTEs created in an opportunity zone or distressed municipality on December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) the new FTEs maintained in an opportunity zone or distressed municipality in the previous calendar year, multiplied by fifty per cent of the income tax that would be paid on the average wage of the new FTEs, as determined by the applicable marginal rate set forth in chapter 229 for an unmarried individual based solely on such wages; and
(ii) The lesser of (I) the new FTEs created on December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) the new FTEs maintained in a location other than an opportunity zone or distressed municipality in the previous calendar year, multiplied by twenty-five per cent of the income tax that would be paid on the average wage of the new FTEs, as determined by the applicable marginal rate set forth in chapter 229 for an unmarried individual based solely on such wages; or
(B) The greater of:
(i) One thousand dollars multiplied by the lesser of (I) the new FTEs created by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) the new FTEs maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed; or
(ii) For tax credits earned, claimed or payable prior to January 1, 2024, two thousand dollars multiplied by the lesser of (I) the new FTEs created by December 31, 2022, or (II) the new FTEs maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(2) In no event shall the rebate under this subsection exceed in any calendar year of the rebate period five thousand dollars multiplied by the lesser of (A) the new FTEs created by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (B) the new FTEs maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(3) In no event shall an approved qualified business receive a rebate under this subsection in any calendar year of the rebate period if such business has not maintained at least twenty-five new FTEs in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(f) (1) In each calendar year of the rebate period, a qualified business approved by the commissioner pursuant to subdivision (4) of subsection (c) of this section that employs at least twenty-five new discretionary FTEs in this state by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed shall be allowed a rebate equal to the sum of the amount calculated pursuant to subdivision (1) of subsection (e) of this section and the greater of the following:
(A) The sum of:
(i) The lesser of the new discretionary FTEs (I) created in an opportunity zone or distressed municipality on December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) maintained in an opportunity zone or distressed municipality in the previous calendar year, multiplied by fifty per cent of the income tax that would be paid on the average wage of the new discretionary FTEs, as determined by the applicable marginal rate set forth in chapter 229 for an unmarried individual based solely on such wages; and
(ii) The lesser of the new discretionary FTEs (I) created on December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) maintained in a location other than an opportunity zone or distressed municipality in the previous calendar year, multiplied by twenty-five per cent of the income tax that would be paid on the average wage of the new discretionary FTEs, as determined by the applicable marginal rate set forth in chapter 229 for an unmarried individual based solely on such wages; or
(B) The greater of:
(i) Seven hundred fifty dollars multiplied by the lesser of the new discretionary FTEs (I) created by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (II) maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed; or
(ii) For tax credits earned, claimed or payable prior to January 1, 2024, one thousand five hundred dollars multiplied by the lesser of (I) the new FTEs created by December 31, 2022, or (II) the new FTEs maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(2) In no event shall the rebate under this section exceed in any calendar year of the rebate period five thousand dollars multiplied by the lesser of the new discretionary FTEs (A) created by December thirty-first of the calendar year that is two calendar years prior to the calendar year in which the rebate is being claimed, or (B) maintained in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(3) In no event shall an approved qualified business receive a rebate under this subsection in any calendar year of the rebate period if such business has not maintained at least twenty-five new discretionary FTEs in the calendar year immediately prior to the calendar year in which the rebate is being claimed.
(g) (1) Notwithstanding the provisions of subdivisions (3) and (4) of subsection (c) of this section, the commissioner may not approve an application in whole or in part if the full amount of rebates that such applicant may be paid pursuant to subsection (e) or (f) of this section would result in the aggregate amount of rebates issued to all approved qualified businesses under this section exceeding forty million dollars in any fiscal year.
(2) Notwithstanding the provisions of subdivision (4) of subsection (c) of this section, the commissioner may not approve an application in whole or in part if the full amount of rebates that such applicant may be paid pursuant to subsection (f) of this section would result in the aggregate amount of rebates issued pursuant to subsection (f) of this section exceeding ten million dollars in any fiscal year.
(h) (1) A rebate under this section may be granted to an approved qualified business for not more than seven successive calendar years. A rebate shall not be granted until at least twenty-four months after the commissioner's approval of a qualified business' application.
(2) An approved qualified business that has fewer than twenty-five new FTEs created in each of two consecutive calendar years or, if such business is approved by the commissioner pursuant to subdivision (4) of subsection (c) of this section, fewer than twenty-five new discretionary FTEs in each of two consecutive calendar years shall forfeit all remaining rebate allocations, unless the commissioner recognizes mitigating circumstances of a regional or national nature, including, but not limited to, a recession.
(i) Not later than January thirty-first of each year during the rebate period, each approved qualified business shall provide information to the commissioner regarding the number of new FTEs or new discretionary FTEs created or maintained during the prior calendar year and the qualified wages of such new employees. Any information provided under this subsection shall be subject to audit by the Department of Economic and Community Development.
(j) Not later than March fifteenth of each year during the rebate period, the Department of Economic and Community Development shall issue the approved qualified business a rebate voucher that sets forth the amount of the rebate, as calculated pursuant to subsections (e) and (f) of this section, and the taxable year against which such rebate may be claimed. The approved qualified business shall claim such rebate as a credit against the taxes due under chapter 208 or 228z or as an offset of the tax imposed under chapter 207. The commissioner shall annually provide to the Commissioner of Revenue Services a report detailing all rebate vouchers that have been issued under this section.
(k) Beginning on January 1, 2023, and annually thereafter, the commissioner, in consultation with the office of the State Comptroller and the Auditors of Public Accounts, shall submit a report to the Office of Policy and Management on the expenses of the JobsCT tax rebate program and the number of FTEs and discretionary FTEs created and maintained.
(P.A. 22-118, S. 420.)
History: P.A. 22-118 effective July 1, 2022, and applicable to taxable years commencing on or after January 1, 2023.