Connecticut Administrative Code › Title 12 - Taxation › 214 - Corporation Business Tax › Section 12-214-2 - Companies exempt from tax

Current through July 10, 2024
(a)
In
			 general.
Any corporation carrying on, or having the right to carry on,
			 business in this state is subject to the tax imposed under chapter 208 (the
			 corporation business tax). Section
			 12-214
			 exempts certain companies from the tax imposed under chapter 208. Subsection
			 (b) of this section defines, to the extent not otherwise defined in section
			 12-213,
			 terms used in this section and section
			 12-214.
			 Subsection (b) of this section also describes the companies which are exempt
			 from the tax imposed under chapter 208.
(b)
Definitions.
As used in this
			 section and in section
			 12-214,
			 the following terms have the meaning ascribed to them in this subsection. The
			 meaning which such terms have ascribed to them elsewhere is not pertinent to
			 their use in this section and section
			 12-214.
(1) "Insurance company incorporated or
			 organized under the laws of any other state or foreign government" means an
			 insurance company (as defined in section
			 12-201 )
			 other than a domestic insurance company (as defined in section
			 12-201 ).
			 Domestic insurance companies are subject to the taxes imposed under chapters
			 207 and 208. Insurance companies incorporated or organized under the laws of
			 any other state or foreign government are subject to the taxes imposed under
			 chapter 207 (sections
			 12-210
			 and
			 12-211
			 ).
(2) "Company exempt by the
			 federal corporation net income tax law" means:
(A) a farmers' cooperative marketing and
			 purchasing association which is exempt from federal income taxes under section
			 521 (a) of the Internal Revenue Code and which has been determined by the
			 Internal Revenue Service to be an association described in section 521 (b) (1)
			 of the Internal Revenue Code and section 1.521-1 of title 26 of the Code of
			 Federal Regulations. The association shall be exempt from the tax imposed under
			 chapter 208 for each income year to which such determination applies. If the
			 Internal Revenue Service subsequently determines that the association has
			 ceased to be exempt from federal income taxes under section 521 (a), the
			 association shall immediately give written notice of such subsequent
			 determination to the commissioner and shall be subject to the tax imposed under
			 chapter 208 for each income year to which such subsequent determination
			 applies. For each income year for which exemption from the tax imposed under
			 chapter 208 is claimed, the association shall file with the commissioner a copy
			 of its Form 990-C within the time, including extensions, allowed for filing an
			 income tax return with the Internal Revenue Service for the year to which the
			 Form 990-C pertains. The fact that the association is or may be, under the
			 provisions of section 1381 (b) of the Internal Revenue Code, subject to the
			 taxes imposed by section 11 or 1201 of the Internal Revenue Code shall not
			 affect its exemption from the tax imposed under chapter 208.
(B) a homeowners association (whether a
			 condominium management association or a residential real estate management
			 association) which is exempt from federal income taxes under section 528 (a) of
			 the Internal Revenue Code, which is described in section 528 (c) (1) of the
			 Internal Revenue Code and section 1.528-1 of title 26 of the Code of Federal
			 Regulations, and which has elected to be treated as a homeowners association
			 under the provisions of section 1.528-8 of title 26 of the Code of Federal
			 Regulations. For each income year for which such an election is not made, the
			 association shall be subject to the tax imposed under chapter 208. For each
			 income year for which exemption from the tax imposed under chapter 208 is
			 claimed, the association shall file with the commissioner a copy of its Form
			 1120H within the time, including extensions, allowed for filing an income tax
			 return with the Internal Revenue Service for the year to which the Form 1120H
			 pertains. The fact that the association is or may be subject to the tax imposed
			 by section 528 (b) of the Internal Revenue Code shall not affect its exemption
			 from the tax imposed under chapter 208.
(C) a domestic international sales
			 corporation which is exempt from federal income taxes under section 991 of the
			 Internal Revenue Code, which is described in section 992 (a) (1) of the
			 Internal Revenue Code, and which has elected to be treated as a domestic
			 international sales corporation under the provisions of section 992 (b) (1) of
			 the Internal Revenue Code. For each income year for which the company is not
			 treated as a domestic international sales corporation (either because of its
			 failure to satisfy the conditions of section 992 (a) (1) of the Internal
			 Revenue Code or because of its revocation of the election), the company shall
			 immediately give written notice of such treatment to the commissioner and shall
			 be subject to the tax imposed under chapter 208. For each income year for which
			 exemption from the tax imposed under chapter 208 is claimed, the company shall
			 file with the commissioner a copy of its Form 1120-DISC within the time,
			 including extensions, allowed for filing an income tax return with the Internal
			 Revenue Service for the year to which the Form 1120-DISC pertains. The fact
			 that the company is or may be subject to the tax imposed by section 1491 of the
			 Internal Revenue Code shall not affect its exemption from the tax imposed under
			 chapter 208.
(D) a company (other
			 than a company which is described in any of the preceding paragraphs of this
			 subdivision or in any of the subdivisions of this subsection) which is exempt
			 from federal income taxes under section 501 (a) or any other section of the
			 Internal Revenue Code and which has been determined by the Internal Revenue
			 Service, in a determination referring to the company, to be a company which is
			 exempt from federal income taxes. The company shall be exempt from the tax
			 imposed under chapter 208 for each income year to which such determination
			 applies. If the Internal Revenue Service subsequently determines that the
			 company has ceased to be exempt from federal income taxes, the company shall
			 immediately give written notice of such subsequent determination to the
			 commissioner and shall be subject to the tax imposed under chapter 208 for each
			 income year to which such subsequent determination applies. The fact that the
			 company is or may be subject to the tax imposed by section 507 (c), 511 (a) (1)
			 or 527 (f) (1) of the Internal Revenue Code shall not affect its exemption from
			 the tax imposed under chapter 208.
(3) "Company subject to gross earnings taxes
			 under chapter 210" means a company which is described in section
			 12-249. For
			 each income year for which exemption from the tax imposed under chapter 208 is
			 claimed, the company shall file with the commissioner the annual return which
			 is required by section
			 12-222,
			 by the due date of such return or, if applicable, its extended due
			 date.
(4) "Company all of the
			 properties of which in this state are operated by a company subject to such
			 gross earnings taxes" means a company, all of the properties of which in this
			 state are operated for railroad purposes by another company which is subject to
			 gross earnings taxes under chapter 210. If all such properties (or any portion
			 thereof) in this state are not operated by such other company for railroad
			 purposes, then the company which owns such property shall be subject to the tax
			 imposed under chapter 208. For each income year for which exemption from the
			 tax imposed under chapter 208 is claimed, the company shall file with the
			 commissioner the annual return which is required by section
			 12-222,
			 by the due date of such return or, if applicable, its extended due
			 date.
(5) "Nonprofit cooperative
			 ownership housing stock and nonstock corporation, when residence in such
			 housing is restricted to members of the corporation and ownership in such
			 corporation is restricted to occupants of such housing" means a company which
			 is described in section 1715e (a) (1) of title 12 of the United States Code,
			 which is eleemosynary, and which owns or leases houses or apartment buildings
			 and restricts occupancy of such houses or apartments in such apartment
			 buildings to members, in the case of a nonstock corporation, or to
			 shareholders, in the case of a stock corporation. As used in the preceding
			 sentence, "occupancy" means occupancy for dwelling purposes. For each income
			 year for which exemption from the tax imposed under chapter 208 is claimed, the
			 company shall file with the commissioner the annual return which is required by
			 section
			 12-222,
			 by the due date of such return or, if applicable, its extended due
			 date.
(6) "Cooperative housing
			 corporation which has no taxable income" means a company which is described in
			 section 216 (b) (1) of the Internal Revenue Code and section 1.216-1 (d) of
			 title 26 of the Code of Federal Regulations and which has no taxable income as
			 described in section 63 (a) of the Internal Revenue Code. For each income year
			 for which exemption from the tax imposed under chapter 208 is claimed, the
			 company shall file with the commissioner the annual return which is required by
			 section
			 12-222,
			 by the due date of such return or, if applicable, its extended due
			 date.
(7) "Organization or
			 association of two or more persons established and operated for the exclusive
			 purpose of promoting the success or defeat of any candidate for public office,
			 of any political party, or of any question or constitutional amendment to be
			 voted upon at any state or national election" means an organization which is
			 exempt from federal income taxes under section 527 (a) of the Internal Revenue
			 Code and which is described in section 527 (e) (1) of the Internal Revenue Code
			 and section 1.527-2 (a) of title 26 of the Code of Federal Regulations. For
			 each income year for which exemption from the tax imposed under chapter 208 is
			 claimed, the organization shall file with the commissioner a copy of its Form
			 1120-POL within the time, including extensions, allowed for filing an income
			 tax return with the Internal Revenue Service for the year to which the Form
			 1120-POL pertains. The fact that the organization is or may be, under the
			 provisions of section 527 (b) of the Internal Revenue Code, subject to the
			 taxes imposed by section 11 or 1201 of the Internal Revenue Code shall not
			 affect its exemption from the tax imposed under chapter 208.
(8) "Individually owned company which had
			 gross annual revenues not in excess of one hundred million dollars in the most
			 recently completed year; which engaged in the research, design, manufacture,
			 sale or installation of alternative energy systems; and the net income of which
			 is directly attributable to engaging in the research, design, manufacture, sale
			 or installation of alternative energy systems; and the net income of which is
			 directly attributable to engaging in the research, design, manufacture, sale or
			 installation of alternative energy systems" means a company, the gross receipts
			 or sales of which in its income year next preceding the income year for which
			 exemption from the tax imposed under chapter 208 is claimed (as reported on the
			 Form 1120 or Form 1120S which it filed for such preceding year) were not in
			 excess of one hundred million dollars; the net income of which for the income
			 year for which exemption from the tax imposed under chapter 208 is claimed is
			 directly attributable to the research, design, manufacture, sale or
			 installation of alternative energy systems (as defined in section
			 12-213 )
			 or parts and components thereof; and which has only one shareholder, and such
			 shareholder is an individual. Notwithstanding the provisions of the preceding
			 sentence, the company may have two shareholders, if the two are married to each
			 other. For each income year for which exemption from the tax imposed under
			 chapter 208 is claimed, the company shall file with the commissioner the annual
			 return wich is required by section
			 12-222,
			 by the due date of such return or, if applicable, its extended due
			 date.