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CT Taxes & Business Incentives

Connecticut offers a very competitive set of tax incentives and financing options to assist business. Connecticut's menu of options is by no means simple, but there are many programs that will help maximize your tax savings. Most importantly Connecticut is willing to work with any company bringing new jobs and investment to the state to create a tax incentive plan that works for them. In addition to statutory tax incentives the Governor and Department of Economic & Community Development have the ability to give non-statutory incentives to assist companies.

Listed below are taxes that apply to Connecticut businesses and the incentives that can be applied against each of these taxes based on business type.  Most credits require state notification and qualification. For more information visit www.ct.gov/drs

Use the links below to view individual data charts:
Corporate Income Tax Rates:
Corporate Income Tax Rates:  
California 8.84%
Massachussets 9.50%
New Jersey 9.00%
New York 7.50%
*For companies with more than $100 million in annual income a 10% tax surcharge will
be applied for profits in calendar years 2009, 2010 and 2011.
Corporate Income Tax Credits:
Name Qualifications Credit Notes
New Jobs Creation Tax Credit Create 10 or more new jobs 60% of the employee's witheld CT income tax for up to 5 years.  
Displaced Worker Tax Credit Hire an employee let go because of restructuring (at least 10 employees let go from same place of employment.) $1500 per employee  
Electronic Data Processing Equipment Property Tax Credit Computers, printers, peripheral computer equipment, bundled software, and any computer-based equipment acting as a computer. Credit equal to 100% of the personal property tax owed and paid. This tax credit can be used only after all other allowable tax credits have been applied. If the credit exceeds taxes it can be carried forward.
Fixed Capital Investment Tax Credit New tangible personal property with a class life of more than 4 years. Does not include inventory, land, buildings or mobile transportation property. 5% of the amount paid. May be carried forward for 5 years; expenditure cannot be used for any other tax credit.
Housing Program Contribution Tax Credit Cash contributions to qualified housing programs that benefit low and moderate income families. Credit is equal to 100% of the contribution. $10 million max credit per year. May be carried forward or back for 5 years.
Human Capital Investment Tax Credit In-state job training and work education programs for CT employees. 5% of the costs and expenses. May be carried forward for 5 years.
Service Facility Tax Credit Any building constructed or renovated for financial services, business services, health care, transportation & warehousing, telemarketing, engineering and computer networking. Based on new jobs created: 300-599 15%, 600-899 20%, 900-1,199 25%, 1,200-1,499 30%, 1500-1,999 40%, 2,000 or more 50% Does not apply for facilities in an enterprise zone.
Enterprise Zone Tax Credit for Qualifying Corporations Company located in an enterprise zone with 375 or more employees with 40% residents of the ez or fewer than 375 employees with at least 150 ez residents. 100% of the corporation business tax liability in years 1 through 3; 50% of the corporation business tax liability in years 4 - 10.  
Urban & Industrial Site Reinvestment Tax Credit Direct investment of at least $5 million in an approved urban or industrial site. 0% years 1 - 3, 10% credit years 4 - 7, 20% credit years 8 - 10.  
Credits for Research & Development:
Research & Development (Nonincremental) Expenditures Tax Credit Research & Development expenses incurred in Connecticut 6% for companies with less than $100 million income. For other companies the credit is determined by the amount of R&D expense: $50 million = 1%; $50-$100 million = $500,000 + 2% above $50 million; $100-$200 million = $1,500,000 + 4% over $100 million; $200 million or more = $5,500,000 + 6% over $200 million. Credit can be reduced if there are layoffs; credit can be carried forward; companies with less than $70 million in income can exchange credits for a credit refund equal to 65% of the credit value.
Research & Experimental (Incremental) Expenditures Tax Credit Costs incurred in Connecticut for research. 20% of the incremental increase in expenditures year over year. Can be carried forward for 15 years; companies with less than $70 million in income can exchange credits for a credit refund equal to 65% of the credit value.
Credits for Financial Services Companies:
Financial Institutions Tax Credit Build & occupy a 900,000 sq. ft. facility and maintain an avg. of 1,200 - 2,000 employees 30 - 50% for 10 years based on employment. Can be extended for 5 more years at 25% if there are more than 3,000 employees at the end of 10 years.
Credits for Media & Film Production:
Film Production Infrastructure Tax Credit Investment over $15,000 in facility for digital and media functions. 10-20% of the value of the project. % based on size of investment; leased propertys eligibility; design fees and transaction costs are inclusive; credit can be sold and carried forward.
Film Production Tax Credit Film and media production costs and expenses incurred in Connecticut (excess of $50,000.) 30% of the value of all costs and expenses. Credit may be sold or carried forward.
Digital Animation Tax Credit Digital animation production company operating in the state with at least 200 full-time employees. With expenses and costs in excess of $50,000 for the given tax year. 30% of production costs and expenses Cannot be used with the film production tax credit. May be sold or carried forward for up to 3 years.
Credits for Manufacturers:
Apprenticeship Training Tax Credit Qualified apprentice program in manufacturing or plastics (machinist, tool & diemaker, etc.) Up to $4800 per year Examples of trades include Machinist, Toolmaker, Tool and Diemaker, Tool and Machine Setter, Machine Tool Repairer.
Machinery & Equipment Expenditure Tax Credit Year over year expenses for new equipment for companies with less than 800 full-time employees. 5% of the incremental increase in expenditures for machinery & equipment. 10% credit for companies with fewer than 250 full-time employees.
50% Manufacturing Facility Enterprise Zone Tax Credit Locate in an enterprise zone, have 150 employees who are residents of the ez or 30% of the total workforce ez residents. 50% of tax allocable or 30% if employment criteria is not met. Targeted Investment Communities apply as well.
25% Manufacturing Facility Enterprise Zone Tax Credit New or expanded manufacturing facility in an enterprise zone or targeted investment community. 25% of tax allocable. Cannot be used with the 50% Mfg. Facility Credit.
Sales Tax:
  • Connecticut's sales tax rate is 6% and is scheduled to drop to 5.5% in 2010. There are no additional local taxes added on.
  • Full and partial sales tax exemptions are available for manufacturers, fabricators and processors.
  • Full exemptions apply to products used directly in the manufacturing process. Details can be obtained in the 2009 Sales & Use Tax Guide.
Full Exemption: Partial Exemption:
Machinery Machinery
Materials Equipment
Tools Materials
Fuel Tools
Component & Enhancement Parts Fuel
Replacement & Repair Parts Component & Enhancement Parts
  Replacement & Repair Parts
Property Tax Rates:

In Connecticut property tax is paid to the town the facility is located in. Properties are taxed on 70% of the assessed value. Property tax rates are determined at the local level.

Towns Mill Rate
Ansonia 25.25 mills
Bridgeport 38.74 mills
Derby 26.40 mills
East Haven 22.85 mills
Easton 21.70 mills
Fairfield 18.90 mills
Hamden 29.41 mills
Milford 27.50 mills
New Haven 42.21 mills
North Branford 24.95 mills
North Haven 23.48 mills
Orange 28.30 mills
Shelton 18.61 mills
Stratford 30.36 mills
Trumbull 24.07 mills
West Haven - City 27.96 mills
West Haven - Center District 35.56 mills
West Haven - West Shore 35.91 mills
West Haven - Allingtown 35.21 mills
Woodbridge 31.09 mills
Financing Programs:
Loan Program Description Use of Proceeds Amount Term Maturity
Direct Loans To supplement the capital needs of borrowers. Working capital, machinery, equipment, purchase or expansion of facilities. $250,000 to $5 million Up to 20 years
Guaranteed Loans To help private-sector lenders meet client's financing requirements. Working capital, machinery, equipment, purchase or expansion of facilities, finance foreign trade. $250,000 to $5 million Up to 20 years
Participating Loans Subordinated direct loan participates with private-sector lending. Working capital, machinery, equipment, purchase or expansion of facilities. $250,000 to $5 million Up to 20 years
Line-of-Credit to Term Loans 1 year line of credit converting to a fully amortizing loan. Revenue-producing equipment, IT upgrades, building expansion. $250,000 to $1 million Up to 7 years
Urbank Loan guarantees for small businesses unable to obtain bank financing. Any business purpose including working capital, machinery & equipment, new or expanded facility. Up to $350,000 Up to 15 years
Early Stage Direct loans or financing for early-stage companies that have significant economic potential. Working capital, machinery, equipment, purchase or expansion of facilities. Up to $5 million Tailored to each transaction
Technology-Intensive Financing For early-stage or expanding technology-intensive businesses and projects. Working capital, software & hardware, machinery, equipment, purchase or expansion of facilities. Up to $5 million Up to 20 years
Technology-Intensive Incentives Tax Incremental Financing (TIF) based on cash incentives to construct facilities for technology intensive use. Construct technology intensive facilities in designated communities. Determined by project N/A
Industrial Revenue Bonds for Manufacturers Lower-cost, tax-exempt financing for manufacturers. Land, new machinery and equipment, purchase or expansion of facilities. Up to $10 million Up to 40 years or 120% of the economic life of the asset financed.
Enterprise Zones in Connecticut's Central Coast
Bridgeport, CT Enterprise Zone Ansonia/Derby, CT Enterprise Zone Hamden, CT Enterprise Zone New Haven, CT Enterprise Zone
Download Map:
Bridgeport, CT
Enterprise Zone
Download Map:
Ansonia/Derby, CT
Enterprise Zone
Download Map:
Hamden, CT
Enterprise Zone
Download Map:
New Haven, CT
Enterprise Zone

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