Electronic Data Processing Equipment Property Tax Credit
A credit equal to 100% of the personal property tax owed and paid on electronic data processing (EDP) equipment during any income year may be applied against certain Connecticut business taxes.
Electronic data processing equipment is defined as computers, printers, peripheral computer equipment, bundled software, and any computer-based equipment acting as a computer, as defined under Section 168 of the Internal Revenue Code of 1986, and any other equipment reported as a Code 20 on the Personal Property Declaration as prescribed by the Secretary of the Office of Policy and Management according to Conn. Gen. Stat. §12-27.
If the EDP equipment is leased, the lessee will be entitled to claim this credit if the lease by its terms or operation imposes on the lessee the cost of thepersonal property taxes on such equipment. However, the lessor and lessee may elect in writing that the lessor may claim the credit. The lessor will provide a copy of the written election upon the request of the Commissioner of the Department of Revenue Services (DRS).
The amount allowed as a credit is 100% of the Connecticut personal property tax owed and paid in any income year on EDP equipment. No credit will be allowed for any interest or penalty paid.
Rules Relating to Ordering
The credit is applied first against the corporation business tax after all other tax credits have been applied, and then may be applied against any of the following taxes:
Insurance companies, hospital and medical services corporations taxes (Chapter 207);
Health care centers tax (Chapter 207);
Unrelated business income tax (Chapter 208a);
Air carriers tax (Chapter 209);
Railroad companies tax (Chapter 210);
Community antenna television system companies tax (Chapter 211); or
Utility companies tax (Chapter 212).
Combined Return Filers
If a taxpayer is filing Form CT-1120CR, Combined Corporation Business Tax Return, this credit will be allowed on a combined basis so that the EDP equipment property tax credits of each company will be combined and allowed against the combined tax liability of the members included in the combined return.
Credits of taxpayers which are only subject to the corporation business tax must be used prior to credits of companies included in the combined return which are also subject to tax under Chapter 207, the health care centers tax under Chapter 207, Chapters 208a, 209, 210, 211, or 212, of the Connecticut General Statutes.
If the amount of credit allowable in any income year exceeds the Connecticut corporation business tax and any taxes imposed by Chapter 207, 208a, 209, 210, 211, or 212 (after all other credits allowable against the taxes have first been applied), then any unused credit balance may be carried forward to any of the five succeeding income years. No carryback is allowed.
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07