Service Facility Credit
A credit may be applied against the portion of the Connecticut corporation business tax that is allocable to a service facility located outside of an Enterprise Zone in a Targeted Investment Community. The amount of the credit depends upon the number of new employees working at the facility.
The credit is certified by the Department of Economic and Community Development (DECD). To qualify, the taxpayer must contact DECD at 860-270-8143 for application procedures.
A service facility located in an Enterprise Zone cannot qualify for this credit, however, it may qualify for the 50% or 25% Manufacturing Facility Credit (see Pages 65 and 69).
A service facility is defined as any plant, building, or other real property improvement that is constructed, renovated, expanded, or acquired, and that is used for the following services as further defined by the Commissioner of DECD:
Depository institutions or nondepository credit institutions;
Finance and insurance;
Holding or other investment offices;
Health care and social assistance;
Fishing, hunting, and trapping;
Transportation and warehousing;
Air, water, and other transportation services;
Security and commodity brokers, dealers, exchanges, and services;
Professional, scientific, and technical services;
Administrative and support services assistance;
Telemarketing, engineering, accounting, research, management, and related services; or
Supplying goods or services in the field of computer hardware or software, computer networking, telecommunications, or communications.
For a detailed list of the qualifying service sectors, see Conn. Agencies Regs. §32-9p-5.
An Enterprise Zone is any area designated by the Commissioner of DECD as an Enterprise Zone. See Page 65 for a more detailed description.
A Targeted Investment Community is defined as a municipality that contains an Enterprise Zone.
A new employee is defined as a person hired by the taxpayer to fill a position for a new job or a person shifted from an existing location of the taxpayer outside Connecticut to a service facility located in Connecticut, provided the total number of new employees allowed for purposes of this credit will not exceed the total increase in the taxpayer's employment in Connecticut. The increase in the taxpayer's employment will be the difference between the number of employees employed in Connecticut at the time of application for this credit and the highest number of employees employed by the taxpayer in Connecticut in the year preceding the taxpayer's application for this credit. To be considered a new employee, the person's duties in connection with the operation of the facility must be on a regular, full-time, and permanent basis.
A new job is defined as a job that did not exist in the business of a taxpayer in Connecticut prior to the taxpayer's application for this credit and that is filled by a new employee. A new job does not include a job created when an employee is shifted from an existing location within Connecticut.
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07