25% Manufacturing Facility Credit
A Targeted Investment Community is any municipality in Connecticut that contains an Enterprise Zone designated under Conn. Gen. Stat. §32-70.
A credit is available equal to 25% of the Connecticut corporation business tax allocable to a manufacturing facility located within:
ATargeted Investment Community; or
An Enterprise Zone (or other area having Enterprise
Zone level benefits).
If the manufacturing facility meets the employment criteria (see Employment Criteria, Page 65), it may be eligible for the 50% credit.
The 25% Manufacturing Facility Credit is certified by the Department of Economic and Community Development (DECD). To qualify for this credit the corporation must contact DECD at 860-270-8143 for application procedures.
A manufacturing facility is any plant, building, or other real property improvement that is constructed, renovated, expanded, or acquired and is used for one of the following purposes:
Manufacturing, processing, or assembling of raw materials, parts, or manufactured products;
Research and development facilities directly related to manufacturing;
The significant servicing, overhauling, or building of machinery and equipment for industrial use;
The warehousing and distribution in bulk of manufactured products on other than a retail basis (new construction only); or
Certain service sectors located in an Enterprise Zone, as defined by the Commissioner of DECD in Conn.Agencies Regs. §32-9p-5.
For a complete definition of a manufacturing facility, see Conn. Gen. Stat. §32-9p(d).
The credit amount applied against the Connecticut corporation business tax is 25% of the tax allocable to a manufacturing facility that has been certified by DECD.
No carryforward or carryback is allowed. How to Apply
A taxpayer may call DECD at 860-270-8143 and request the Urban Jobs/Enterprise Zone Program questionnaire. Upon review of the completed questionnaire, a DECD staff representative will contact the taxpayer to explain the program and the formal application process.
If the formal application is approved, DECD will issue to the taxpayer Forms UT-4, Eligibility Certificate for Enterprise Zone Benefits, and UT-9, Claim for Corporate Business Tax Credit Under the Provisions of the Enterprise Zone Program.
How to Compute the Credit
The tax credit is computed by using the arithmetical mean of two fractions (property and wages) to determine the portion of the corporation business tax liability allocable to the Connecticut manufacturing facility. This portion is then multiplied by 25%.
Property (numerator calculation)
Determine the average monthly net book value of the Connecticut manufacturing facility and machinery and equipment acquired for and installed therein (without reduction for any encumbrance). If the facility is rented, the facility portion of the numerator is calculated by multiplying the annual gross rents payable for the manufacturing facility times eight.
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07