Tax Incentives
Municipal Tax Abatement
Each municipality in the state has the ability to offer, on a sliding scale depending on level of investment, local tax abatements for both real estate and manufacturing machinery and equipment. The statutory authority for these abatements are in accordance with the Connecticut General Statutes Sec. 12-65b.
Sales & Use Tax Exemption
The State of Connecticut may provide relief from sales and use tax on the purchase of tangible personal property and services for qualifying economic development projects. A project must fall into one of the two following categories: a competitive situation involving retention or expansion within, or relocation to Connecticut; or a significant contribution to a targeted industry cluster. Investment in a property must equal $5 million or more. Tax relief cannot exceed $10,000 for each new, full-time equivalent, permanent job created or $2,000 for each full-time equivalent job retained. Applicants must demonstrate financial strength and/or have contributed substantially to the project investment.
Connecticut Job Expansion Tax Credit
Connecticut businesses can be eligible for tax credits of $500 per month for each new full‐time job created. If the new employee is receiving vocational rehabilitative services from the Bureau of Rehabilitative Services, receiving unemployment benefits, or is a veteran employee who, at the time of hiring by the taxpayer, is a member of, was honorably discharged from or released under honorable conditions from active service in the armed forces, then the tax credit is increased to $900 per month. The credit may be applied against a Corporation business tax or Income tax under chapters 208 and 229 of the general statutes. An application must be completed and submitted to before hiring new employees. There are three thresholds to qualify for the credits: businesses with fewer than 50 employees must hire at least one new full‐time employee; businesses with 50 to 100 employees must hire at least five new full‐time employees; and businesses with over 100 employees must hire at least 10 new full‐time employees.
Connecticut Green Buildings Tax Credit Program
A new corporate business tax credit program was created by Connecticut General Statute 12-217mm. This Program provides a tax incentive for building owners and developers for eligible construction, renovation, or rehabilitation projects for commercial properties that meet or exceed the U.S. Green Building Council’s Leadership in Environmental and Energy Design (LEED) Gold Standard. Administration of the Program is being shared jointly by the Connecticut Office of Policy and Management (OPM) and the Department of Energy and Environmental Protection (DEEP). A tax credit itself can only be claimed by corporations subject to the Corporate Business Tax (chapter 208 of the CT General Statutes).
Digital Media & Motion Picture Tax Credit
Eligible production companies can receive a tax credit on a sliding scale up to 30% on qualified digital media motion picture production, pre-production and post-production expenses incurred in the state. Production companies incurring production expenses or costs between $100,000 and $500,000 are eligible for a 10% credit, between $500,000 and $1 million are eligible for a 15% credit, and over $1 million continues to be eligible for a 30% credit. The tax credits may be applied against the corporation business tax as provided in Chapters 207 and 208 of the Connecticut General Statutes.
Digital Animation Production Company Tax Credit
State tax credits are available for digital animation production activity, which it defines as creating, developing, and producing computer-generated animation content for public distribution and exhibition. The digital animation credit percentage ranges from 10% to 30%, depending on the total Connecticut expenses or costs over $100,000. The credit is 10% for expenses between $100,000 and $500,000, 15% for expenses over $500,000 up to $1 million, and 30% for expenses over $1 million. It applies against the corporation and insurance premium taxes. To qualify for a credit, a company must be exclusively engaged in the production activity, maintain a studio in Connecticut, and employ at least 200 full-time employees.
Entertainment Infrastructure Tax Credit
State tax credits are available for investments in capital projects for basic buildings, facilities, or installations that the film, and digital media industry needs to function in Connecticut. The credits can be used against the corporation and insurance premium taxes. The credit is 20% of eligible expenses for projects costing at least $3 million.