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Regulations of Connecticut State Agencies (Last Updated: June 14,2023) |
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Title12 Taxation |
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SubTitle12-217s-1_12-217s-10. The Traffic Reduction Tax Credit Program |
| Sec. 12-217s-1. Definitions |
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Latest version.
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As used in sections 12-217s-1 to 12-217s-10, inclusive: (1) "Affected employer" means an affected employer, as defined in section 13b-38o of the Connecticut General Statutes; (2) "Approved direct cost" means a direct cost which is claimed on the tax credit application and is determined by the department to support a qualified corporation's traffic reduction program; (3) "Certified credit" is the amount that a corporation may claim on its annual return, as certified by the department; (4) "Corporation" means any company which is required to pay a tax for the privilege of carrying on or doing business within the State in a corporate capacity pursuant to Chapter 208 of the Connecticut General Statutes; (5) "Credit year" means a year in which the department reviews tax credit applications and determines the amount of tax credits which will be received by each corporation that submitted a tax credit application; (6) "Department" means the Connecticut Department of Transportation; (7) "Commissioner" means the Commissioner of Transportation; (8) "DRS" means the Connecticut Department of Revenue Services; (9) "Eligible Credit" means the amount of credit calculated for each corporation by the department after adjustment for the statutory limit; (10) "Income year" means the corporation's fiscal year in which the corporation incurred direct costs for traffic reduction programs and services related thereto; (11) "Maximum eligible credit" means the amount of credit calculated for each corporation by the department prior to adjustment for the statutory limit; (12) "Participating employee" means an affected employee who utilizes a commute option at least 1 day per week, as certified by the qualified corporation employer; (13) "Plan" means any plan submitted by an affected employer pursuant to section 13b-38p of the Connecticut General Statutes. (14) "Statutory Limit" means the total amount of credits available under section 12-217 of the Connecticut General Statutes to all qualified corporations in a single credit year; and (15) "Work Location" means a site, building, group of buildings or set of contiguous buildings or portion thereof, under ownership, operation or control of an affected employer where employees perform work. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-2. Qualification for the credit |
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Only qualified corporations are eligible for the Traffic Reduction Tax Credit. A qualified corporation is a corporation that: (1) Is an affected employer; (2) Participates in the traffic reduction program pursuant to sections 13b-38o through 13b-38x, inclusive, of the Connecticut General Statutes; (3) Has incurred, on or after January 1, 1995, direct costs to implement a traffic reduction program at each work location; and (4) Has a plan that has been approved by the department. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-3. Limitations |
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The amount of the credit in a single credit year a qualified corporation may claim expenses for the operation of the traffic reduction program shall be limited to whichever of the following amounts is the least: (1) Fifty percent of the approved direct costs incurred by the corporation during the credit year; (2) $250 per participating employee; (3) The amount certified by the department after adjusting for the statutory limit; or (4) The amount of tax imposed upon such corporation under Chapter 208 of the Connecticut General Statutes. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-4. Traffic reduction plans |
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A plan submitted to and approved by the department and in effect on November 14, 1996 shall be deemed to be a traffic reduction plan. A qualified corporation's traffic reduction plan shall be deemed to have remained in effect during the period November 15, 1996 to the final adoption of these regulations provided the qualified corporation submits an annual update pursuant to section 38b-138p of the Connecticut General Statutes within 180 days of the adoption of these regulations. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-5. Approval of plans and annual updates |
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(a) Upon receipt of a traffic reduction plan, annual update, or their revisions, the department shall evaluate the plan or annual update. (b) The department shall notify the affected employer by mail that the plan or annual update is approved, approved with conditions, or disapproved. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-6. Direct costs |
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(a) A direct cost is a cost that: (1) Directly supports a traffic reduction program and was incurred primarily for the purpose of encouraging or supporting the use of a trip reduction measure; (2) Can be audited using generally accepted accounting procedures; and (3) Is customary and reasonable in amount for the service or the product. (b) Direct costs include, but are not limited to: (1) On-going or occasional cash or in-kind gifts or benefits of greater than nominal financial value provided to affected employees in exchange for their utilization or consideration of trip reduction measures; (2) Capital and operating costs to provide or upgrade facilities, vehicles, vehicle services, and equipment, the primary purpose of which is to promote or support the use of trip reduction measures; (3) Salary and benefit costs for employees and any contract staff to conduct traffic reduction program activities or administer the programs, and costs for office expenses and equipment directly related to the traffic reduction programs. Annual costs for staff who work part-time shall be prorated by the annual hours the employee devotes to traffic reduction program activities relative to the total hours worked; or (4) Costs to prepare and distribute traffic reduction program information and costs to sponsor promotional activities and events. (c) The direct cost for a service provided internally by corporate staff rather than by an outside vendor shall be the lesser of: (1) The documented time and materials costs to provide the service; or (2) The reasonable cost of an equivalent service if procured from an outside vendor. (d) Costs excluded from direct costs include but are not limited to: (1) Benefits provided to employees not defined as participating employees; (2) Capital costs in excess of tax depreciation schedules; or (3) Salary costs and benefit costs such as overhead and indirect costs not directly attributable to the traffic reduction program, and costs related to the preparation and submission of plans. (e) The total direct costs claimed by a corporation for purposes of the tax credit shall be the sum of direct costs less any revenue or reimbursement received by the corporation as a direct result of the voluntary traffic reduction program, including any gain from the sale of any capital equipment for which a credit was previously claimed. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-7. Application for tax credit |
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(a) A qualified corporation shall apply for the tax credit on the department's form. No qualified corporation may claim the credit on its corporation business tax return unless it has received written notification from the department approving the amount of the affected employer's certified credit pursuant to section 12-217s-9 of the Regulations of Connecticut State Agencies. Applications shall be made in accordance with this section: (b) Qualified corporations shall submit a completed application form to the department by 4:00 p.m. on July 1st (if July 1st is a Saturday, Sunday or holiday, by 4:00 p.m. on the first business day following July 1st). (c) Application forms shall include the following information: (1) The corporation's name, address, Connecticut tax registration number and Federal employer identification number; (2) All direct costs incurred for each income year on or after January 1, 1995 contained in the application; (3) The number of participating employees; (4) All information requested by the Commissioner on the application form; (5) Signature of a duly authorized officer of the corporation and evidence of the signatory's authority made under penalty of false statement as provided in sections 53a-157b of the Connecticut General Statutes; and (6) The income year for which the application for credits is being filed. (d) Each corporation participating in a plan with one or more other corporations shall submit individual tax credit applications. Corporations shall assign proportionate shares of direct costs jointly incurred by such corporations. Failure to properly assign shares may result in the rejection of all applications associated with the plan. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-8. Department determination of eligible credit | ||||||||
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(a) Each corporation’s eligible credit shall be determined by the department on or before November 1st of each year, by the following procedure. (1) The department shall compare the direct costs on the application form and the reduction measures in the approved plan or annual update (for each work location, if more than one) to determine if the direct costs on the application support the traffic reduction measures, and are reasonable for the level of effort described in the plan or annual update. If the department determines that the costs support the traffic reduction measures and are reasonable for the level of effort described in the plan, the department will approve the direct costs on the application. (b) The department shall then calculate the qualified corporation’s maximum eligible credit for each year on the application as the lesser of the following two amounts: (1) The number of participating employees multiplied by $250; or (2) Fifty percent of the total approved direct costs. (c) The department shall total the maximum eligible credits for all qualified corporations submitting applications for each credit year. If the total maximum eligible credits for all qualified corporations for a single credit year are less than or equal to the statutory limit, the eligible credit for any corporation shall be the amount of maximum eligible credit set for that corporation by the department. If the total maximum eligible credits for all qualified corporations for a single credit year are more than the statutory limit, the department will determine the amount of eligible credit to be a prorated percentage of the maximum eligible credit by the following formula:
where:
Example: A qualified corporation’s approved direct cost to implement its traffic reduction program is determined to be $20,000. That corporation has 45 participating employees. That corporation’s "maximum eligible credit" (MEC) is the lesser of 50% of the corporation’s approved direct cost ($20,000 x 50% = $10,000) or $250 per participating employee ($250 x 45 = $11,250). Therefore, that corporation’s maximum eligible credit is $10,000. Continuing this example, the total maximum eligible credits for all qualified corporations (TMEC) is $2,000,000. The statutory limit (SL) is $1,500,000. Based upon the above, the corporation’s Eligible Credit (EC) would be calculated to be $7500 which equals ($10,000 [MEC] x ($1,500,000 [SL] / $2,000,000) [TMEC]). |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-9. Certification of eligible credit |
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The department will issue to each qualified corporation that has claimed a credit, written notification designating the amount that may be claimed on the corporation's corporate business tax return. For income years commencing prior to January 1, 1998, the department will instruct the corporation regarding which income year the corporation shall take the credit against its tax. For income years commencing on or after January 1, 1998, the corporation shall take the credit against its tax for the income year in which it incurred the expenditures. |
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(Adopted effective April 1, 1999) |
| Sec. 12-217s-10. Document production and record keeping |
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Latest version.
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Copies of all records and documents generated by or on behalf of the corporation pursuant to sections 12-217s-1 through 12-217s-10, inclusive, of the Regulations of Connecticut State Agencies, shall be retained so long as the contents thereof may become material in the administration of the tax imposed under Chapter 208 of the Connecticut General Statutes. |
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(Adopted effective April 1, 1999) |