Bulletin #12
Taxpayers' Information Service - Revised 6/4/86
Neighborhood Assistance Tax Credits
Corporation Business Tax
Chapter 228a establishes a Neighborhood Assistance Tax Credit for business firms investing in qualified programs which assist neighborhoods. Any municipality desiring to obtain the benefits of the Neighborhood Assistance Tax Credit Program shall submit to the Commissioner of Revenue Services a list of programs eligible for investment by business firms, including programs providing neighborhood assistance, employment and training, community services, crime prevention, and energy conservation. A public hearing must be held and the list must be approved by the legislative body of the municipality.
The maximum tax credit allowed in any year to a business firm is $75,000. Any tax credit not used may be carried backward or forward for up to 5 years.
Tax credits will only be based on contributions of $250 or more. The tax credit will either be 50% or 60% of the business' contribution. The percentage determination is based upon the program's objectives and the population it serves.
A non-profit organization is limited to receiving $300,000 in contributions in the aggregate.
The following timetable must be followed by municipalities, business firms, and the Commissioner of Revenue Services:
Each municipality must submit a list of eligible neighborhood assistance programs to the Commissioner of Revenue Services on or before September 1.
The Commissioner of Revenue Services shall on or before October 1, publish a program list compiled from the lists submitted to him by municipalities.
Each business firm seeking the Neighborhood Assistance Tax Credit shall submit to the Commissioner of Revenue Services on or before December 1 its program proposal which is drawn from the program list published by the Commissioner of Revenue Services. However, funds are granted on a first come basis.
The Commissioner of Revenue Services shall refer each program proposal to the municipal agency overseeing the neighborhood assistance program's implementation.
Any municipal agency to which a program proposal is referred by the Commissioner of Revenue Services shall approve or disapprove such program proposal within 30 days of referral. Failure of a municipal agency to act shall be deemed approval of the program proposal.
The Commissioner of Revenue Services shall approve or disapprove of a program proposal which he has referred to a municipal agency within 60 days of submission by a business firm of its program proposal. Failure of the Commissioner to act shall be deemed disapproval by him of the program proposal.
A post-project audit must be conducted for any program that receives $25,000 or more in contributions. The report must be submitted to the municipality for verification. Upon verification, the report is then submitted to the Commissioner of Revenue Services.
The contribution must be made and the appropriate tax credit claimed for the business' tax year beginning on or after January 1 of the year of the Act.
The aggregate amount of tax credit allowed to all business firms under the Neighborhood Assistance Tax Credit Program in any year shall not exceed $3,000,000.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page or through the Department's fax retrieval system by calling the DRS TAX-FAX at 860-297-5698 from the handset attached to your fax machine. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.