Urban and Industrial Sites Reinvestment (URA) Tax Credit Program: Primary incentive tool used by the State to attract new business investment and job creation to economically distressed areas. Companies that invest at least $5 million in facilities located in eligible areas may be entitled to a nonrefundable corporate income tax credit under this discretionary program. Tax credits are disbursed over a 10-year period. Unused credits may be carried forward or transferred/sold to other Connecticut taxpayers.
Research and Development Tax Credit: Equal to 20% of R&D expenditures in Connecticut in the current income year exceeding R&D expenditures of the prior taxable year. Unsold credits can be carried forward up to 15 years, and for companies with less than $70 million in gross income credits are partially refundable.
Sales and Use Tax Exemption: The State has the discretionary authority to provide an exemption from state sales tax on the purchase of construction materials and furniture, fixtures and equipment for businesses that make capital investments and create jobs. Equipment, tools, machinery, supplies, materials, and fuel used in renewable energy and clean energy technology industries are also exempt from state sales and use tax.
Real and Personal Property Tax: Municipalities have the discretion to provide a negotiated exemption from real and personal property tax for up to 30 years. State statutes also provide for exemption of tax on certain newly acquired and installed machinery, inventories, unbundled software, commercial motor vehicles; dependent on certain conditions.
Enterprise Zone: Businesses that locate inside an Enterprise Zone, or within a community which contains a zone, may be eligible for an abatement on real and business personal property taxes of up to 80% for 5 years and a 10-year, 25% tax credit on the portion of the Connecticut corporation business tax that is directly attributable to the company relocation, expansion or renovation project. The credit may increase to 50% based on number of new jobs created.
Grants: DECD offers discretionary grants to support economic development projects that result in new capital investment and job creation. Grants may also be available for job training and alternative energy installations.
Low-Interest and Forgivable Loans: The State has the discretionary authority to provide low-interest loans to business making significant capital improvements and retaining and creating new jobs. The State, through the Department of Economic and Community Development (DECD), at its discretion may forgive a portion of the loan principal (convert to a grant) if certain minimum employment and investment thresholds are met.
Updated June 2019