Connecticut Incentives and Workforce Development Guide
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Manufacturers Assistance Act: Provides direct financial assistance in the form of low-interest loans under its Economic Development and Manufacturing Assistance Act (MAA). MAA also provides incentive driven direct loans for projects when there is a strong economic development potential. Funding may be used for purchase of equipment, furniture and fixtures, construction, leasehold improvements, training and other eligible project-related activities.
Small Business Express Program (EXP): An innovative business assistance program created in October 2011 that provides funding and technical assistance to Connecticut’s small businesses to spur job creation and economic growth. EXP provides access to capital through a revolving loan fund and incentive-driven loans and matching grants to create jobs. Connecticut-based businesses that are in good standing, have been in operation for at least 12 months, and employ no more than 100 are eligible for revolving loans of $10,000-$100,000; job creation loans of $10,000-$300,000; and matching grants of $10,000-$100,000.
First Five Program: One of Governor Malloy’s first initiatives in 2011, it provides substantial financial assistance for large-scale business projects to encourage business expansion, relocation and job creation. Eligible business development projects must create no less than 200 jobs within 24 months or invest no less than $25 million and create no less than 200 new jobs within five years.
Pre-seed Financing Program:
- Connecticut Innovations (CI) provides pre-seed financing to businesses for the development of proof of concepts and support services
- Financial assistance shall not exceed $150,000 per business
- An eligible business must be principally located in Connecticut with not less than 75% of its employees working in state
- An eligible business must also demonstrate private investment dollars not less than 50 cents for every dollar of financial assistance sought from the program.
Urban and Industrial Site Reinvestment Tax Credit: Dollar-for-dollar corporate tax credit of up to 100% for an investment up to a maximum of $100 million in an urban area or an industrial project; minimum investment is $5 million in distressed communities and $50 million in all other communities.
Film Production & Digital Media Tax Credit: A tax credit equal to 10% of qualified digital media and motion picture production, pre-production and post-production expenses in the state between $100,00 – $500,000, 15% of qualified expenses between $500,00 – $1M; and 30% of qualified expenses over $1M.
Research & Development Tax Credits: A tax credit equal to 20% of the R&D expenditures in Connecticut in the current income year exceeding R&D expenditures of the prior taxable year; unused R&D credits can be carried forward and, for companies with gross income of $70 million or less, can be sold to the state for 65% of their value; credit equal to 100% of property taxes owed and paid on electronic data processing hardware peripheral equipment and software; credit may be applied against certain other Connecticut taxes.
Corporate Business Tax Credits: Financial institutions constructing new facilities and adding new employees can receive a credit of as much as 50% of the tax for up to 10 years; may be extended for an additional five years; based on size of the facility and level of employment.
Corporate Business Tax Exemptions: Available for:
- All insurance companies, Connecticut incorporated and non-Connecticut incorporated
- Corporate income, insurance premium and sales and use taxes for certain banks, insurers and investment companies locating in the Hartford Financial Service Export Zone that conduct all business with non-U.S. persons
- Capital gains from the sale of protected open space or Class I or II water company land to the state or certain entities
- Non-U.S. corporations whose sole activities in CT are trading stocks, securities or commodities of their own account
Sales & Use Tax Exemption: Connecticut Innovations (CI) can act as a conduit for a sales and use tax exemption for the company’s anticipated qualifying capital equipment and/or construction materials. This exemption will relieve the company and/or the developer from the state’s 6.35% sales tax, up to the CI Board approved amount. This procedure is subject to review and approval by the CI Board of Directors and the Connecticut Department of Revenue Services.
Angel Investor Tax Credit Program: The State of Connecticut launched a program in 2010 that allows Angel Investors to take a credit against Connecticut State income tax for certain investments made in qualifying businesses. Investments must be at least $25,000 in order to be considered under the Program and the income tax credit equals 25% of the cash investment, up to a maximum credit of $250,000.
- Qualified businesses must apply to Connecticut Innovations and be approved to be eligible for a tax credit
- The Connecticut business must be principally located in Connecticut and be engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner
The business must have annual gross revenues of less than $1 million in the most recent income year; have fewer than 25 employees, not less than 75% of whom reside in the state; have been operating in the state for less than seven consecutive years; be primarily owned by the management of the business and their families; and received less than $2 million in cash investments eligible for the tax credits.