DRS: PS 94(5), Tax Credits and Exemptions for Certain Air Pollution Equipment

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Policy Statement has been modified and superseded by PS 99(2)

PS 94(5)

Tax Credits and Exemptions for Certain
Air Pollution Equipment


PURPOSE: This Policy Statement describes the procedures that taxpayers must follow in making purchases of air pollution control equipment exempt fro sales and use taxes pursuant to Conn. Gen. Stat. 12-412(22) and in taking a credit against the corporation business tax, pursuant to Conn. Gen. Stat. 12-217c. of five percent of the amount of expenditures paid or incurred during the income year for the construction, rebuilding, acquisition or expansion of air pollution abatement facilities.  This Policy Statement also provides information about a municipal property tax exemption pursuant to Conn. Gen. Stat.  12-81(52), and explains the qualification process for such exemption.

This Policy Statement describes types of air pollution control equipment which have been designated as approved by the Commissioner of Environmental Protection for use, incorporation, or consumption in air pollution control facilities.  If an item of tangible personal property appears on the list contained in this Policy Statement, it is no longer necessary for a purchaser to obtain advance written approval from the Department of Environmental Protection in order to qualify for the exemption from sales and use taxes on the purchase of such item pursuant to Conn. Gen. Stat.  12-412(22) or to obtain the corporation business tax credit pursuant to Conn. Gen. Stat.  12-217c, or the municipal property tax exemption pursuant to Conn. Gen. Stat.  12-81(52).


BACKGROUND: An exemption from sales and excise taxes is available under Conn. Gen. Stat. 12-412(22) for purchases of tangible personal property or supplies, certified by the Department of Environmental Protection, which are acquired for incorporation into or used and consumed in the operation of facilities,  the primary purpose of which is the reduction, control or elimination of air pollution.  This exemption applies only to purchases of tangible personal property or supplies, and is not available for purchases of taxable services.

A credit against the corporation business tax is available under Conn. Gen. Stat.12-217c for an amount equal to five percent of the expenditures paid or incurred during an income year for the construction, rebuilding, acquisition or expansion of air pollution abatement facilities, including the planning thereof, approved by the Department of Environmental Protection.  Qualifying expenditures include purchases of both tangible personal property and services.

An exemption from municipal property taxes is available under Conn. Gen. Stat. 12-81(52) for structures and equipment acquired for the primary purpose of reducing, controlling or eliminating air pollution, certified as approved for such purpose by the Department of Environmental Protection.


EFFECTIVE DATE: Effective upon issuance. 


STATUTORY AUTHORITY: Conn. Gen. Stat. 12-412(22), 12-217c and 12-81(52).


PROCEDURES FOR QUALIFYING PURCHASES FOR SALES AND USE TAX EXEMPTION PURSUANT TO CONN. GEN. STAT. 12-412(22): If an item of tangible personal property appears on the list of air pollution control equipment contained in this Policy Statement and is intended to be incorporated into or used and consumed in the operation of facilities, the primary purpose of which is the reduction, control or elimination of air pollution, the purchaser need only present the retailer of such item with a copy of a properly completed CERT-117, Certificate for Purchases of Tangible Personal Property Incorporated Into or Consumed in Air Pollution  Control Facilities.

In the event that an item of tangible personal property does not appear on the list in this Policy Statement, but the purchaser intends to use or consume it in the operation of facilities, the primary purpose of which is the reduction, control or elimination of air pollution, the purchaser must receive written approval from the Commissioner of Environmental Protection indicating that such item of tangible personal property is approved for use in an air pollution control facility.  Such written approval must be appended to CERT-117, Certificate for Purchases of Tangible Personal Property Incorporated into or Consumed in Air Pollution Control Facilities, and the procedures for use of that certificate should be followed once such written approval has been secured.


PROCEDURES FOR TAKING THE CORPORATION BUSINESS TAX CREDIT PURSUANT TO CONN. GEN. STAT. 12-217c:  If an item of tangible personal property appears on the list in this Policy Statement and is intended to be incorporated into or used and consumed in the construction, rebuilding, acquisition or expansion of air pollution abatement facilities, including the planning thereof, the purchaser need only retain a copy of CERT-117, Certificate of Purchases of Tangible Personal Property Incorporated into or Consumed in Air Pollution Control Facilities, and append it to its Form CT-1120, Connecticut corporation business tax return.  The certificate will substantiate the credit for air pollution abatement facilities pursuant to Conn. Gen. Stat. 12-217c that is listed on Form CT-1120/CT-1120S ATT, Schedule K, Line 1.

In the event that an item of tangible personal property does not appear on the list in this Policy Statement, but the purchaser intends to use or consume it in the operation of facilities, the primary purpose of which is the reduction, control or expansion, or planning of air pollution facilities and the purchaser desires to include such services in the total amount of expenditures eligible for the credit against the corporation business tax, the purchaser must receive advance written approval from the Commissioner of Environmental Protection indicating that such item of tangible personal property or service is approved for use in an air pollution control facility.  Such written approval must be appended to the CERT-117, Certificate of Purchases of Tangible Personal Property Incorporated into or Consumed in Air Pollution Control Facilities, and the procedures listed on that certificate should be followed once such written approval has been secured.

For purposes of the corporation business tax credit for air pollution abatement facilities, Conn. Gen. Stat. 12-217c, the Department of Environmental Protection has indicated in Conn. Agencies Regs. 22a-174-30 that the services of construction, installation and testing are deemed approved when performed in compliance with Stage 11 Vapor Recovery Laws, Conn. Gen. Stat. 22a-174 and Conn. Agencies Regs. 22a-174-30.  However, in order to substantiate the receipt of such services for purposes of the corporation business tax credit, the purchaser must append to Form CT-1120 copies of the receipts for the construction, installation and testing services performed in connection with Stage II compliance.


PROCEDURES FOR QUALIFYING PURCHASES FOR MUNICIPAL PROPERTY TAX RELIEF PURSUANT TO CONN. GEN. STAT. 12-18(52): The Commissioner of Revenue Services does not directly administer Conn. Gen. Stat. 12-18(52) which is a municipal property taxing statute affording an exemption from property tax for certain air pollution control equipment.  Nevertheless, in order to facilitate the procedures for qualifying purchases for such an exemption, CERT-117, Certificate for Purchases of Tangible Personal Property Incorporated into or Consumed in Air Pollution Control Facilities, when properly completed, shall serve as the certification of approval by the Commissioner of Environmental Protection as required by Conn. Gen. Stat. 12-81(52) that such equipment has the primary purpose of reducing, controlling or eliminating air pollution.

In order to qualify for such exemption, the taxpayer should file a copy of CERT-117 with the assessor of the municipality in which the air pollution control equipment or structure is located on or before the first day of November in such assessment year. Any inquiries regarding that exemption should be addressed to the relevant municipal assessor.

For information on how to complete CERT-117, follow the same procedures outlined in Qualifying Purchases for Sales and Use Tax Exemption Pursuant to Conn. Gen. Stat. 12-412(22) on page 2 of this Policy Statement.


LIST OF AIR POLLUTION CONTROL EQUIPMENT AND CONSUMABLES DESIGNATED AS APPROVED FOR USE, CONSUMPTION OR INCORPORATION IN AIR POLLUTION CONTROL FACILITIES:

  • Activated Carbon Adsorption or Carbon Absorbers
  • Ammonia
  • Selective Catalytic or Non Catalytic Reduction
  • Bags
  • Breakaway Couplings
  • Catalysts
  • Catalytic Afterburner with or without Heat Exchanger
  • Centrifugal Collector
  • Coaxial Hose
  • Combustion Modification to Meet NOx RACT
  • Control Equipment to Meet CTGS, RACT or Other Regulatory Requirements
  • Cyclone, Including Multiple Cyclone
  • Desulfurization
  • Direct Flame Afterburner
  • Dry Limestone Injection
  • Electrostatic Precipitator
  • Fabric Filter
  • Flares
  • Flue Gas Recirculation
  • Gas Scrubber
  • Gravity Collector
  • Limestone
  • Mist Eliminator
  • Nitrogen Blanket
  • Reagents - i.e., lime, carbon, etc.
  • Reagent Scrubbing Processes
  • Retrofit Kit
  • Spray Booth Filters
  • Staged Combustion
  • Steam or Water Injection, Water Sprays
  • Thermal Afterburner with or without HX
  • Tray - Type Gas Adsorption Column
  • Ultrasonic Water Sprays
  • Urea
  • Vapor Lock Balance Recovery System
  • Vapor Recovery Nozzle
  • Vapor Recovery System (including condensers)
  • Vapor Return Piping
  • Water Wash
  • Wet Electrostatic Precipitators
  • Wet Scrubber or Adsorbed, i.e., Venturi, etc.
  • Whip Hose

HOW TO OBTAIN WRITTEN APPROVAL FOR AIR POLLUTION CONTROL EQUIPMENT NOT LISTED IN THIS POLICY STATEMENT: Call the Engineering and Enforcement Division of DEP's Air Management Bureau at 424-3028. Written requests should be mailed to:

    Director of Engineering & Enforcement
    Bureau of Air Management
    Connecticut Department of Environmental Protection
    79 Elm Street
    Hartford, CT 06106-5127


EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth  a current Department policy or practice affecting the liability of taxpayers. A Policy Statement indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or practitioners.


FOR FURTHER INFORMATION: To order forms, certificates or publications, call the Forms Unit at 860-297-4753. For further information, call Taxpayer Services at 1-800-382-9463 (in-state) or 860-566-7033. TDD/TT users only call 860-297-4911.


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 at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.


PS 94(5)
Sales and use taxes
Corporation Business Tax
Issued: 12/13/94