House Bill No. 5302, reported by the Committee on Finance, Revenue and Bonding, concerns the Department of Revenue Services' recommendations for tax administration. The bill introduces changes to the general statutes regarding the examination and reexamination of tax returns, the imposition of penalties for deficiencies due to negligence, intentional disregard, or fraud, and the collection of unpaid taxes. Specifically, the bill allows for the reexamination of tax returns and reassessment of taxes within three years of the return's due date or receipt, whichever is later. It also stipulates penalties for deficiencies due to negligence (10% of the deficiency or $50, whichever is greater) and for fraud (25% of the deficiency). Additionally, the bill outlines the process for payment after reexamination, the extension of examination periods by mutual consent, and the collection of unpaid taxes, including the creation of a lien on the taxpayer's real estate.

Furthermore, the bill amends the due date for newly licensed nonresident and foreign insurance companies to pay taxes on net direct premiums from the past five years, extending the deadline from 45 to 90 days after the company's initial license to transact business in Connecticut. The bill's fiscal impact statement indicates a potential revenue gain from insurance premiums tax reaudits, with the ongoing fiscal impact expected to continue into the future. The bill is effective upon passage and amends sections 12-204 and 12-210(a) of the general statutes. The Finance, Revenue and Bonding Committee has given a joint favorable recommendation for the bill.

Statutes affected:
Raised Bill: 12-204
FIN Joint Favorable: 12-204
File No. 534: 12-204