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Ezel / Tax Rulings / CT
CT Ruling 89-16 Controlling Interest Transfer Tax 1989-06-16

How did Connecticut Ruling 89-16 define and apply the controlling interest transfer tax?

Short answer: The tax was measured by the entity's interest in Connecticut real property and imposed on the transferor. A controlling interest meant more than 50% of corporate voting power or more than 50% of an entity's capital, profits, or beneficial interest. Payment was due by the end of the following month.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This 1989 Connecticut Department of Revenue Services Ruling answered one requester's questions about the controlling interest transfer tax under the law then in effect. It does not state that it is current, and later changes may affect the tax base, liable party, ownership threshold, filing deadline, or whether a transaction is taxable. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about a current entity-interest transfer involving Connecticut real property.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

The controlling interest transfer tax was measured by the value of the entity's interest in Connecticut real property. The transferor of the controlling interest was the person subject to the tax.

For a corporation, a controlling interest meant more than 50% of the combined voting power of all classes of stock. For a partnership, association, trust, or other entity, it meant more than 50% of the capital, profits, or beneficial interest.

The tax was due on or before the last day of the month following the month in which the controlling-interest transfer occurred.

What this means for you

The historical ruling focused on four core elements: Connecticut real-property value, the transferor as taxpayer, a more-than-50% ownership test, and a next-month payment deadline. Current transactions require a current-law review.

Common questions

Who owed the tax? The transferor of the controlling interest.

What was the corporate threshold? More than 50% of total combined voting power.

When was the tax due? By the last day of the month following the transfer month.

Citations and references

  • No statute or regulation was cited by section number in the ruling text.

Source

Original ruling text

Ruling 89-16, Controlling Interest Transfer Tax

Ruling 89-16

Controlling Interest Transfer Tax

In answer to your questions:

the tax is measured by the value of the interest in Connecticut real property.

the transferor of a controlling interest in the entity is the person subject to the tax.

a controlling interest is, in the case of a corporation, more than 50% of the total combined voting power of all classes of stock in the corporation, and, in the case of a partnership, association, trust or other entity, more than 50% of the capital, profits or beneficial interest in the entity.

the tax is due on or before the last day of the month next succeeding the month in which the transfer of a controlling interest occurs.

LEGAL DIVISION

June 16, 1989

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