1997 Legislative Changes Affecting the Estate Tax
PURPOSE: The purpose of this Special Notice is to summarize the 1997 legislation that affects the estate tax. The estate tax is based upon and is limited by the federal credit for state death taxes (Internal Revenue Code §2011).
STATUTORY AUTHORITY: Conn. Gen. Stat.§12-391, as amended by 1997 Conn. Pub. Acts 165, §1; Conn. Gen. Stat. §12-392, as amended by 1997 Conn. Pub. Acts 165, §2; Conn. Gen. Stat. §12-395, as amended by 1997 Conn. Pub. Acts 165, §3; Conn. Gen. Stat. §12-398, as amended by Conn. Pub. Acts 165, §4; 1997 Conn. Pub. Acts 165, §5 (new); Conn. Gen. Stat. §12-15, as amended by 1997 Conn. Pub. Acts 165, §6; and Conn. Gen. Stat. §12-39 1, as amended by 1997 Conn. Pub. Acts 165, §7.
EFFECTIVE DATE: The provisions of 1997 Conn. Pub. Acts 165, §§1-5, are applicable to estates of decedents dying on or after July 1, 1997; the provisions of 1997 Conn. Pub. Acts, §§6-9, are effective July 1, 1997.
IMPOSITION OF TAX ON NONRESIDENTS: 1997 Conn. Pub. Acts 165, §1, imposes the estate tax on the estates of nonresident decedents owning real property or tangible personal property in Connecticut. The Connecticut estate tax is equal to the credit for estate death taxes allowable for federal estate tax purposes multiplied by the ratio of the Connecticut gross estate over the decedent’s gross estate.
ESTATE TAX ON CONNECTICUT RESIDENTS: The estate tax for Connecticut residents is based upon the provisions for the federal credit for death taxes as set forth in 26 U.S.C. §2011. In cases where a Connecticut resident decedent dies owning real property or tangible personal property located outside Connecticut, the Connecticut estate tax is reduced by the lesser of death taxes paid to the other states or the portion of the federal credit for state death taxes determined by applying to that credit a ratio of the decedent’s gross estate outside of Connecticut over the decedent’s gross estate.
DETERMINATION OF DOMICILE: 1997 Conn. Pub. Acts 165, §1, stipulates that when the person required to file a return under Chapter 217, believes that the decedent was a nonresident of Connecticut at the time of death, such person may file a request for determination of the decedent’s domicile to the Department. The request may be filed provided:
such person who is required to make and file a return under Chapter 217, did file the estate tax return;
at least 270 days but no more than three years have passed from the due date of the return, or if an extension was filed with the Department, from the extended due date;
the Department has not notified the estate that it is negotiating a compromise with another state;
the Department has not previously determined whether the decedent died while a resident of Connecticut.
The Department will notify the person required to make and file the estate tax return of its decision in a Notice of Proposed Determination. If the estate disagrees with the decision, it has 60 days after the mailing date of the notice to file a protest with the Department.
1997 Conn. Pub. Acts 165, §3, sets forth the appeal provisions to Probate Court of any persons aggrieved by the Commissioner’s determination. The aggrieved person can make a written request for a hearing with the Probate Court no later than one month after notice of such determination.
Note: A finding of the Probate Court determining the decedent’s domicile under Conn. Gen. Stat. §45a-309, will not affect the determination of residency under Chapter 217.
CONCURRENT FILING OF TAX RETURNS: 1997 Conn. Pub. Acts 165, §2, requires any tax return or other document required under Conn. Gen. Stat. §12-398, to be filed with both the Department of Revenue Services and the Court of Probate. The return must contain a signed statement by the person required to file such return or document that the concurrent filing has taken place.
IMPOSITION OF LIENS: 1997 Conn. Pub. Acts 165, §4, imposes an estate tax lien on all estates. 1997 Conn. Pub. Acts 165, §4, also authorizes the Court of Probate or the Commissioner to issue releases of liens. A lien will be released provided that the payment of tax is adequately secured or that no tax under this chapter is due.
EFFECT OF THIS DOCUMENT: A Special Notice (SN) is a document that, in response to newly enacted or amended Connecticut or federal laws or in response to newly released judicial decisions, announces a new Department position, policy or practice affecting the tax liability of taxpayers.
EFFECT ON OTHER DOCUMENTS: None affected.
FOR FURTHER INFORMATION: If you have questions about Connecticut taxes, please call the Department of Revenue Services during business hours, Monday through Friday:
860-297-5962 (Hartford calling area or from out-of-state); or
1-800-382-9463 (toll-free from within Connecticut)
Telecommunications Device for the Deaf (TDD/TT) users only, please call 860-297-4911 during business hours.
FORMS AND PUBLICATIONS:
You may obtain forms and publications at any hour, seven days a week:
Telephone: use the phone numbers listed above and select Option 3 from a touch-tone phone;
Internet: preview and download forms from the DRS Web site: http://www.ct.gov/drs.