AN 94(1)

Rulings And Administrative Pronouncements Obsolete By Legislative Changes Affecting The Corporation Business Tax Act

PURPOSE: The purpose of this Announcement is to identify rulings and administrative pronouncements that, while valid when issued, should no longer be relied upon. The Department will declare a ruling or pronouncement to be "obsolete" where, because of changes in the law on which a ruling or pronouncement was based or because a position that was taken in a ruling or pronouncement has been addressed in a subsequently promulgated regulation, the ruling or pronouncement is no longer considered authoritative and should not be relied upon for future taxable periods. By declaring a ruling or pronouncement to be obsolete, the Department intends to eliminate unnecessary research and to reduce the possibility of erroneous decisions by taxpayers and tax practitioners. The fact that a ruling or pronouncement is "obsolete" does not affect its past validity or its application to past taxable periods.

ADDITIONAL TAX NOT TO APPLY TO REAL ESTATE INVESTMENT TRUSTS OR REGULATED INVESTMENT COMPANIES: With the passage of 1993 Conn. Pub. Acts 74, § 59, the additional tax provisions of Conn. Gen. Stat. §12-219 are no longer applicable to real estate investment trusts or regulated investment companies in income years commencing on or after January 1, 1993. Formerly, those provisions did apply to real estate investment trusts and regulated investment companies. Accordingly, Ruling Nos. 91-26 and 92-10 are no longer considered determinative to the extent that they pertain to the additional tax, but are still considered determinative otherwise, with respect to income years commencing on or after January 1, 1993.

COOPERATIVE HOUSING CORPORATION EXEMPTION CHANGED: With the passage of 1994 Conn. Pub. Acts 4, amending Conn. Gen. Stat. § 12-214(a)(5), cooperative housing corporations are exempt from corporation business tax, for income years commencing on or after January 1, 1990, even if they have federal taxable income. Formerly, they were exempt only if they had no federal taxable income. Accordingly, Ruling No. 93-19 is no longer considered determinative to the extent that it pertains to the requirement that a cooperative housing corporation have no federal taxable income in order to be exempt, but is still considered determinative otherwise, with respect to income years commencing on or after January 1, 1990.

REPEAL OF PENALTY IMPOSED ON UNDERPAYMENT OF ESTIMATED TAX: For income years commencing on or after January 1, 1991, a penalty will no longer be imposed on underpaid estimated tax installments, although interest will still accrue on such installments. (See 1991 Conn. Pub. Acts 3, § 102 (June Spec. Sess.), amending Conn. Gen. Stat. § 12-242d.) Accordingly, TSSN-14 and TSSN-14A are no longer considered determinative with respect to income years commencing on or after January 1, 1991.

NET INCOME OF S CORPORATIONS DEFINED: With the addition of subsection (c) to Conn. Gen. Stat. § 12-217, by 1991 Conn. Pub. Acts 3, § 100 (June Spec. Sess.), expressly defining "net income", in the case of an S corporation, Bulletin 19 is no longer considered determinative with respect to income years commencing on or after January 1, 1991.

EFFECT OF THIS DOCUMENT: An Announcement is a document that alerts taxpayers to important information. Such information may involve new Department administrative policies or procedures.

EFFECT ON OTHER DOCUMENTS: The above-listed TSSNs and Bulletin are obsolete and the above-listed rulings are obsolete in part. 

AN 94(1)
Corporation business tax
Issued: 5/17/94