PS 91(1)

Corporation Business Tax Liability of Merged or Dissolved Foreign Corporation Failing to Procure a Certificate of Withdrawal

Under Conn. Agencies Regs. §12-214-1(b)(2), a foreign corporation (i.e., a corporation that is not organized under the laws of the State of Connecticut) has the right to carry on business in Connecticut, if the Secretary of the State has issued to it a certificate of authority to transact business in Connecticut. (Any corporation, foreign or domestic, that has the right to carry on business in Connecticut is subject to corporation business tax.) Until a certificate of withdrawal is filed by or on behalf of the foreign corporation or a certification of revocation is filed by the Secretary of the State, Conn. Agencies Regs. §12-214-1(b)(2) provides that the foreign corporation continues to have the right to carry on business. To procure a certificate of withdrawal, the foreign corporation is required by Conn. Gen. Stat. §33-408 to file an application for withdrawal that is accompanied by, among other things, an up-to-date statement from the Commissioner of Revenue Services. This Policy Statement clarifies the policy of the Department of Revenue Services with respect to the issuance of that statement under certain circumstances.

Occasionally, a foreign corporation that has procured a certificate of authority to transact business in Connecticut will dissolve or will be the disappearing corporation in a merger or a constituent corporation in a consolidation before it has procured a certificate of withdrawal. In such a case, if the foreign corporation's legal representative applies for a certificate of withdrawal, the Department, in issuing the up-to-date statement, will not, except as noted below, take into account corporation business tax liability that is attributable to an income year or years beginning after the dissolution, merger or consolidation, as the case may be.

Under Conn. Gen. Stat. §§12-213 and 12-214, a dissolved corporation, foreign or domestic, continuing to conduct business is subject to corporation business tax. If the legal representative of a dissolved foreign corporation is applying for a certificate of withdrawal and seeks the up-to-date statement from the Commissioner of Revenue Services, the Department will continue its policy of requiring proof that the corporation has not continued to conduct business after its dissolution. 

ISSUED: 1-91