SN 93(3)

1993 Legislation Affecting the Unrelated
Business Taxable Income Tax

PURPOSE: The purpose of this Special Notice is to describe recently enacted legislation affecting the unrelated business taxable income tax imposed under Conn. Gen. Stat. §12-242aa et seq, to inform taxpayers and tax practitioners of an error in the line instructions to 1992 Form CT-990T, which, if followed, will result in incorrect entries being made from the 1992 federal Form 990-T and to explain the correct entries to be made from the 1992 federal Form 990-T.

STATUTORY AUTHORITY: Conn. Gen. Stat. §§12-242aa and 12-242bb, as amended by 1993 Conn. Pub. Acts 9.

EFFECTIVE DATE: Applicable to income years commencing on or after January 1, 1992.

DUE DATE FOR FORM CT-990T CONFORMS TO DUE DATE FOR FEDERAL FORM 990-T: The Form CT-990T will be due on the same day that the organization's federal Form 990-T is due without regard to any extension of time to file the federal return.

Prior to the passage of 1993 Conn. Pub. Acts 9, the Form CT-990T was due on the first day of the fourth month next succeeding the end of the organization's income year.

The due date for the federal Form 990-T is set out in 26 C.F.R. §§1.6072-1(a) and (c) and 6072-2(c). (Generally, the due date is the fifteenth day of the fifth month following the close of the organization's income year; for certain trusts, however, the due date is the fifteenth day of the fourth month following the close of their income year.)

INCORRECT LINE INSTRUCTIONS: The instructions to Line 1 of the Computation of Income and Tax section of the 1992 Form CT-990T incorrectly direct the organization to enter the amount of Federal Unrelated Business Taxable Income from its 1992 federal Form 990-T, Line 5. The correct direction is to enter the amount from its 1992 federal Form 990-T, Part II, Line 34.

The instructions to Line 2 of the Computation of Income and Tax section of the 1992 Form CT-990T incorrectly direct the organization to add back the amount of its Federal Net Operating Loss Deduction from its 1992 federal Form 990-T, Line 2 or Line 30. The correct direction is to add back the amount entered on its 1992 federal Form 990-T, Part II, Line 31.

GENERAL ASSEMBLY CONFIRMS THAT TAX APPLIES TO TRUSTS AS WELL AS TO CORPORATIONS: Special Notice 92(15) indicated that the unrelated business taxable income tax applies to trusts as well as corporations that are exempt from taxation under 26 U.S.C. §501(a). Conn. Gen. Stat. §12-242aa(a)(7), as added by 1993 Conn. Pub. Acts 9, §1, defines the organizations that are subject to the tax as those organizations that are described in 26 U.S.C. §511(a)(2)(A) or those trusts that are described in 26 U.S.C. §511(b)(2).

EFFECT ON OTHER DOCUMENTS: The portion of SN 92(15) that is headed "FILING REQUIREMENTS" is modified and superseded to the extent that it indicates that the Form CT-990T must be filed on or before the first day of the fourth month next succeeding the end of the income year.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners. 

SN 93(3)
Unrelated business taxable income tax
Issued: 4/13/93