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CT Ruling 89-231 Controlling Interest Transfer Tax 1989-11-21

Did a merger and deed transfer between two commonly owned corporations trigger Connecticut's controlling interest transfer tax?

Short answer: No under this revoked ruling. DRS treated the transaction as a real-estate conveyance rather than a controlling-interest transfer and found the deed exempt under Conn. Gen. Stat. § 12-498(a)(7). DRS says Ruling 91-2 revoked this guidance.

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 is an official 1989 Connecticut Department of Revenue Services Ruling reflecting the merger and transfer-tax position then stated. DRS expressly marks the information 'not current' and says Ruling 91-2 revoked it. Its conclusion that the deed implicated real estate conveyance tax rather than controlling interest transfer tax must not be treated as current guidance. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
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)

Note -- revoked historical guidance. DRS marks this information "not current" and states that Ruling 91-2 revoked this ruling.

Plain-English summary

X Company, a Connecticut corporation, was to disappear in a merger with Y Corporation, a New York corporation. The same individual owned all shares of both companies, and X Company was to deed its Connecticut real property to Y Corporation as the surviving company.

DRS concluded that the deed implicated the real estate conveyance tax provisions, not the controlling interest transfer tax provisions. It then ruled that the conveyance fell within Conn. Gen. Stat. § 12-498(a)(7) and was exempt from tax.

What this means for you

This historical result cannot be relied on: DRS later revoked Ruling 89-231 through Ruling 91-2. The original ruling's distinction depended on an actual conveyance by deed in the described merger.

Common questions

Did DRS apply the controlling interest transfer tax? No under this revoked ruling.

Which tax provisions did DRS say were implicated? The real estate conveyance tax provisions.

Was the deed taxable under the ruling? No. DRS treated it as an exempt conveyance under § 12-498(a)(7).

Citations and references

  • Conn. Gen. Stat. § 12-498(a)(7), as cited in the ruling.
  • 32 H.R. Proc., Pt. 28, 1989 Sess., p. 9821, as cited in the ruling.
  • Ruling 91-2 -- identified by DRS as revoking this ruling.

Source

Original ruling text

Ruling 89-231, Controlling Interest Transfer Tax

This information is not current and is being provided for reference purposes only

Ruling 89-231

Controlling Interest Transfer Tax

This Ruling has been revoked by   Ruling 91-2

Your letter indicates that X Company, a corporation organized under Connecticut law, will be the disappearing corporation in a merger with Y Corporation, a corporation organized under New York law. One natural person, to wit, John Doe, owns all of the issued and outstanding shares of both X Company and Y Corporation. Pursuant to the merger, X Company will cause to be delivered a deed conveying all of its Connecticut real property to Y Corporation, the surviving corporation.

It is the position of the Department that the real estate conveyance tax provisions--and not the controlling interest transfer tax provisions--are implicated by your ruling request. The General Assembly intended that the controlling interest transfer tax provisions be operable only where conveyances were not made. See 32 H.R. Proc., Pt. 28, 1989 Sess., p. 9821.

It is hereby ruled that X Company has made a conveyance that is described in Conn. Gen. Stat. § 12-498(a)(7) and that is, accordingly, exempted from tax.

LEGAL DIVISION

November 21, 1989

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