Ezel / Tax Rulings / CT
CT Ruling 89-57 Corporation Business Tax 1989-08-18

Was a church exempt from Connecticut corporation business tax without an IRS determination specifically recognizing its federal tax-exempt status?

Short answer: No. The ruling required an IRS determination referring specifically to the church before the Connecticut corporation business tax exemption applied. The church could choose whether to file Form 1023, but the Department still had to enforce its regulation.

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 applying the corporation business tax exemption and its regulation to one church under the law then in effect. Federal and Connecticut nonprofit tax rules may have changed, and another religious or charitable organization should not assume this historical ruling controls its filing status. This summary is informational only and is not legal or tax advice. Consult licensed federal and Connecticut tax professionals about current exemption and filing requirements.
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)

Plain-English summary

The church was not exempt from Connecticut corporation business tax because it did not have an Internal Revenue Service determination specifically recognizing it as exempt from federal income tax.

Conn. Gen. Stat. § 12-214 linked the state exemption to federal exemption. The cited regulation required an IRS determination that referred to the particular company. Although the church could choose whether to file Form 1023, the Department said it could not decline to enforce its regulation.

What this means for you

Under the historical ruling, the organization's substantive claim that it was a church was not enough by itself. The state exemption depended on organization-specific IRS recognition.

The ruling addressed the law and regulation in effect in 1989; it does not establish current federal or Connecticut filing requirements.

Common questions

Was the church exempt from corporation business tax? No.

What was missing? An IRS determination referring specifically to the church and recognizing federal income-tax exemption.

Did the Department say the church had to file Form 1023? It said the church could choose whether to file, but without the required determination the state exemption did not apply.

Citations and references

  • Conn. Gen. Stat. § 12-214, as cited in the ruling.
  • Conn. Agencies Regs. § 12-214-2(b)(2)(D), as cited in the ruling.

Source

Original ruling text

Ruling 89-57, Exemption - Charitable

Conn. Gen. Stat. §12-214 exempts from corporation business tax any company "exempt by the federal corporation net income tax law." The accompanying regulation provides that only a company "which has been determined by the Internal Revenue Service, in a determination referring to the company, to be a company which is exempt from federal incomes taxes" shall be covered by the statutory exemption. Conn. Agencies Regs. §12-214-2(b)(2)(D).

Because your church has not been determined by the Internal Revenue Service, in a determination referring to your church, to be an organization exempt from federal income taxes, it is not exempt from corporation business tax. While your church may choose whether or not to file a Form 1023, this Department cannot choose whether or not to enforce and apply its regulations, which have the force and effect of law.

LEGAL DIVISION

August 18, 1989

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