2015 Connecticut General Statutes
Title 12 - Taxation
Chapter 228b - Controlling Interest Transfer Tax
Section 12-638b - Tax on transfer of controlling interest in entity possessing real property. Rate of tax applied to the value of the real property.

CT Gen Stat § 12-638b (2015) What's This?

(a)(1) There is hereby imposed a tax on the sale or transfer of a controlling interest in any entity which possesses, directly or indirectly, an interest in real property in this state when the present true and actual value of the interest in real property equals or exceeds two thousand dollars, payable by the person selling or transferring such controlling interest, at the rate of one and eleven one-hundredths of one per cent of the present true and actual value of the interest in real property possessed, directly or indirectly, by such entity.

(2) A taxable sale or transfer of a controlling interest may occur in one transaction or in a series of transactions. Transactions which occur within six months of each other are presumed, unless shown to the contrary, to be a series of transactions.

(3) A taxable sale or transfer of a controlling interest may be made by one seller or transferor or may be made by a group of sellers or transferors acting in concert. Sellers or transferors who are related to each other by blood or marriage are presumed, unless shown to the contrary, to be acting in concert.

(b) The tax imposed by subsection (a) of this section (1) shall not apply to any sale or transfer of a controlling interest in any entity to the extent such entity possesses, directly or indirectly, an interest in real property located in an area of any municipality designated as an enterprise zone in accordance with section 32-70, but shall apply to the extent such entity possesses, directly or indirectly, an interest in real property in this state located outside such area designated as such an enterprise zone, and (2) shall not apply to any sale or transfer of a controlling interest in any entity to effectuate a mere change of identity or form of ownership or organization where there is no change in beneficial ownership.

(P.A. 89-251, S. 39, 203; P.A. 90-315, S. 3, 6; P.A. 00-174, S. 36, 83; June 30 Sp. Sess. P.A. 03-1, S. 100.)

History: P.A. 89-251, S. 39 effective July 1, 1989, and applicable to sales or transfers of real property occurring on or after that date; P.A. 90-315 amended Subsec. (a) by deleting reference to the conveyance of such controlling interest and the real property possessed by such entity and substituted in lieu thereof “selling or transferring such controlling interest” and a description of the real property as “possessed by” such entity and amended Subsec. (b) by deleting the description of two types of transfers that would be exempt from the tax without inclusion in Subsec. (b) and by adding clarifying language to the exemption for real property located in an enterprise zone; P.A. 00-174 amended Subsec. (b) to designate existing exemption as Subdiv. (1) and to add Subdiv. (2) re exemption for transfers for purpose of change of identity or form of ownership, effective May 26, 2000, and applicable to sales or transfers occurring on or after July 1, 2000; June 30 Sp. Sess. P.A. 03-1 added provisions re the degree of property interest subject to tax and re transactions and persons subject to tax, effective August 1, 2003, for sales or transfers of a controlling interest occurring on or after that date.

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