Sec. 12-391. Transfer of resident and nonresident estates. - Connecticut Statutes

      Sec. 12-391. Transfer of resident and nonresident estates. (a) With respect to estates of decedents who die prior to January 1, 2005, and except as otherwise provided in section 59 of public act 03-1 of the June 30 special session*, a tax is imposed upon the transfer of the estate of each person who at the time of death was a resident of this state. The amount of the tax shall be the amount of the federal credit allowable for estate, inheritance, legacy and succession taxes paid to any state or the District of Columbia under the provisions of the federal internal revenue code in force at the date of such decedent's death in respect to any property owned by such decedent or subject to such taxes as part of or in connection with the estate of such decedent. If real or tangible personal property of such decedent is located outside of this state and is subject to estate, inheritance, legacy, or succession taxes by any state or states, other than the state of Connecticut, or by the District of Columbia for which such federal credit is allowable, the amount of tax due under this section shall be reduced by the lesser of: (1) The amount of any such taxes paid to such other state or states or said district and allowed as a credit against the federal estate tax; or (2) an amount computed by multiplying such federal credit by a fraction, (A) the numerator of which is the value of that part of the decedent's gross estate over which such other state or states or said district have jurisdiction for estate tax purposes to the same extent to which this state would assert jurisdiction for estate tax purposes under this chapter with respect to the residents of such other state or states or said district, and (B) the denominator of which is the value of the decedent's gross estate. Property of a resident estate over which this state has jurisdiction for estate tax purposes includes real property situated in this state, tangible personal property having an actual situs in this state, and intangible personal property owned by the decedent, regardless of where it is located. The amount of any estate tax imposed under this subsection shall also be reduced, but not below zero, by the amount of any tax that is imposed under chapter 216 and that is actually paid to this state.

      (b) With respect to the estates of decedents who die prior to January 1, 2005, and except as otherwise provided in section 59 of public act 03-1 of the June 30 special session*, a tax is imposed upon the transfer of the estate of each person who at the time of death was a nonresident of this state, the amount of which shall be computed by multiplying (1) the federal credit allowable for estate, inheritance, legacy, and succession taxes paid to any state or states or the District of Columbia under the provisions of the federal internal revenue code in force at the date of such decedent's death in respect to any property owned by such decedent or subject to such taxes as a part of or in connection with the estate of such decedent by (2) a fraction, (A) the numerator of which is the value of that part of the decedent's gross estate over which this state has jurisdiction for estate tax purposes and (B) the denominator of which is the value of the decedent's gross estate. Property of a nonresident estate over which this state has jurisdiction for estate tax purposes includes real property situated in this state and tangible personal property having an actual situs in this state. The amount of any estate tax imposed under this subsection shall also be reduced, but not below zero, by the amount of any tax that is imposed under chapter 216 and that is actually paid to this state.

      (c) For purposes of this section:

      (1) "Connecticut taxable estate" means (A) the gross estate less allowable deductions, as determined under Chapter 11 of the Internal Revenue Code, plus (B) the aggregate amount of all Connecticut taxable gifts, as defined in section 12-643, made by the decedent for all calendar years beginning on or after January 1, 2005. The deduction for state death taxes paid under Section 2058 of said code shall be disregarded.

      (2) "Internal Revenue Code" means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, except in the event of repeal of the federal estate tax, then all references to the Internal Revenue Code in this section shall mean the Internal Revenue Code as in force on the day prior to the effective date of such repeal.

      (3) "Gross estate" means the gross estate, for federal estate tax purposes.

      (d) (1) With respect to the estates of decedents who die on or after January 1, 2005, a tax is imposed upon the transfer of the estate of each person who at the time of death was a resident of this state. The amount of the tax shall be determined using the schedule in subsection (g) of this section. A credit shall be allowed against such tax for any taxes paid to this state pursuant to section 12-642 for Connecticut taxable gifts made on or after January 1, 2005.

      (2) If real or tangible personal property of such decedent is located outside of this state and is subject to estate, inheritance, legacy or succession taxes by any state or states, other than the state of Connecticut, or by the District of Columbia, the amount of tax due under this section shall be reduced by the lesser of: (A) The amount of any taxes paid to such other state or states or said district; or (B) an amount computed by multiplying the tax otherwise due pursuant to subdivision (1) of this subsection, without regard to the credit allowed for any taxes paid to this state pursuant to section 12-642, by a fraction, (i) the numerator of which is the value of that part of the decedent's gross estate over which such other state or states or said district have jurisdiction for estate tax purposes to the same extent to which this state would assert jurisdiction for estate tax purposes under this chapter, with respect to the residents of such other state or states or said district, and (ii) the denominator of which is the value of the decedent's gross estate.

      (3) Property of a resident estate over which this state has jurisdiction for estate tax purposes includes real property situated in this state, tangible personal property having an actual situs in this state and intangible personal property owned by the decedent, regardless of where it is located.

      (e) (1) With respect to the estates of decedents who die on or after January 1, 2005, a tax is imposed upon the transfer of the estate of each person who at the time of death was a nonresident of this state. The amount of such tax shall be computed by multiplying (A) the amount of tax determined using the schedule in subsection (g) of this section by (B) a fraction, (i) the numerator of which is the value of that part of the decedent's gross estate over which this state has jurisdiction for estate tax purposes, and (ii) the denominator of which is the value of the decedent's gross estate. A credit shall be allowed against such tax for any taxes paid to this state pursuant to section 12-642, on or after January 1, 2005.

      (2) Property of a nonresident estate over which this state has jurisdiction for estate tax purposes includes real property situated in this state and tangible personal property having an actual situs in this state.

      (f) (1) For purposes of the tax imposed under this section, the value of the Connecticut taxable estate shall be determined taking into account all of the deductions available under the Internal Revenue Code of 1986, specifically including, but not limited to, the deduction available under Section 2056(b)(7) of said code for a qualifying income interest for life in a surviving spouse.

      (2) An election under said Section 2056(b)(7) may be made for state estate tax purposes regardless of whether any such election is made for federal estate tax purposes. The value of the gross estate shall include the value of any property in which the decedent had a qualifying income interest for life for which an election was made under this subsection.

      (g) With respect to the estates of decedents dying on or after January 1, 2005, the tax based on the Connecticut taxable estate shall be as provided in the following schedule:

Amount of Connecticut
Taxable EstateRate of Tax
    Not over $2,000,000  None   Over $2,000,000
      but not over $2,100,000  5.085% of the excess over $0
    Over $2,100,000
      but not over $2,600,000  $106,800 plus 8% of the excess
      over $2,100,000   Over $2,600,000
      but not over $3,100,000  $146,800 plus 8.8% of the excess
      over $2,600,000   Over $3,100,000
      but not over $3,600,000  $190,800 plus 9.6% of the excess
      over $3,100,000   Over $3,600,000
      but not over $4,100,000  $238,800 plus 10.4% of the excess
      over $3,600,000   Over $4,100,000
      but not over $5,100,000  $290,800 plus 11.2% of the excess
      over $4,100,000   Over $5,100,000
      but not over $6,100,000  $402,800 plus 12% of the excess
      over $5,100,000   Over $6,100,000
      but not over $7,100,000  $522,800 plus 12.8% of the excess
      over $6,100,000   Over $7,100,000
      but not over $8,100,000  $650,800 plus 13.6% of the excess
      over $7,100,000   Over $8,100,000
      but not over $9,100,000  $786,800 plus 14.4% of the excess
      over $8,100,000   Over $9,100,000
      but not over $10,100,000  $930,800 plus 15.2% of the excess
      over $9,100,000   Over $10,100,000
      $1,082,800 plus 16% of the excess
      over $10,100,000

      (h) (1) For the purposes of this chapter, each decedent shall be presumed to have died a resident of this state. The burden of proof in an estate tax proceeding shall be upon any decedent's estate claiming exemption by reason of the decedent's alleged nonresidency.

      (2) Any person required to make and file a tax return under this chapter, believing that the decedent died a nonresident of this state, may file a request for determination of domicile in writing with the Commissioner of Revenue Services, stating the specific grounds upon which the request is founded provided (A) such person has filed such return, (B) at least two hundred seventy days, but no more than three years, has elapsed since the due date of such return or, if an application for extension of time to file such return has been granted, the extended due date of such return, (C) such person has not been notified, in writing, by said commissioner that a written agreement of compromise with the taxing authorities of another jurisdiction, under section 12-395a, is being negotiated, and (D) the commissioner has not previously determined whether the decedent died a resident of this state. Not later than one hundred eighty days following receipt of such request for determination, the commissioner shall determine whether such decedent died a resident or a nonresident of this state. If the commissioner commences negotiations over a written agreement of compromise with the taxing authorities of another jurisdiction after a request for determination of domicile is filed, the one-hundred-eighty-day period shall be tolled for the duration of such negotiations. When, before the expiration of such one-hundred-eighty-day period, both the commissioner and the person required to make and file a tax return under this chapter have consented in writing to the making of such determination after such time, the determination may be made at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. The commissioner shall mail notice of his proposed determination to the person required to make and file a tax return under this chapter. Such notice shall set forth briefly the commissioner's findings of fact and the basis of such proposed determination. Sixty days after the date on which it is mailed, a notice of proposed determination shall constitute a final determination unless the person required to make and file a tax return under this chapter has filed, as provided in subdivision (3) of this subsection, a written protest with the Commissioner of Revenue Services.

      (3) On or before the sixtieth day after mailing of the proposed determination, the person required to make and file a tax return under this chapter may file with the commissioner a written protest against the proposed determination in which such person shall set forth the grounds on which the protest is based. If such a protest is filed, the commissioner shall reconsider the proposed determination and, if the person required to make and file a tax return under this chapter has so requested, may grant or deny such person or the authorized representatives of such person an oral hearing.

      (4) Notice of the commissioner's determination shall be mailed to the person required to make and file a tax return under this chapter and such notice shall set forth briefly the commissioner's findings of fact and the basis of decision in each case decided adversely to such person.

      (5) The action of the commissioner on a written protest shall be final upon the expiration of one month from the date on which he mails notice of his action to the person required to make and file a tax return under this chapter unless within such period such person seeks review of the commissioner's determination pursuant to subsection (b) of section 12-395.

      (6) Nothing in this subsection shall be construed to relieve any person filing a request for determination of domicile of the obligation to pay the correct amount of tax on or before the due date of the tax.

      (1949 Rev., S. 2065; 1961, P.A. 163, S. 1.; P.A. 97-165, S. 1, 16; P.A. 05-251, S. 69; June Sp. Sess. P.A. 05-3, S. 54.)

      *Note: Section 59 of public act 03-1 of the June 30 special session is special in nature and therefore has not been codified but remains in full force and effect according to its terms.

      History: 1961 act makes subtrahend for computing estate tax federal credit allowed rather than 80% of estate tax payable to United States; P.A. 97-165 designated existing section as Subsec. (a), deleted existing computation and added new computation, added new Subsec. (b) re application of tax to nonresidents, added new Subsec. (c) re definition of gross estate and added new Subsec. (d) re procedure for determination of domicile, effective July 1, 1997, and applicable to the estate of any person whose death occurs on or after July 1, 1997; P.A. 05-251 amended Subsecs. (a) and (b) by adding provision re estates of decedents who die prior to January 1, 2005, deleted former Subsec. (c) defining "gross estate" and replaced it with new Subsec. (c) re definitions, new Subsec. (d) re tax on residents, Subsec. (e) re tax on nonresidents, Subsec. (f) re federal deductions, and Subsec. (g) re rate structure, and redesignated existing Subsec. (d) as Subsec. (h), effective June 30, 2005, and applicable to estates of decedents who die on or after January 1, 2005; June Sp. Sess. P.A. 05-3 amended Subsecs. (a) and (b) to include references to Sec. 59 of June 30 Sp. Sess. P.A. 03-1, effective June 30, 2005.

      See Sec. 12-642 re gift tax.

      The purpose of the Connecticut estate tax is to make the state death taxes large enough to absorb the full credit available under the federal law against the federal estate tax and thus, in effect, to divert into the state treasury what would otherwise be taken by the federal government as part of the federal estate tax. If a surviving spouse is immune from obligation as to the federal estate tax, she is immune from obligation as to the Connecticut estate tax. 144 C. 134. Cited. 149 C. 334.