342 A.2d 913 | Conn. Super. Ct. | 1975
The plaintiff is appealing from a deficiency assessment regarding the corporate business tax by the defendant tax commissioner for the disputed income year beginning Monday, December 26, 1966, and ending Sunday, December 31, 1967. In accordance with the provisions of General Statutes §
Prior to the enactment of Public Acts 1967, No. 586, the state of Connecticut taxed foreign corporations doing business in this state partially on the basis of the capitalized value of real property rented in Connecticut. Following Public Act 586, the state taxed in that manner not only realty but also personalty. See General Statutes §
General Statutes §
The sole issue presented on appeal is what provisions of the Internal Revenue Code of 1954;
Section 441(f) of the Internal Revenue Code of 1954;
If only subparagraph (1) of § 441(f), "General rule," has been incorporated by reference under our state law, there is merit to the plaintiff's argument that Public Acts 1967, No. 586, does not apply to the plaintiff's income in the fiscal year running from December 26, 1966, to December 31, 1967. That would follow from a literal reading of the act which provides that it shall "apply to income years beginning on and after January 1, 1967." If subparagraph (2) of § 441(f), "Special rules," has also been incorporated, the plaintiff's taxable year would, however, have begun on January 1, 1967, and the tax provided by Public Act 586 would properly be assessed for the period in question. The difference is substantial to the plaintiff.
The plaintiff has argued that certain provisions of the "Special rules" of § 441(f)(2) are inapplicable to the Connecticut corporate tax and that therefore the section cannot apply. The court cannot adopt that reasoning. The specific provisions which obviously have no application may be disregarded without elimination of the relevant portions dealing with effective dates. The plaintiff also argues that since the phrase "of this title" is used in § 441(f)(2)(A) of the code, it obviously applies only to the Internal Revenue Code and has no application to Connecticut law. There is no merit to that argument since the phrase "of this subtitle" is included in § 441(f)(1), which is admittedly applicable and permitted the plaintiff the election of the fiscal year that it chose to make.
In support of its claim that a strict construction of the applicable statutes does not permit incorporation by reference of § 441(f)(2)(A) of the code, the plaintiff has cited Allentown Wholesale GroceryCo. v. Commonwealth,
A study of the legislative history of the taxing statutes which permit the election of a variable fifty-two to fifty-three week year as chosen by the plaintiff indicates that the laws were adopted for the convenience of the taxpayers so that they could compute their taxable income on the same basis as that used for federal taxation. Therefore, when, in defining "fiscal year," General Statutes §
The court finds that Public Acts 1967, No. 586, applies to the disputed income year, and the plaintiff's appeal is denied. In accordance with a stipulation by the parties, the plaintiff is ordered to pay an additional tax in the amount of $71,664.65 together with interest thereon as provided by law.