Connecticut State Department of Revenue Services

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Ruling 90-36

Corporation Business Tax

"Gross income", for corporation business tax purposes, includes "gross income as defined in the federal corporation net income tax law." Conn. Gen. Stat. §12-213. "Gross income" does not include that income not includable in gross income pursuant to 26 U.S.C. §883(a)(1).

However, the fact that a company has income not includable in gross income pursuant to 26 U.S.C. §883(a)(1) does not mean that it is a company "exempt by the federal corporation net income tax law"; Conn. Gen. Stat. §12-214 and Conn. Agencies Regs. §12-214-2(b)(2).

Please note that X Corporation would be subject to the additional tax imposed by Conn. Gen. Stat. §12-219 and may even have income (other than income not includable in gross income pursuant to 26 U.S.C. §883(a)(1)) that is subject to the tax imposed by Conn. Gen. Stat. §12-214.

For example, X Corporation may have interest income derived from State and local obligations, which income is not includable in gross income for federal income tax purposes but is includable in gross income for Connecticut corporation business tax purposes. See Conn. Gen. Stat. §12-213. Or X Corporation may have interest income derived from Federal obligations that is includable in gross income for Connecticut corporation business tax purposes, because the tax is a nondiscriminatory franchise tax. See 31 U.S.C. §3124.

LEGAL DIVISION

March 19, 1990