Substitute House Bill No. 6940

Public Act No. 05-251

TAX CHANGES 2005 - Repeal of Succession/Estate Tax, Enactment of CT Estate Tax on Estates of $2M or more

Sec. 66(d) Repeal of Succession Tax on Class B Beneficiaries

Sec. 66(e) Repeal of Succession Tax on Class C Beneficiaries

Sec. 67 Repeal of Gift Tax eff. 1/1/2005

Sec. 69(d) New Connecticut estate tax eff. 1/1/2005 on estates of $2 million +

Sec. 69(f) Connecticut QTIP election

Sec. 70 Requirement that all estates file CT estate tax return

General Assembly	File No. 792
January Session, 2005	Substitute House Bill No. 6940

House of Representatives, May 22, 2005

The Committee on Finance, Revenue and Bonding reported through REP. STAPLES of the 96th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT INCREASING THE AUTHORITY OF THE TREASURER WITH RESPECT TO THE USE OF UNAPPROPRIATED GENERAL FUND SURPLUS IN EXCESS OF THAT TRANSFERRED TO THE BUDGET RESERVE FUND.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

*    *    *

General Assembly					Amendment
January Session, 2005					LCO No. 7735
				*HB0694007735HDO*

To:  Subst. House Bill No. 6940

File No. 792

Cal. No. 482

"AN ACT INCREASING THE AUTHORITY OF THE TREASURER WITH RESPECT TO THE USE OF UNAPPROPRIATED GENERAL FUND SURPLUS IN EXCESS OF THAT TRANSFERRED TO THE BUDGET RESERVE FUND. "

Strike everything after the enacting clause and substitute the following in lieu thereof:

*    *    *

Sec. 66. Subsections (d) and (e) of section 12-344 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage and applicable to estates of decedents dying after January 1, 2005):

(d) The tax under this section applicable to the net taxable estate of any transferor, whose death occurs on or after January 1, 1999, passing to a class B beneficiary shall be imposed as follows: (1) If the death of the transferor occurs on or after January 1, 1999, but prior to January 1, 2000, at the rate of (A) six per cent on the amount in excess of two hundred thousand dollars in value to and including two hundred fifty thousand dollars, (B) seven per cent on the amount in excess of two hundred fifty thousand dollars in value to and including four hundred thousand dollars, (C) eight per cent on the amount in excess of four hundred thousand dollars in value to and including six hundred thousand dollars, (D) nine per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (E) ten per cent on the amount in excess of one million dollars in value, (2) if the death of the transferor occurs on or after January 1, 2000, but prior to January 1, 2001, at the rate of (A) eight per cent on the amount in excess of four hundred thousand dollars in value to and including six hundred thousand dollars, (B) nine per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (C) ten per cent on the amount in excess of one million dollars in value, (3) if the death of the transferor occurs on or after January 1, 2001, but prior to January 1, 2005, at the rate of (A) nine per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (B) ten per cent on the amount in excess of one million dollars in value, (4) if the death of the transferor occurs on or after January 1, 2005, [but prior to January 1, 2006, at the rate of eight per cent on the amount in excess of one million five hundred thousand dollars in value, and (5) if the death of the transferor occurs on or after January 1, 2006,] the net taxable estate passing to a class B beneficiary shall not be subject to tax under this chapter.

(e) The tax under this section applicable to the net taxable estate of any transferor, whose death occurs on or after January 1, 2001, passing to a class C beneficiary shall be imposed as follows: (1) If the death of the transferor occurs on or after January 1, 2001, but prior to January 1, 2005, at the rate of (A) ten per cent on the amount in excess of two hundred thousand dollars in value to and including two hundred fifty thousand dollars, (B) eleven per cent on the amount in excess of two hundred fifty thousand dollars in value to and including four hundred thousand dollars, (C) twelve per cent on the amount in excess of four hundred thousand dollars in value to and including six hundred thousand dollars, (D) thirteen per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (E) fourteen per cent on the amount in excess of one million dollars in value, (2) if the death of the transferor occurs on or after January 1, 2005, [but prior to January 1, 2006, at the rate of (A) twelve per cent on the amount in excess of four hundred thousand dollars in value to and including six hundred thousand dollars, (B) thirteen per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (C) fourteen per cent on the amount in excess of one million dollars in value, (3) if the death of the transferor occurs on or after January 1, 2006, but prior to January 1, 2007, at the rate of (A) thirteen per cent on the amount in excess of six hundred thousand dollars in value to and including one million dollars, and (B) fourteen per cent on the amount in excess of one million dollars in value, (4) if the death of the transferor occurs on or after January 1, 2007, but prior to January 1, 2008, at the rate of fourteen per cent on the amount in excess of one million five hundred thousand dollars in value, and (5) if the death of the transferor occurs on or after January 1, 2008,] the net taxable estate passing to a class C beneficiary shall not be subject to tax under this chapter.

Sec. 67. Subsection (a) of section 12-642 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to calendar years commencing on or after January 1, 2005):

(a) (1) With respect to calendar years commencing prior to January 1, 2001, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3080	Amount of Taxable Gifts	Rate of Tax
T3081	Not over $ 25,000	1%
T3082	Over $ 25,000	$ 250, plus 2% of the excess
T3083	but not over $ 50,000	over $ 25,000
T3084	Over $ 50,000	$ 750, plus 3% of the excess
T3085	but not over $ 75,000	over $ 50,000
T3086	Over $ 75,000	$ 1,500, plus 4% of the excess
T3087	but not over $ 100,000	over $ 75,000
T3088	Over $ 100,000	$ 2,500, plus 5% of the excess
T3089	but not over $ 200,000	over $ 100,000
T3090	Over $ 200,000	$ 7,500, plus 6% of the excess
T3091		over $ 200,000

(2) With respect to the calendar years commencing January 1, 2001, January 1, 2002, January 1, 2003, and January 1, 2004, [and January 1, 2005,] the tax imposed by section 12-640 for each such calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3092	Amount of Taxable Gifts	Rate of Tax
T3093	Over $ 25,000	$ 250, plus 2% of the excess
T3094	but not over $ 50,000	over $ 25,000
T3095	Over $ 50,000	$ 750, plus 3% of the excess
T3096	but not over $ 75,000	over $ 50,000
T3097	Over $ 75,000	$ 1,500, plus 4% of the excess
T3098	but not over $ 100,000	over $ 75,000
T3099	Over $ 100,000	$ 2,500, plus 5% of the excess
T3100	but not over $ 675,000	over $ 100,000
T3101	Over $ 675,000	$ 31,250, plus 6% of the excess
T3102		over $ 675,000

[(3) With respect to the calendar year commencing January 1, 2006, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3103	Amount of Taxable Gifts	Rate of Tax
T3104	Over $ 50,000	$ 750, plus 3% of the excess
T3105	but not over $ 75,000	over $ 50,000
T3106	Over $ 75,000	$ 1,500, plus 4% of the excess
T3107	but not over $ 100,000	over $ 75,000
T3108	Over $ 100,000	$ 2,500, plus 5% of the excess
T3109	but not over $ 700,000	over $ 100,000
T3110	Over $ 700,000	$ 32,500, plus 6% of the excess
T3111		over $ 700,000

(4) With respect to the calendar year commencing January 1, 2007, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3112	Amount of Taxable Gifts	Rate of Tax
T3113	Over $ 75,000	$ 1,500, plus 4% of the excess
T3114	but not over $ 100,000	over $ 75,000
T3115	Over $ 100,000	$ 2,500, plus 5% of the excess
T3116	but not over $ 700,000	over $ 100,000
T3117	Over $ 700,000	$ 32,500, plus 6% of the excess
T3118		over $ 700,000

(5) With respect to the calendar year commencing January 1, 2008, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3119	Amount of Taxable Gifts	Rate of Tax
T3120	Over $ 100,000	$ 2,500, plus 5% of the excess
T3121	but not over $ 850,000	over $ 100,000
T3122	Over $ 850,000	$ 40,000, plus 6% of the excess
T3123		over $ 850,000

(6) With respect to the calendar year commencing January 1, 2009, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3124	Amount of Taxable Gifts	Rate of Tax
T3125	Over $ 950,000	$ 45,000, plus 6% of the excess
T3126		over $ 950,000

(7) With respect to the calendar year commencing January 1, 2010, and each calendar year thereafter, the tax imposed by section 12-640 for the calendar year shall be at a rate of the taxable gifts made by the donor during the calendar year set forth in the following schedule:

T3127	Amount of Taxable Gifts	Rate of Tax
T3128	Over $ 1,000,000	$ 47,500, plus 6% of the excess
T3129		over $ 1,000,000] (3) With respect to Connecticut taxable gifts, as defined in section 12-643, as amended by this act, made by a donor during a calendar year commencing on or after January 1, 2005, including the aggregate amount of all Connecticut taxable gifts made by the donor during all calendar years commencing on or after January 1, 2005, the tax imposed by section 12-640 for the calendar year shall be at the rate set forth in the following schedule, with a credit allowed against such tax for any tax previously paid to this state pursuant to this subdivision: T3130 Amount of Taxable Gifts Rate of Tax T3131 Not over $2,000,000 None T3132 Over $2,000,000 5.085% of the excess T3133 but not over $2,100,000 over $0 T3134 Over $2,100,000 $106,800 plus 8% of the excess T3135 but not over $2,600,000 over $2,100,000 T3136 Over $2,600,000 $146,800 plus 8.8% of the excess T3137 but not over $3,100,000 over $2,600,000 T3138 Over $3,100,000 $190,800 plus 9.6% of the excess T3139 but not over $3,600,000 over $3,100,000 T3140 Over $3,600,000 $238,800 plus 10.4% of the excess T3141 but not over $4,100,000 over $3,600,000 T3142 Over $4,100,000 $290,800 plus 11.2% of the excess T3143 but not over $5,100,000 over $4,100,000 T3144 Over $5,100,000 $402,800 plus 12% of the excess T3145 but not over $6,100,000 over $5,100,000 T3146 Over $6,100,000 $522,800 plus 12.8% of the excess T3147 but not over $7,100,000 over $6,100,000 T3148 Over $7,100,000 $650,800 plus 13.6% of the excess T3149 but not over $8,100,000 over $7,100,000 T3150 Over $8,100,000 $786,800 plus 14.4% of the excess T3151 but not over $9,100,000 over $8,100,000 T3152 Over $9,100,000 $930,800 plus 15.2% of the excess T3153 but not over $10,100,000 over $9,100,000 T3154 Over $10,100,000 $1,082,800 plus 16% of the excess T3155   over $10,100,000 Sec. 68. Section 12-643 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to calendar years commencing on or after January 1, 2005): (a) The term "taxable gifts" means the transfers by gift which are included in taxable gifts for federal gift tax purposes under Section 2503 and Sections 2511 to 2514, inclusive, and Sections 2516 to 2519, inclusive, of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, less the deductions allowed in Sections 2522 to 2524, inclusive, of said Internal Revenue Code, except in the event of repeal of the federal gift tax, than 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. (b) In the administration of the tax under this chapter, the Commissioner of Revenue Services shall apply the provisions of Sections 2701 to 2704, inclusive, of said Internal Revenue Code. The words "secretary or his delegate" as used in the aforementioned sections of the Internal Revenue Code means the Commissioner of Revenue Services. Sec. 69. Section 12-391 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to estates of decedents who die on or after January 1, 2005): (a) [A] With respect to estates of decedents who die prior to 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 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) [A] With respect to the estates of decedents who die prior to 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 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 subsections (a) and (b) of this section, "gross estate" means the gross estate, for federal estate tax purposes. ] (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, as amended by this act, 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, as amended by this act, 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, as amended by this act, 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 chapter 217, 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, as amended by this act, 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 Rate of Tax   Taxable Estate     Not over $2,000,000 None   Over $2,000,000 5.085% of the excess   but not over $2,100,000 over $0   Over $2,100,000 $106,800 plus 8% of the excess   but not over $2,600,000 over $2,100,000   Over $2,600,000 $146,800 plus 8.8% of the excess   but not over $3,100,000 over $2,600,000   Over $3,100,000 $190,800 plus 9.6% of the excess   but not over $3,600,000 over $3,100,000   Over $3,600,000 $238,800 plus 10.4% of the excess   but not over $4,100,000 over $3,600,000   Over $4,100,000 $290,800 plus 11.2% of the excess   but not over $5,100,000 over $4,100,000   Over $5,100,000 $402,800 plus 12% of the excess   but not over $6,100,000 over $5,100,000   Over $6,100,000 $522,800 plus 12.8% of the excess   but not over $7,100,000 over $6,100,000   Over $7,100,000 $650,800 plus 13.6% of the excess   but not over $8,100,000 over $7,100,000   Over $8,100,000 $786,800 plus 14.4% of the excess   but not over $9,100,000 over $8,100,000   Over $9,100,000 $930,800 plus 15.2% of the excess   but not over $10,100,000 over $9,100,000   Over $10,100,000 $1,082,800 plus 16% of the excess     over $10,100,000 [(d)] (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.   (c) The term "Connecticut taxable gifts" means taxable gifts made during a calendar year commencing on or after January 1, 2005, that are, (1) for residents of this state, taxable gifts, wherever located, but excepting gifts of real estate or tangible personal property located outside this state, and (2) for nonresidents of this state, gifts of real estate or tangible personal property located within this state. Sec. 69. Section 12-391 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage and applicable to estates of decedents who die on or after January 1, 2005): (a) [A] With respect to estates of decedents who die prior to 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 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) [A] With respect to the estates of decedents who die prior to 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 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 subsections (a) and (b) of this section, "gross estate" means the gross estate, for federal estate tax purposes. ] (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, as amended by this act, 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, as amended by this act, 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, as amended by this act, 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 chapter 217, 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, as amended by this act, 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: T3156 Amount of Connecticut Rate of Tax T3157 Taxable Estate   T3158 Not over $2,000,000 None T3159 Over $2,000,000 5.085% of the excess T3160 but not over $2,100,000 over $0 T3161 Over $2,100,000 $106,800 plus 8% of the excess T3162 but not over $2,600,000 over $2,100,000 T3163 Over $2,600,000 $146,800 plus 8.8% of the excess T3164 but not over $3,100,000 over $2,600,000 T3165 Over $3,100,000 $190,800 plus 9.6% of the excess T3166 but not over $3,600,000 over $3,100,000 T3167 Over $3,600,000 $238,800 plus 10.4% of the excess T3168 but not over $4,100,000 over $3,600,000 T3169 Over $4,100,000 $290,800 plus 11.2% of the excess T3170 but not over $5,100,000 over $4,100,000 T3171 Over $5,100,000 $402,800 plus 12% of the excess T3172 but not over $6,100,000 over $5,100,000 T3173 Over $6,100,000 $522,800 plus 12.8% of the excess T3174 but not over $7,100,000 over $6,100,000 T3175 Over $7,100,000 $650,800 plus 13.6% of the excess T3176 but not over $8,100,000 over $7,100,000 T3177 Over $8,100,000 $786,800 plus 14.4% of the excess T3178 but not over $9,100,000 over $8,100,000 T3179 Over $9,100,000 $930,800 plus 15.2% of the excess T3180 but not over $10,100,000 over $9,100,000 T3181 Over $10,100,000 $1,082,800 plus 16% of the excess T3182   over $10,100,000 [(d)] (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. Sec. 70. Subdivision (3) of subsection (b) of section 12-392 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage): (3) (A) A tax return shall be filed, in the case of every decedent who died prior to January 1, 2005, and at the time of death was [(A)] (i) a resident of this state, or [(B)] (ii) a nonresident of this state whose gross estate includes any real property situated in this state or tangible personal property having an actual situs in this state, whenever the personal representative of the estate is required by the laws of the United States to file a federal estate tax return. (B) A tax return shall be filed, in the case of every decedent who dies on or after January 1, 2005, and at the time of death was (i) a resident of this state, or (ii) a nonresident of this state whose gross estate includes any real property situated in this state or tangible personal property having an actual situs in this state. (C) The duly authorized executor or administrator shall file the return. If there is more than one executor or administrator, the return shall be made jointly by all. If there is no executor or administrator appointed, qualified and acting, each person in actual or constructive possession of any property of the decedent is constituted an executor for purposes of the tax and shall make and file a return. If in any case the executor is unable to make a complete return as to any part of the gross estate, the executor shall provide all the information available to him with respect to such property, including a full description, and the name of every person holding a legal or beneficial interest in the property. If the executor is unable to make a return as to any property, each person holding a legal or equitable interest in such property shall, upon notice from the commissioner, make a return as to that part of the gross estate. -- 12--00--0392---K;(b);(b);(3);(3);; --> *    *    * Sec. 93. Section 12-396 of the general statutes is repealed. (Effective from passage)" This act shall take effect as follows and shall amend the following sections: Sec. 66 from passage and applicable to estates of decedents dying after January 1, 2005 12-344(d) and (e) Sec. 67 from passage and applicable to calendar years commencing on or after January 1, 2005 12-642(a) Sec. 68 from passage and applicable to calendar years commencing on or after January 1, 2005 12-643 Sec. 69 from passage and applicable to estates of decedents who die on or after January 1, 2005 12-391 Sec. 70 from passage 12-392(b)(3)