(1) If any person likely to be liable for taxes imposed pursuant to the provisions of this article transfers all or part of his property to another person controlled, directly or indirectly, by the transferor before or after the transfer, the executive director may disallow to the transferee any exemption from tax otherwise authorized pursuant to this article unless such transferee establishes by a clear preponderance of the evidence that the securing of such an exemption was not a major purpose of such transfer.
(2) As used in this section, control means:
(a) The ownership, directly or indirectly, of more than fifty percent of the voting stock of the transferee corporation; or
(b) With respect to a transferee other than a corporation, that the transferor owns, during any part of the transferee's taxable year, a greater economic interest than any other owner of the transferee.
Source: L. 77: Entire article added, p. 1851, � 1, effective January 1, 1978.
39-29-114. Component members of a controlled group treated as one taxpayer. (1) For the purposes of this article, persons who are members of the same controlled group of corporations shall be treated as one taxpayer.
(2) If fifty percent or more of the beneficial interest in two or more corporations, trusts, or estates is owned by the same or related persons (taking into account only persons who own at least five percent of such beneficial interest), the exemptions allowed under this article shall be allocated among all such entities in proportion to their respective quantities of production from the property of such entities.
(3) In the case of individuals who are members of the same family, the exemptions allowed under this article shall be allocated among such individuals in proportion to their respective quantities of production from the property of such individuals. For the purposes of this article, the family of an individual shall be deemed to include only his spouse and children.
(4) For the purposes of this section, the term controlled group of corporations has the meaning given to such term by the Internal Revenue Code of 1986, in section 613A, as of January 1, 1987. The change of the reference in this section from the Internal Revenue Code of 1954 to the Internal Revenue Code of 1986 shall not affect any act done or any right accrued or accruing before or after such change, but all rights and liabilities shall continue and may be enforced in the same manner as if such references had not been changed.
Source: L. 77: Entire article added, p. 1851, � 1, effective January 1, 1978. L. 88: (4) amended, p. 1327, � 6, effective April 6.