§ 39-29-113 — Exemption prohibited - when

(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.

Legislative History

Source: L. 77: Entire article added, p. 1851, � 1, effective January 1, 1978.