Sec. 12-195f. Validity of liens.
Sec. 12-195f. Validity of liens. Even though notice of a lien has been filed by a
municipality, such lien shall not be valid:
(1) With respect to a security interest which came into existence after tax lien filing
but which (A) is in qualified property covered by the terms of a written agreement
entered into before tax lien filing and constituting (i) a commercial transactions financing
agreement, or (ii) an obligatory disbursement agreement, and (B) is protected under the
laws of the state of Connecticut against a judgment lien arising, as of the time of tax
lien filing, out of an unsecured obligation. (C) For purposes of this section, (i) the term
"commercial transactions financing agreement" means an agreement, entered into by a
person in the course of such person's trade or business, to make loans to the taxpayer,
part or all of the security for repayment of said loans being inventory acquired by the
taxpayer in the ordinary course of such taxpayer's trade or business, but such an
agreement shall be treated as coming within the term only to the extent that such loan
is made before the forty-sixth day after the date of tax lien filing or before the lender
had actual notice or knowledge of such tax lien filing, whichever is earlier. (ii) The term
"qualified property", when used with respect to a commercial transactions financing
agreement, means inventory acquired by the taxpayer before the forty-sixth day after
the date of tax lien filing. (iii) The term "obligatory disbursement agreement" means
an agreement, entered into by a person in the course of such person's trade or business,
to make disbursements, but such an agreement shall be treated as coming within the
term only to the extent of disbursements which are required to be made by reason of
the intervention of the rights of a person other than the taxpayer. (iv) The term "qualified
property", when used with respect to an obligatory disbursement agreement, means
property subject to the lien imposed by sections 12-195a to 12-195g, inclusive, at the
time of tax lien filing and, to the extent that the acquisition is directly traceable to the
disbursements referred to in subparagraph (iii), property acquired by the taxpayer after
tax lien filing. (v) The term "inventory" when used in this section means inventory as
defined in subdivision (48) of subsection (a) of section 42a-9-102;
(2) With respect to a security interest which came into existence after tax lien filing
by reason of disbursements made before the forty-sixth day after the date of tax lien
filing, or before the person making such disbursements had actual notice or knowledge
of tax lien filing, whichever is earlier, but only if such security interest (A) is in property
(i) subject, at the time of tax lien filing, to the lien imposed by sections 12-195a to 12-195g, inclusive, and (ii) covered by the terms of a written agreement entered into before
tax lien filing, and (B) is protected under the laws of the state of Connecticut against a
judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation;
(3) With respect to tangible personal property purchased at retail, as against a purchaser in the ordinary course of the seller's trade or business, unless at the time of such
purchase such purchaser intends such purchase to, or knows such purchase will, hinder,
evade, or defeat the collection of any tax under said sections;
(4) With respect to a purchase money security interest, if said purchase money
security interest would be prior to a conflicting security interest in the same collateral
under sections 42a-9-322 and 42a-9-324.
(1971, P.A. 722, S. 6; P.A. 96-180, S. 24, 166; P.A. 01-132, S. 161.)
History: P.A. 96-180 made technical relettering and renumbering changes to conform Subdivs., Subparas. and clauses
with customary statutory usage, effective June 3, 1996; P.A. 01-132 amended Subdiv. (1) to replace Sec. 42a-9-109(4)
with Sec. 42a-9-102(a)(48) as the statutory reference for the definition of "inventory" and make technical changes for
purposes of gender neutrality and amended Subdiv. (4) to replace reference to Sec. 42a-9-312 with Secs. 42a-9-322 and
42a-9-324.