Informational Publication 2018(2)
Building
Contractors’
Guide to
Sales and Use
Taxes
State of Connecticut
Department of Revenue Services
Issued: 12/19/2018 Replaces: IP 2006(35)
2 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
This document is not intended to be used as a legal
ruling, but as a general guide for the proper treatment
of sales and use taxes as they relate to the construction
industry.
Not every potential tax situation is covered in this
guide. If you have questions about the taxability of
goods or services you provide, contact the Department
of Revenue Services (DRS).
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 3
Table of ConTenTs
The Basics
15
Contractor’s Labor Subject to Tax .............................. 15
Contractor’s Labor Not Subject to Tax ....................... 15
15
Tax Held in Trust ......................................................... 16
16
16
16
Contracts With Exempt Organizations ........................ 16
Contracts With Governmental Agencies ..................... 17
Federally Recognized Indian Tribes ........................... 17
Connecticut Innovations, Inc. (CII) ............................ 17
Low and Moderate Income Housing ........................... 17
Waste Treatment Facilities .......................................... 18
Air Pollution Control Facilities ................................... 18
Out-of-State Contracts ................................................ 19
.................................. 19
Renovation Construction Projects ............................... 19
New Construction Projects .......................................... 19
Construction Projects That Involve Renovation
and New Construction ............................................. 19
Recurring Taxable Services Provided to Real Property
Purchased by Direct Payment Permit Holders ........ 20
20
20
21
21
Subcontractor ........................................................... 21
to Subcontractor ....................................................... 22
Temporary Personnel Agency Services ....................... 22
23
23
Bond Requirements of Nonresident Contractors ........ 24
24
I 8
8
8
(TSC) 8
9
9
Lump Sum or Fixed Fee Contract ................................. 9
Cost Plus Contract ......................................................... 9
Time and Material Contract With an Upset or
Guaranteed Price That May Not Be Exceeded ........ 10
10
10
10
Temporary Sheds, Buildings, and Trailers .................. 10
10
Installation of Systems ................................................ 11
Repair or Maintenance of Tangible
Personal Property ..................................................... 11
Warranty Contracts ...................................................... 11
12
Service Contract .......................................................... 12
Equipment Rental ........................................................ 12
12
New Construction .................................................... 12
Owner-Occupied Residential Property .................... 13
Commercial Property ............................................... 13
Industrial Property ................................................... 13
Income-Producing Property ..................................... 13
Public Right-of way ................................................. 13
13
Services Taxable to All Real Property ........................ 13
Services Taxable to Certain Real Property .................. 13
Site Improvements ...................................................... 14
14
14
14
4 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
(See Central Air Conditioning
and Ventilation Systems)
............................................................... 26
....................... 26
(See Kitchens and Telephone,
Audio-Visual, and Computer Cable or Wiring)
.................................................. 27
.................................................... 27
(See Telephone, Audio-Visual, and Computer
Cable or Wiring)
(See also Standard Units of Equipment) .......... 28
(See also Standard Units of Equipment) ...... 28
.................................................... 29
............................................................................ 29
(See Bathrooms, Kitchens, and Standard
Units of Equipment)
........................................................................ 29
(See Janitorial Services)
(See Floor Coverings)
.............................................. 30
............................................... 30
........................................................................ 31
.......................................................... 31
(See also Heating Systems and Ventilation Systems) ........ 31
(See Telephone, Audio-Visual, and Computer
Cable or Wiring)
............................................................................... 32
....................................................................... 32
.......................................................................... 33
(
For asphalt, tar, macadam, and poured concrete areas, see
Paving
)
(
For brick, stone areas, or concrete pavers, see Landscaping
and Horticulture Services
)
(See Interior Sheet Metal and Ventilation Systems)
......................................................................... 33
(
Complete wiring or rewiring of structures or the upgrading
of the electrical service of a structure
)
........................................................... 33
(See also Inclined Stairway Chairlifts) ............................ 34
................................................................. 35
....................................................... 35
................................................. 35
.................... 35
(See also Gutters) .............. 36
................................................................. 36
(
See also Landscaping and Horticulture Services,
Silt Fencing and Underground Pet Barrier Systems
)........... 36
(Cleaning, deodorizing, and removal
of water or debris) ............................................................ 37
........................................................................ 37
.............................................................. 37
............................................................ 38
(See Heating Systems)
.................................................................. 38
.................................................... 39
.......................................................... 39
(See Sheds and Gazebos)
(See also Exterior Sheet Metal Work
and Maintenance Services to Real Property) .................... 40
(See Standard Units of Equipment)
(See Environmental Services)
(See also Clean Rooms/HVAC Systems) ........................... 40
............. 41
......................................... 41
(See Maintenance Services to Real
Property and Painting, Staining, Varnishing, and
Waterproong)
.......................................... 43
(See Structural Inspections)
........................................................ 44
(Duct work) ................................... 44
(See also Maintenance Services to Real Property) ........... 44
.......................................................................... 45
................................ 45
The Details
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 5
............................................... 46
....................... 46
........................................................ 47
....................................................................... 47
....................... 48
.................................................................. 48
(See Brickwork/Stonework)
.......................................................... 49
........................................................ 49
........................................................... 49
..................................................... 49
............................................................. 49
(See Landscaping and Horticulture Services)
(See also Maintenance Services to Real Property) .......... 50
(See Exterminating)
......................................................................... 51
(See Maintenance Services to Real Property)
(See Standard Units of Equipment)
....... 51
.............................................................. 51
(See Landscaping and Horticulture Services)
............................................................................ 52
............................................................. 52
................................................................... 53
(See Hot Tubs, Spas, and Saunas)
.............................. 53
(See also Standard Units of Equipment) ........................... 54
.................................................. 54
......................................................... 54
(See Interior Sheet Metal or Exterior Sheet Metal Work)
............................................................................... 55
................................................................................ 55
........................... 55
..................................................................... 56
(See Maintenance Services to Real Property)
(See Hot Tubs, Spas, and Saunas)
(See Landscaping and Horticulture Services for
exterior sprinkler systems) ................................................ 56
(See Painting, Staining, Varnishing,
and Waterproong)
....................................... 56
(See Standard Units of Equipment)
(See Brickwork/Stonework)
..................................................... 57
................................................................... 57
(See also Hot Tubs, Spas, and Saunas) ............................. 58
(See also Home Entertainment/Home Theater Systems) ... 59
(See also Environmental
Services) ............................................................................ 60
...................................................... 60
(
See also Fencing
) .. 60
......................................... 60
(See Painting, Staining, Varnishing, and Waterproong)
(See also Clean Rooms/HVAC Systems) .......................... 61
.................................................................. 61
(For exterior walls, see Landscaping and
Horticulture Services) ....................................................... 62
(See also
Roof Warranties) ............................................................... 62
................................................................. 62
(See Painting, Staining, Varnishing, and Waterproong)
........................................................................... 63
............................................................ 63
.......................................................................... 64
........................................................... 65
....................................................... 65
(See Telephone, Audio-Visual,
and Computer Cable or Wiring)
............................................................. 67
.... 95
................................................................... 98
........................................ 104
6 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 7
The basiCs
8 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Connecticut building contractors and out-of-state contractors
performing services in Connecticut are generally required
to collect sales tax on their sales and pay sales or use tax on
their purchases. This guide provides more information about
(1) when a contractor needs to pay tax on their purchases
of services and materials, and (2) when a contractor needs
to collect sales tax from their purchaser on their sales of
contracting services and related materials.
Contractors are relatively unique in that they are both
the consumer of materials and retailers of their services.
Therefore, contractors must generally:
1. Pay sales and use tax on materials, supplies, and
equipment used in their construction contracts;
2. Charge and remit sales tax on their taxable services and
certain sales of related materials.
Generally, services to existing commercial, industrial, and
income-producing property are taxable. Some services to
residential property are also taxable.
All contractors must register with the Department of
Revenue Services (DRS) if they are conducting business
in Connecticut. Taxes for which they may be liable include,
but are not limited to, sales and use taxes, withholding
tax, corporation business tax, and business entity tax. See
, Getting Started in
Business.
OBTAINING A SALES AND USE TAX
PERMIT
All contractors, including subcontractors, must obtain a
Connecticut Sales and Use Tax Permit from DRS prior to
providing any services in Connecticut, even if the services
provided are not taxable or if the contract is with a tax-
exempt entity.
To register a business, visit the Department of Revenue
Services at . Use the
(TSC) to complete , Business Taxes
Registration Application online. When registering online
an electronic direct payment from a savings or checking
account must be made for the Sales and Use Tax Permit
fee. Credit or debit card payments are not accepted for
registration fees. A business may also apply in person at
In addition to obtaining a Sales and Use Tax Permit, a
nonresident contractor is required to meet requirements
imposed on such contractors. See Page 23 for more
information on nonresident contractor bond requirements.
When purchasing an existing business, the new business
may not use the Sales and Use Tax Permit issued to the
previous owner. A new Sales and Use Tax Permit must
be obtained. See ,
Successor Liability and Request for Tax Clearance.
KEEPING GOOD RECORDS
Every contractor must keep accurate and complete records
of all transactions subject to tax and all purchases made
by the business for resale, if applicable. These records
returns and must be available if the business is audited.
These records must be kept for at least six years. Contractors
making purchases on resale must maintain records that show
how sales or use tax was later paid on those purchases.
Other records the business must keep include:
• Records of sales (sales receipts, cash register tapes,
guest checks, invoices, etc.);
• Purchase records (invoices, cash disbursement journal);
• State and federal tax returns including schedules and
worksheets;
• Documents that show price changes;
• General ledger;
• Sales, purchases, accounts receivable, and accounts
payable journals;
• Resale and exemption certificates and records of
See Conn. Agencies Regs. § 12-2-12 for more recordkeeping
and record retention requirements.
FILING TIMELY RETURNS THROUGH THE
TAXPAYER SERVICE CENTER (TSC)
, Connecticut Sales and Use Tax Return must
no business activity was conducted for a particular period.
Form OS-114 is the last day of the month following the end of
tax is due, additional charges for penalty and interest will apply.
INTRODUCTION
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 9
electronically and make a tax payment by electronic funds
transfer. See , Filing
and Paying Connecticut Taxes Electronically.
The (TSC) is a free service
on the DRS website at that enables
through the TSC. Upon completing the return, the taxpayer
will automatically be directed to the payment page where
checking or savings account information may be entered.
will be received that can be printed for the taxpayer’s
records. Processed or scheduled payments may be viewed
from the main menu of the TSC.
FILING AN AMENDED RETURN
Check the box indicating that this is an amended return
for the reporting period.
An amended return claiming a refund of taxes already paid
the return. If tax was incorrectly collected from a customer,
the business must prove the sale was not subject to sales and
use taxes, or sales tax was otherwise paid in error, and prove
the tax was returned to the customer (such as a canceled
check or receipted bill). Alternatively, the business may
provide DRS with copies of letters or memoranda issued
to its purchasers in which it promises either to refund the
tax to them, or for current, active customers of the retailer,
to credit the refund amounts against amounts due from the
purchasers.
If the business has not refunded the tax to its purchasers
before DRS issues the refund to the business, then within
120 days after DRS issues the refund, the business must
prove it has refunded or credited the refund amounts to its
purchasers. A business must immediately return to DRS
any amounts not refunded or credited to the business’s
purchasers within 120 days after DRS issues a refund.
Businesses should keep their records and any other
documentation to justify any adjustments for three years.
For information about DRS policies on issuing refunds of
sales and use taxes, see , Sales and
Use Tax Refund Policy.
SALES TAX REQUIREMENTS FOR
DIFFERENT TYPES OF CONSTRUCTION
CONTRACTS
There are three major types of construction contracts. This
by the contractor on purchases made for these contracts,
and how sales tax should be collected by the contractor, if
applicable.
Lump Sum or Fixed Fee Contract
This type of contract provides for a single price for the
total work to be performed on a construction project. Such
contracts are generally not subject to adjustment because
of higher than anticipated costs incurred by the contractor.
The contractor agrees to install a new roof on a
building for $10,000. The contractor cannot charge extra even
if more material is used or more time is spent than expected.
Contractors pay sales or use tax on their purchase of
materials for completion of the contract. Contractors must
charge sales tax to the purchaser on the stated contract
price, if the contractor’s service is subject to tax and the
purchaser is not exempt. The contract should state whether
the total contract price is inclusive or exclusive of sales tax,
if applicable.
Cost-Plus Contract
This type of contract provides for reimbursement of
stated dollar limitation.
The contractor agrees to install a new roof on a
building. The contract states the property owner will reimburse
the contractor for the cost of materials used and labor costs,
a maximum number of labor hours.
Contractors pay sales or use tax on their purchase of
materials for completion of the contract. Contractors
must charge sales tax from the purchaser on the total
consideration paid, if the contractor’s service is subject to
tax and the purchaser is not otherwise exempt.
10 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
CONTRACTORS COLLECTING SALES TAX FROM PURCHASERS
Time and Material Contract With an Upset or
Guaranteed Price That May Not Be Exceeded
The contractor is paid on the basis of direct labor hours at a
over which the contractor cannot charge.
A time and material contract with an upset or guaranteed
price that may not be exceeded provides for:
•
includes wages, overhead, general and administrative
• Materials at cost, including, if appropriate, material
handling costs as part of material costs;
• A ceiling price the contractor exceeds at its own risk.
The contractor agrees to install a new roof on a
building. The contractor will be paid at the rate of $75 per hour
plus the cost of materials, with the entire cost to the property
owner for time and materials not to exceed $10,000.
Contractors pay sales or use tax on their purchase of
materials for completion of the contract. Contractors must
charge sales tax to the purchaser on the total consideration
paid, if the contractor’s service is subject to tax and the
purchaser is not exempt.
In order to determine whether a contractor is required
to collect sales tax on a sale made to a purchaser, three
questions must be answered: (1) what type of service is
being performed, (2) what type of property is receiving
the service, (3) whether the purchaser is exempt from
sales tax.
TANGIBLE PERSONAL PROPERTY OR
REAL PROPERTY
property or real property. Sales of tangible personal property
of services to commercial, industrial, or income-producing
applies. Sales of certain services are subject to tax for all
types of real property.
TANGIBLE PERSONAL PROPERTY
The term tangible personal property refers to goods that
are not part of real property. Examples of tangible personal
property are furniture, curtains, and certain appliances.
The sale of tangible personal property is taxable. However,
separately stated charges to install tangible personal
property are not taxable, provided that such installation
is not itself a service to existing commercial, industrial or
income-producing real property.
Conn. Gen. Stat. § 12-407(a)(8)(B)
and (9)(B)); Conn. Agencies Regs. § 12-426-18(e).
Temporary Sheds, Buildings, and Trailers
placed onto sites for use during construction projects are
generally considered to be and remain tangible personal
property. Prefabricated gazebos and storage sheds are
generally considered to be and remain tangible personal
property.
INSTALLATION VERSUS REPAIR
OR MAINTENANCE OF TANGIBLE
PERSONAL PROPERTY
This section covers services performed on systems that are
integrated into real property, which contain core units that
enable them to function. For example:
alarm systems
central vacuuming units
refrigeration units
modular lighting units
plumbing systems, which contain:
pumps
tanks
water heaters
heating and cooling systems, which contain:
central air conditioning units
furnaces (boilers and burners)
These services may include installation of the units or
systems into the real property or may include repair or
maintenance of these units, including their electrical or
electronic devices.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 11
Most contractors provide installation, repair and
which type of job is being done.
Installation of Systems
The installation of these systems is considered a service to
real property. Contractors are the consumers of the materials
used when installing these systems and, therefore, must pay
tax on their purchases.
Contractors do not collect tax on their services when
installing a system in:
• New construction
• Owner-occupied residential property
Contractors must collect tax on their services when
installing a system in:
• Existing commercial real property
• Existing industrial real property
• Existing income-producing real property
Repair or Maintenance of Tangible Personal
Property
Repairing or maintaining units, or their electrical or
electronic parts, is a taxable service to tangible personal
property. Contractors providing repair or maintenance
services must separately state the charge for integral parts
and the charge for maintenance or repair services on the
bill to the customer. Any fees, such as service call charges,
pickup or delivery charges, are taxable as charges for repair
or maintenance services to tangible personal property. The
total bill is taxable.
Maintenance or repair service providers are the consumers
of supplies used in performing their services. Therefore,
sales of tangible personal property, other than integral parts,
to a contractor who uses the property in repairing tangible
personal property are taxable retail sales to the contractor.
The maintenance or repair service provider may purchase
integral part
means a part, such as a circuit board, heating element,
control panel, or gear that retains its separate identity even
after being incorporated into repaired equipment. The term
integral part does not include materials such as lubricants,
coolant, stain, paint, varnish, glue, solder and wire that
do not retain their separate identity after being used to
repair tangible personal property, but are consumed by the
contractor.
A contractor that both installs and repairs or maintains these
units or systems may purchase inventory items used in both
installation and repairs on a resale basis. For example, if
the contractor purchases piping, the purchase may be made
in the installation of a water system and the repair of an
existing water system.
• If the item is used in an installation, the contractor
self-assesses use tax on the contractor’s purchase price.
• If the item is used in a repair, the contractor collects
sales tax from its customer on the item.
purchase items that can only be used in an installation (for
example: furnaces, central air conditioning, or water heater
units).
Conn. Gen. Stat. § 12-407(a)(37)
(Q) and (CC)
Warranty Contracts
A warranty contract is a contract that provides for repair
services to be performed on an item of tangible personal
property only in the event of a future malfunctioning.
The sale of a warranty contract to service any item of
tangible personal property is taxable. The sales tax applies
to the charge for a warranty contract regardless of whether
it is separately stated from the charge for the sale of the
item or the warranty contract is purchased in a separate
transaction from the sale of the item.
When repair services
are performed under a warranty contract at no additional
charge to the customer, the services are not taxable because
the tax is considered to have been paid on the services
when the warranty contract was purchased. However, any
additional amount a warrantor charges a customer that is not
covered under the warranty contract, such as a charge for a
deductible, is subject to tax. The warrantor may purchase
integral parts and repair labor used to service an item of
tangible personal property under a warranty contract on
resale from suppliers or third party repairers.
See the definition of integral part on this page and
Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair or
maintenance services to tangible personal property and
contracts of maintenance, repair, or warranty.
12 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
EQUIPMENT RENTAL OR SERVICE
CONTRACT
The rental of equipment is a taxable transaction, whereas
only certain services are taxable. However, sometimes it is
equipment and a contract for services.
The terms of the contract, not the billing method, determine
if the transaction is for equipment rental or for a service.
Service Contract
A contract is for service if the equipment owner:
•
• Maintains complete control over the equipment;
• Retains discretion over how and when to perform the job.
A bulldozer
service receives a job order to tear up an existing parking lot at
a shopping center. It dispatches a bulldozer and an operator to
handle the job. When the work is completed, it bills as follows:
Bulldozer 3 hrs @ $100 $ 300.00
Operator 3 hrs @ $40 $ 120.00
Subtotal $ 420.00
Sales Tax ($420 x 6.35%) $ 26.67
$ 446.67
The entire charge is subject to tax because the renovation of
commercial income-producing property is a taxable service.
When performing a taxable service the entire charge is taxable
whether or not the charge for the operator is separately stated.
A crane
service receives a job order to unload two freight cars of lumber.
The crane service dispatches a crane and an operator to handle
the job. When the work is completed, it bills as follows:
Mobile Crane 3 hrs @ $100
$ 300.00
Operator 3 hrs @ $40 $ 120.00
$ 420.00
This again is a service contract, not the rental of equipment. The
control of the actual operation. Since the unloading of freight
is not a taxable service, the charge is not subject to tax.
Equipment Rental
When the contractor is merely supplying equipment, with or
without operators, to a certain site and the customer controls
how and when to perform the contract, the contract is for
the rental of equipment.
A
contractor receives a request to supply a bulldozer and a
truck without an operator. When the equipment is released the
contractor bills as follows:
1 bulldozer 20 hrs @ $100
$ 2,000.00
1 truck 20 hrs @ $50 $ 1,000.00
Subtotal $ 3,000.00
Tax ($3000 x 6.35%) $ 190.50
$ 3,190.50
This is a rental of equipment and the entire charge is subject to
6.35% tax.
A crane
service receives a job order to provide a crane to unload two
freight cars of lumber. The crane service dispatches a crane and
an operator to handle the job. When the crane and the operator
arrive at the job site, the freight company instructs the operator
on how and when to unload the lumber. The freight company
oversees the crane operator’s work and makes adjustments as
necessary. When the work is completed, it bills as follows:
Mobile Crane 3 hrs @ $100 $ 300.00
Operator 3 hrs @ $40 $ 120.00
Subtotal $ 420.00
Tax ($300 x 6.35%) $ 19.05
$ 439.05
This is a rental of equipment and the charge for equipment is
subject to the 6.35% tax. However, the charge for the operator
is not taxable provided the lessor supplies the operator for the
leased property and the amount charged for the compensation
of the operator is reasonable and is separately stated on the
invoice.
Conn. Agencies Regs. § 12-426-25
TYPES OF REAL PROPERTY
Real property is land, buildings, and materials permanently
of real property:
Types of new construction are:
• The construction of a new building;
• The construction of a new addition that expands the
cubic footage of an existing building;
• The replacement of the entire internal structure of
a building. This includes removing and replacing
and electrical systems. Everything in the interior of a
the rafters of the roof must be removed;
A clothing store is a tenant of one space in a strip
completely gutted its space, but the other spaces in the strip
mall were left untouched. As the strip mall is only one building
and only a portion of the building was gutted, the work done
on the tenant’s space does not qualify as new construction.
A manufacturer contracts to have 90% of the
square footage of its recently purchased facility gutted,
electrical and mechanical systems. The manufacturer plans to
have both manufacturing and R&D operations take place in the
the section to be used for manufacturing than the section to be
used for R&D, the manufacturer is leaving the internal walls,
operations will take place. This contract does not qualify as new
construction because 10% of the building will not be gutted.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 13
• Site improvements to real property that put the property
to a new use (see Site Improvements on Page 14);
•
structure. For information about the special rules that
apply to this type of construction, see ,
Certified Rehabilitation Certificate for Certified
Historic Structures;
•
building, if there has been no previous use of this space,
(storage is considered a use).
Occupancy (C.O.) is issued.
A , Services Certicate for New Construction,
is used to establish the percentage of construction services
that is attributable to new construction.
• Is used exclusively for residential purposes;
• Consists of one to three dwelling units (up to a three
family house);
• The owner resides or will reside at the property upon
completion of the work.
Property where the buying, selling,
or leasing of goods or services usually takes place. Examples
stations.
Property where manufacturing or
fabricating activities take place. An example is a factory. The
grounds surrounding the factory, warehouse, and shipping
dock are all part of the industrial property.
Property held for or used
in the production of income. Examples include land used
for agricultural production and rental property such as
an apartment building or nonowner-occupied residential
property.
Property such as a state or municipal
street and adjacent area. This property is not considered
commercial, industrial, or income-producing property. Services
to mains, lines, poles, pipes, and other facilities located along,
above, or under a public right-of-way are generally not taxable.
Conn. Gen. Stat. § 12-407(a)(37)(I)
and Conn. Agencies Regs. § 12-407(2)(i)(I)-1
TYPES OF SERVICES
Services to existing industrial, commercial, and income-
producing property are generally taxable, unless the
purchaser is exempt from sales and use tax.
Services Taxable to All Real Property
Some services are taxable in all cases, whether performed
on new construction, owner-occupied residential property,
existing commercial property, existing industrial property,
or existing income-producing property. These services
include, but are not limited to:
Carpet cleaning Maintenance
Exterminating Snow plowing and removal
House washing Swimming pool cleaning
Janitorial Swimming pool maintenance
Landscaping Window cleaning
Locksmith services
Additional information about these and other services can
be found in the Details section of this guide beginning on
Page 25.
Conn. Gen. Stat. § 12-407(a)(37)(T),
(V), (W), (X), (Y), (Z), and (AA)
Services Taxable to Certain Real Property
Services are generally taxable to existing commercial,
industrial, or income-producing property, even if they are
not taxable when performed on owner-occupied residential
property or new construction. These services include, but
are not limited to:
Air conditioning Paving
Carpentry Plastering
Carpeting Plumbing
Construction management Property management
Demolition Refuse removal
Electrical Roong
Elevator or escalator work Sandblasting
Excavating Siding
Exterior sheet metal work Staining
Flooring Structural inspection
Foundation work Ventilation
Heating Wallpapering
Masonry Welding
Painting
Conn. Gen. Stat. § 12-407(a)(37)(I)
14 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Site Improvements
Site improvements are improvements made to real property
other than buildings. Certain site improvements put the
property to a new use and are considered new construction.
The construction of roadways, parking lots, in-ground
swimming pools, tennis courts, and decks put the property
to a new use.
Walkways, driveways, and patios must be made of poured
concrete or asphalt to be considered nontaxable new
construction instead of a taxable landscaping service.
These services can be considered new construction work
whether or not these improvements are in connection with
the construction of a new building.
Other site improvements merely enhance an existing use
of the property and are not considered new construction.
The installation of wells, septic systems, utility lines, storm
water drainage systems, and outdoor lighting systems do
not put the property to a new use. Such services are not new
construction unless the construction of the improvement is
A , Services Certicate for New Construction,
is used to establish the percentage of construction services
that is attributable to site improvements.
AMOUNT SUBJECT TO TAX
Once contractors have determined the type of property and
type of service they are providing, they need to determine
the amount of the bill that is subject to sales tax.
SERVICE CHARGE
A contractor’s service charge, sometimes referred to as
the labor charge, is determined by subtracting the cost
of materials (including tax paid on materials) from the
total contract price. In other words, every cent above the
contractor’s cost of materials physically incorporated into
the real property, plus the tax paid on those materials, is
considered the service charge.
The service charge includes:
• The actual labor charge;
•
•
• Overhead expenses;
• Tool or equipment purchase or rental, including tax
paid on the rental;
• Reimbursed expenses incorporated into the bill
(whether or not the charges are separately stated).
REIMBURSED EXPENSES
Generally, reimbursed expenses associated with a taxable
service are subject to tax even if separately stated on the
invoice. When a business provides a taxable service in
Connecticut and bills the customer for both the service
and any reimbursable expenses used and consumed by the
service provider in providing its services, such as postage,
delivery charges, food, travel, and lodging, the entire bill
is subject to sales tax.
A security company is hired to provide a taxable
guard service in Connecticut and presents the following bill.
Guard services
$ 2,000.00
Travel and meals $ 300.00
$ 2,300.00
The entire bill of $2,300.00 is subject to the 6.35% tax.
A landscaping company performs its taxable
service for a company located in Connecticut and presents
the following bill:
Landscaping services
$ 10,000.00
Travel $ 1,000.00
Meals $ 300.00
Lodging $ 900.00
$ 12,200.00
The entire bill of $12,200 is subject to the 6.35% sales tax
There is an exception to this general rule:
When the seller of services incurs any expense that is for
the reimbursement of the expense is not subject to tax.
Examples are when a building contractor pays for a building
permit for the building owner, town recording fees, and
travel tickets purchased by the service provider for travel
by the service recipient and used by the service recipient.
The distinction between expenses that are used and
consumed by a service provider and expenses that are used
way related to whether the service recipient is contractually
obligated or otherwise required to reimburse the service
provider for the expenses. Instead, as explained above, the
taxability of an item that is the basis for an expense incurred
by a service provider depends on how the item is used.
the general rule is that if a service is taxable, the reimbursed
expenses associated with it are also taxable.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 15
LABOR CHARGE
Contractor's Labor Subject to Tax
A contractor’s labor is subject to tax when the service is to:
• Existing commercial real property;
• Existing industrial real property;
• Existing income-producing real property;
• Any real property if it is one of the services
listed in
Services Taxable to All Real Property on Page 13.
Contractor’s Labor Not Subject to Tax
A contractor’s labor is not subject to tax when the service
is performed on:
• New construction (except for services listed in Services
Taxable to All Real Property);
• Owner-occupied residential property (except for
services listed in Services Taxable to All Real Property);
• Charitable or religious organizations;
• Qualifying governmental agencies or their agents;
• Real property owned by federally recognized Indian
tribes when the service is performed in federally
recognized Indian country;
• Low and moderate-income housing;
• Contracts performed out-of-state;
• Hospitals and certain other exempt entities;
• Real property located within a public right-of-way.
For more information on nontaxable contracts, see Types
of Nontaxable Contracts on Page 16.
CONTRACTOR'S BILL TO THE FINAL
CUSTOMER
The general contractor has two options to choose from when
Option One
The general contractor breaks the bill to the property owner
into three components:
• Materials consumed, including tax paid on the materials;
• Service charges, including the markup on materials,
overhead expenses, reimbursed expenses, labor charges,
• Sales tax on the service portion of the bill, if applicable.
The contractor bills its customer:
Taxable labor $ 600.00
Materials $ 400.00
Sales tax on labor ($600 x 6.35%) $ 38.10
$ 1,038.10
Sales tax separately stated is held in trust and must be remitted
by the contractor. In this example, the contractor must remit
$38.10 in tax with its return.
Option Two
The general contractor does not break the bill down. Only
a total charge is shown on the bill. The bill includes:
• Materials consumed, including tax paid on the materials;
• Service charges, including the markup on materials,
overhead expenses, reimbursed expenses, labor charges,
• The phrase "sales tax included on services", if
applicable.
The contractor bills its customer:
Total labor and materials is $1,063.50
(sales tax included on services)
The contractor must remit the sales tax on the service portion
of the bill only with its return. If the contractor has already
paid $12.70 in tax to its vendors on material purchases of $200,
the sales tax on the $800 service portion of the bill is $50.80.
Sales tax on the service portion of the bill may be backed
out by multiplying the entire service charge by .9403. The
result equals gross receipts from services. Subtract the gross
receipts from services from the entire service charge. See
Examples 3 and 4 in the Appendix.
Regardless of the option chosen, the general contractor
must keep accurate records of the actual costs of materials
and service, including all subcontracting costs. The general
service portion of the contract.
The purchaser of a taxable good or taxable service is
responsible for paying use tax to DRS unless the retailer
provides the purchaser with a receipt that shows sales tax
was charged in one of the manners described above. See
Paying Sales or Use Tax on Purchases on Page 20.
A sales invoice or an American Institute of Architects
for Payment and/or a Continuation Sheet, is an acceptable
receipt. A contract does not constitute a receipt.
16 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Tax Held in Trust
Some contractors have made the mistake of incorrectly
reimbursing themselves for tax they paid on materials out of
the tax they collect from their customers. Conn. Gen. Stat.
§ 12-408(2) provides that tax collected by a retailer is held
in trust for the state and the entire amount of tax collected
must be remitted to DRS (even if the tax was charged in
error) or refunded to the customer.
Conn. Gen. Stat. § 12-408(2);
§ 12-411(2)
CONDOMINIUMS
If a condominium unit is occupied by the owner, it is
considered residential real property. When a unit is rented, it
is considered income-producing real property for the owner,
but would still be treated as residential real property if the
tenant purchases the service directly from the contractor.
Therefore, if the contractor performs a service directly for
the owner of the condominium unit and the service is a
service to real property, the taxability depends on whether
the unit is owner-occupied or rented.
If the contractor performs the service directly for a condominium
association and the service is a service to real property,
including common areas, under Conn. Gen. Stat. § 12-407(a)
(37)(I), tax applies to the percentage of the service charge that
equals the percentage of the total units that are rental units. See
Services Taxable to Certain Real Property on Page 13.
A condominium complex has a total of one hundred
units. Forty of the units are owner-occupied and sixty are rental
units. The sixty units are income-producing real property. If the
contractor is performing a taxable service for the association,
60% of the service charge would be taxable. The contractor
must obtain from the condominium association a completed
, Residential Condominium Association. CERT-
103 requires the association to provide a breakdown of the
day of the calendar year.
Often an association contracts with a property management
company to oversee the day-to-day operations of the
association. The taxable portion of the management fee is
equivalent to the percentage of rental units. The property
contractor providing a taxable service as long as the service
will be resold to the association. The property management
company must collect tax on the taxable services it resells.
Some services, such as landscaping and snow plowing,
performed by a contractor to a residential condominium
association or to the owner of a condominium unit are 100%
taxable, regardless of the percentage of the owner-occupied
units. The contractor must charge tax on the entire bill for
these services. For examples of these services, see Services
Taxable to All Real Property on Page 13.
EXEMPT PURCHASERS
Some purchasers of otherwise taxable contracting services
are exempt from sales tax.
TYPES OF NONTAXABLE CONTRACTS
Contracts With Exempt Organizations
The following section describes the types of exempt
issued by the organization to the contractor. The contractor
A contractor performing work for one of these exempt
organizations should issue a , Contractor’s
Exempt Purchase Certicate, to its vendors for purchases
of materials and supplies installed or placed in the project.
Turn-key contracts with governmental or other exempt
entities, in which the exempt entity contracts for a
construction project to be completed by the contractor on
land not owned by the exempt entity during the construction
period, do not qualify for exemption from tax.
• A charitable or religious organization that holds an
Internal Revenue Service § 501(c)(3) or (13) determination
letter or a valid exemption permit issued by DRS.
, Purchases of Tangible Personal
Property and Services by Qualifying Exempt Organizations;
•
homes licensed by the State of Connecticut under Chapter
368v of the Connecticut General Statutes.
, Purchases of Tangible Personal
Property and Services by Certain Hospitals, Nonprot
Nursing Homes, Nonprofit Rest Homes, or Nonprofit
Residential Care Homes;
•
§ 10-397.
, Exempt Purchases by Qualifying
Governmental Agencies;
• Materials Innovation and Recycling Authority
(MIRA) (formerly, the Connecticut Resource Recovery
Authority (CRRA)) or a lessee or operator of a MIRA
project.
, Exemption for Projects of the
Connecticut Resource Recovery Authority and Solid Waste-
to-Energy Facilities. CERT-131 may also be issued for
purchases of services or tangible personal property used
or consumed in operating a solid waste-to-energy facility.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 17
Contracts With Governmental Agencies
Qualifying governmental agencies issue ,
Exempt Purchases by Qualifying Governmental Agencies,
to the contractor. Qualifying transactions with governmental
agencies include:
• Sales to the United States government and its agencies;
• Sales to the State of Connecticut and its agencies;
• Sales to political subdivisions of Connecticut (cities and
towns and their agencies, including municipal housing
authorities);
• Sales of tangible personal property or services used to
develop property that the State of Connecticut is under
contract;
• Sales in connection with the demolition, remediation
or preparation of Adriaen’s Landing and Rentschler
Field;
• Sales to tax districts.
A governmental agency may
appoint a business to act as its agent to purchase goods
and services. A principal-agent relationship exists between
a business and a governmental agency when all of the
following conditions are met:
• The business is expressly acting as an agent for the
governmental agency. The contract between the
business and the governmental agency must state that
the business is acting as an agent for the governmental
agency;
• All purchases made by the business for the governmental
agency are used exclusively for the governmental
• The governmental agency issues CERT-134 to the
business.
The governmental agency signs
CERT-134, or in the alternative, the business appointed
by the governmental agency (as explained above) signs
CERT-134 as the purchaser and designates itself as agent
of the governmental agency. The business attaches to the
CERT-134 a copy of documentation from the governmental
agency expressly designating the business as agent.
Federally Recognized Indian Tribes
Contractors performing services in Indian country of a
federally recognized Indian tribe must receive a completed
, Exempt Purchases by an Enrolled Member or
by the Tribal Government of the Mashantucket Pequot Tribe
or Mohegan Tribe, from an enrolled member or agent of the
Indian tribe.
Purchases of tangible personal property outside
of Indian country of the tribe by contractors or subcontractors
of the tribe for use in projects for the tribe within Indian
country of the tribe are not subject to Connecticut sales or
use tax provided the contractors or subcontractors comply
with the provisions of Conn. Gen. Stat. §§ 12-407(a)(6) or
12-408c. See
for more information on
purchases of tangible personal property within and outside
of Indian country of the tribe.
Contractors issue , Exempt Purchases by
Contractors in Connection With Construction Projects on
the Mashantucket Pequot or Mohegan Reservations, to
their vendors when making purchases of tangible personal
property where title passes to the contractor in Indian
country of the tribe or where delivery of rented property is
taken by the contractor in the Indian country of the tribe. The
exemption only applies if the equipment is used exclusively
and permanently in Indian country of the tribes and the
entire cost of the purchase is passed on to the tribe or an
enrolled member of the tribe.
Connecticut Innovations, Inc. (CII) (formerly,
Connecticut Development Authority (CDA))
The CII approves certain projects for exemption under
Conn. Gen. Stat. § 32-23h. Participants under this program
and contractors for such projects should contact the CII and
follow CII procedures.
Low and Moderate Income Housing
Sales of tangible personal property and services used in the
construction, rehabilitation, renovation, repair, maintenance,
or operation of low and moderate income housing facilities
are exempt.
The sponsor of a low and moderate income housing facility
must apply to DRS using , Application for a Facility
Approval Letter. The Facility Approval Letter acknowledges
the facility is constructed under the sponsorship of, and
, Sales and Use Tax Exemption
for Low and Moderate Income Housing Facilities.
The sponsoring party issues to the contractor a copy of the
Facility Approval Letter.
To purchase exempt materials
and services used in the construction, rehabilitation,
renovation, repair, maintenance, or operation of the facility,
the contractor must issue , Exempt Purchases
of Tangible Personal Property or Services for Low and
Moderate Income Housing Facilities, to the vendor. The
contractor must obtain a copy of the Facility Approval Letter
18 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
or operator of the facility, and attach it to CERT-126.
The contractor may sell all labor exempt, if the contractor
receives CERT-126 with the Facility Approval Letter
attached from the sponsor, owner, operator, or another
contractor.
Conn. Gen. Stat. § 12-412(29)
Waste Treatment Facilities
There is an exemption for tangible personal property
incorporated into or consumed in the operation of industrial
waste treatment facilities.
An industrial waste treatment facility treats industrial
waste so it may be discharged into the waters of the state
or into sewerage systems emptying into those waters. The
primary purpose of the treatment is the reduction, control,
or elimination of pollution of those waters.
The Department of Energy and Environmental Protection
(DEEP) Bureau of Materials Management and Compliance
Assurance – Water Permitting and Enforcement Division
approves these exempt items.
Items that appear on the “List of Approved
Water Pollution Equipment” contained in
, Tax Exemptions for Certain Water
Pollution Control Equipment, will be incorporated
into or used and consumed in the operation of an industrial
waste treatment facility are exempt from tax. The contractor
purchases the items exempt from tax by issuing its supplier
a completed , Purchases of Tangible Personal
Property Incorporated Into or Consumed in Water Pollution
Control Facilities.
If the item is not listed in Policy Statement 2014(1) but the
purchaser intends to use or consume it in the operation of
those facilities, the purchaser must receive written approval
from DEEP indicating the item is approved for use in a
water pollution control facility. The purchaser may then buy
the item exempt by issuing both the approval letter and a
completed CERT-124 to the purchaser’s supplier.
The contractor must pay tax on all materials and supplies
not covered by this exemption.
Services performed in the evaluation, treatment,
containment, or removal of hazardous waste or other contaminants
of air, water, or soil are taxable. See Environmental Services.
Contractors collect tax on labor in a project when
incorporating the exempt materials into:
• New construction
Contractors collect tax on labor in a project when
incorporating the exempt materials into:
• Existing commercial property
• Existing industrial property
• Existing income-producing property.
Conn. Gen. Stat. § 12-412(21)
Air Pollution Control Facilities
There is an exemption for tangible personal property
incorporated into or used in an air pollution control
facility. An air pollution control facility reduces, controls,
or eliminates air pollution. The DEEP Bureau of Air
Management approves these exempt items.
Items that appear on the "List of Approved Air
Pollution Equipment" contained in ,
Tax Exemptions for Certain Air Pollution Control
Equipment, and will be incorporated into or used and
consumed in the operation of an air pollution control facility
are exempt from tax. The contractor purchases the item
exempt by issuing to its supplier a completed ,
Purchases of Tangible Personal Property Incorporated Into
or Consumed in Air Pollution Control Facilities.
If the item is not listed in Policy Statement 99(2), but the
purchaser intends to use or consume it in the operation
of those facilities, the purchaser must receive written
approval from DEEP that the item is approved for use in an
air pollution control facility. The purchaser may then buy
the item exempt by issuing both the approval letter and a
completed CERT-117 to the contractor’s supplier.
The contractor must pay tax on all materials and supplies
not covered by this exemption.
Services performed in the evaluation, treatment,
containment, or removal of hazardous waste or other
contaminants of air, water, or soil are taxable. See
Environmental Services.
Contractors collect tax on labor in a project when
incorporating the exempt materials into:
• New construction
Contractors collect tax on labor in a project when
incorporating the exempt materials into:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Conn. Gen. Stat. § 12-412(22)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 19
Out-of-State Contracts
There is no Connecticut tax due on the contractor’s
labor performed on a project located outside the State of
Connecticut.
However, Connecticut tax may be due on
materials consumed.
Tangible personal property shipped or brought
into Connecticut that is subsequently transported outside of
Connecticut for use thereafter solely outside Connecticut is
not subject to Connecticut tax. Tangible personal property
purchased from a Connecticut retailer, where title to the
property passes in Connecticut, is subject to Connecticut
tax even if the property is subsequently transported outside
Connecticut for use solely outside Connecticut unless the
Buy Connecticut provision applies.
Under the Buy Connecticut provision, businesses may apply
to DRS for a refund of sales and use taxes paid on tangible
personal property purchased from a Connecticut retailer
when those goods will be shipped outside of Connecticut
by common or contract carrier within three years of the date
of purchase for exclusive use outside Connecticut, or will
be incorporated into other property to be shipped outside
Connecticut for exclusive use outside Connecticut.
This provision also allows the Commissioner of Revenue
purchase the property without payment of the tax otherwise
imposed by the Sales and Use Taxes Act. There is no requirement
to ship tangible personal property by common or contract
carrier if the taxpayer has a Buy Connecticut permit prior to the
purchase. See , The “Buy Connecticut”
Provision.
Purchasing for Contracts With Exempt Entities
For information regarding purchasing materials and services
while engaged in a contract with an exempt entity, see
Page 23, Purchasing Under Contracts With Exempt Entities.
CONSTRUCTION CONTRACTS WITH
DIRECT PAYMENT PERMIT HOLDERS
contractors enter into contracts with direct payment permit
holders.
Direct payment permits allow permit holders to pay use tax
directly to DRS rather than paying the sales tax to their vendors.
Renovation Construction Projects
Contractors that enter into renovation construction contracts
with direct payment permit holders do not pay sales or use
tax on the purchase of materials and supplies to be installed
or permanently placed in the project. A contractor must
pay tax to the vendor when purchasing, leasing, or renting
tools and equipment and when buying items that will be
used or consumed during the project instead of installed or
permanently placed.
The direct payment permit holder issues a copy of its
, Direct Payment Permit, to the general contractor.
The general contractor issues a copy of the direct payment
permit and , Contractor’s Exempt Purchase
Certicate for a Renovation Contract With a Direct Payment
Permit Holder, to its suppliers when purchasing materials
and supplies to be installed or permanently placed in a
renovation project.
General contractors issue a resale certificate to their
subcontractors for renovation labor resold to a direct
payment permit holder.
The general contractor provides copies of the direct
payment permit to all renovation project subcontractors.
The subcontractor issues CERT-133 and a copy of the direct
payment permit to its suppliers when purchasing materials
and supplies to be installed or permanently placed in a
renovation project without paying sales tax.
A direct payment permit holder self-assesses use tax on the
total bill from the general contractor that includes:
• Materials and supplies installed or permanently placed
in a renovation project;
• Labor used in the renovation project.
New Construction Projects
Direct payment permit holders may not issue, and the
general contractor may not accept, the direct payment permit
for new construction projects. General contractors and
subcontractors must pay sales and use taxes on purchases
of materials and supplies installed or permanently placed in
new construction projects and on purchases, leases, or rental
of tools and equipment. CERT-133 and the direct payment
permit cannot be used for new construction contracts.
Construction Projects That Involve Renovation
and New Construction
When the general contractor is performing under a
construction contract that involves both renovation and
new construction, the general contractor must separately
state the costs for the new construction and the renovation
portions of the contract on the bill or invoice to the direct
payment permit holder. This provides the direct payment
permit holder with the actual cost of the renovation portion
of the contract on which the use tax is self-assessed.
The direct payment permit holder must issue a copy of
the direct payment permit to the general contractor for the
renovation portion of the contract. The general contractor
must attach a copy of the taxpayer’s direct payment
permit to CERT-133 and issue CERT-133 to its suppliers
when purchasing materials and supplies to be installed or
20 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
CONTRACTORS PAYING SALES OR USE TAX ON PURCHASES
Contractors are considered to be the consumers of the materials
and supplies used to perform their contracting services. This
means that the contractor must pay sales tax on their purchases
MATERIALS USED IN CONSTRUCTION
CONTRACTS
Contractors are the consumers of materials and supplies
the contractor pays tax on purchases of materials.
The only exceptions are:
be used when purchasing materials unless one of the
following conditions is met. The contractor:
• Has a store that sells building supplies;
• Sells particular building materials (windows, doors,
lumber, sheet metal) to the property owner and
states on the invoice all of the following:
1. Charge for the materials;
2. Exact quantity of materials being sold;
3. Additional price for which the contractor will
install the products being sold.
In both cases, the contractor must charge sales tax on the
materials and taxable labor, if any, unless the transaction
apply
only to contractors that also maintain storefront
businesses, such as plumbing supply stores or lumberyards.
Items taken from the inventory of a storefront business for
use in a construction contract are subject to the use tax on
their cost. The contractor is responsible for self-assessing
the use tax and should not charge its customers tax on items
taken from inventory. Contractors that only sell materials
from their vehicles or do not maintain storefront businesses
may not purchase materials on resale, but must pay tax on
them when they purchase the items, and must not charge
their customers tax on these items.
Contractors must self-assess use tax when they purchase
taxable goods for use in Connecticut from an out-of-state
vendor not registered to collect Connecticut use tax. If the
materials were purchased outside Connecticut for use on a
Connecticut job and the tax paid to the other state is less
and the tax paid to the other state must be reported and
paid to Connecticut. To self-assess use tax, the contractor
should report the gross receipts for any use tax due on the
appropriate line (Lines 4 – 6) on their sales tax return.
B.
Material incorporated into charitable, religious or
governmental property. A contractor that enters into a
construction contract with an exempt entity may purchase,
exempt from tax, the materials that will be installed or
placed and remain in the real property. See Purchasing
Under Contracts With Exempt Entities on Page 23.
Conn. Gen. Stat. § 12-430(5); Conn.
Agencies Regs. § 12-426-18
permanently placed in the renovation portion of the project
without paying sales tax. The general contractor provides
copies of the direct payment permit to all subcontractors
involved in the renovation portion of the project. The
subcontractors for the renovation labor to be resold to the
direct payment permit holder.
The subcontractors must attach a copy of the taxpayer’s
direct payment permit to CERT-133 and issue CERT-133
to its suppliers when purchasing materials and supplies to
be installed or permanently placed in the renovation portion
of the project without paying sales tax.
Recurring Taxable Services Provided to Real
Property Purchased by Direct Payment Permit
Holders
A direct payment permit holder must issue a copy of
the direct payment permit to the service provider when
purchasing any taxable services provided to real property
such as property management, landscaping, janitorial,
or maintenance services. The service provider must
attach a copy of the taxpayer’s direct payment permit to
CERT-133 and issue CERT-133 to its suppliers when purchasing
materials and supplies to be installed or permanently placed
in the real property without paying sales tax.
The service provider supplies copies of the direct payment
from which it is purchasing recurring taxable services for
resale to the direct payment permit holder. The subcontractors
must attach a copy of taxpayer’s direct payment permit to
CERT-133 and issue CERT-133 to its suppliers when purchasing
materials and supplies to be installed or permanently placed
in the real property without paying sales tax.
See , Q & A on the
Connecticut Direct Payment Permit Program, for more
information about direct payment permit holders.
Conn. Gen. Stat. § 12-409a
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 21
TOOLS OF THE TRADE
Contractors must pay tax on the purchase, lease, or rental of
all tools used in their trade. This includes hand tools, power
equipment. Contractors must pay tax on tools even if they
will use them on exempt projects.
Generally, if a used item is traded in on the purchase of a
new item of the same kind, tax is calculated on the selling
price, after allowing for the trade-in credit, provided the
retailer intends to resell the item traded. See
, Sales and Use Taxes on Returned
Goods, Even Exchanges, and Trade-Ins.
Conn. Gen. Stat. § 12-407(a)(8)(B)(v)
and § 12-430a
CONTRACTOR’S PURCHASE OF
SUBCONTRACTOR SERVICES
General contractors often purchase the services of
subcontractors to complete a project. There are two possible
methods of purchasing subcontractor services:
1. General Contractor Issues a Resale
A general contractor can purchase a subcontracting service
for resale as long as both the following conditions are met:
• The subcontracting service is an integral, inseparable
component of the service to be sold to the end customer.
An integral, inseparable component is essential to
sold. If the job is taxable, the contractor charges the
end user tax on the entire service bill.
The general contractor may not use or consume the
service purchased for resale. For example, a general
contractor that hires the services of a temporary help
must pay tax on that service and cannot purchase it on
a resale basis because the service of a secretary is not
an integral and inseparable part of the service to be sold
to the end customer;
to be sold are services listed in Conn. Gen. Stat.
§ 12-407(a)(37) as taxable services. This means the
a. Services performed on new construction (other than
services taxable to all real property, see Page 13);
b. Services performed on owner-occupied residential
real property (other than services taxable to all real
property, see Page 13);
c. Any other taxable services not enumerated in
§ 12-407(a)(37), such as telecommunications
services;
d. Nontaxable services such as engineering and
architecture and design services.
A property management company providing
taxable services to industrial, commercial, or income-
producing real property incurs long-distance telephone
charges on behalf of its client in the course of performing
its management services. The management company may
not purchase telecommunications services on a resale basis
because telecommunications services are not an integral,
inseparable component of the services being sold and are not
enumerated in Conn. Gen. Stat. § 12-407(a)(37).
A contractor providing taxable renovation services
to commercial, industrial, or income-producing real property
purchases architectural services. The purchase of architectural
services by the contractor is not a taxable service and may not
be purchased on resale. The architectural services become an
expense of the contractor and are part of the total service charge
and subject to sales tax.
Subcontractors are responsible for paying tax on the
materials used in performing a subcontract. Subcontractors
may only resell the service portion of their bill. A
subcontractor’s bill to a general contractor should be broken
out into two parts when the general contractor issues a
• Materials consumed, including tax paid on the materials;
• Service charges. Service charges include the markup
on materials, overhead expenses, reimbursed expenses,
If the sale is a taxable service, the general contractor should
charge tax to the property owner on the service portion of
the bill only. See Example 1 in the Appendix.
If the subcontractor break out the charge for
materials from the charge for service, the general contractor
is required to charge sales tax to the property owner on the
entire amount of the subcontractor’s bill.
If the service is performed for an exempt entity, a
contractor as long as the above conditions are met.
22 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
A contractor providing taxable renovation services
to a thrift shop owned by a church purchases the services of
a janitorial company to clean up the job site. Because the
janitorial service is an integral, inseparable component of the
services being sold and is enumerated in Conn. Gen. Stat.
to the janitorial company even though the job will ultimately
be exempt because the renovation services are provided to a
religious organization.
A contractor enters into a construction contract with
building. The contractor obtains personnel from a personnel
agency to provide carpentry services to the new addition.
Because new construction is excluded from taxable services
to existing industrial, commercial, or income-producing real
property under Conn. Gen. Stat. § 12-407(a)(37), the personnel
services do not become an integral, inseparable component of
another taxable service under Conn. Gen. Stat. § 12-407(a)(37).
The contractor is not allowed to purchase personnel services
tax on the personnel services.
Conn. Gen. Stat. § 12-410(5)
2. General Contractor Does Not Issue a
to the subcontractor and it is a taxable transaction, the
subcontractor must charge the general contractor tax on the
service portion of the bill.
The subcontractor is the consumer of the materials used
has two options to choose from when billing the general
contractor.
Option One
The subcontractor breaks the bill into three parts:
• Materials consumed, including tax paid on the materials;
• Service charges. Service charges include markup on
materials, overhead expenses, reimbursed expenses,
• Sales tax on the service portion of the bill.
Option Two
The subcontractor does not break the bill down. Only a total
charge is shown on the bill. The bill includes:
• Materials consumed including tax paid on the materials;
• Service charges. Service charges include markup on
materials, overhead expenses, reimbursed expenses,
• The phrase "sales tax included on services".
Sales tax on the service portion of the bill is calculated by
multiplying the entire service charge by .9403. The result
equals gross receipts from services. Subtract the gross
receipts from services from the entire service charge. The
Example 4 in the
Appendix.
Both methods require the subcontractor to charge sales tax
on the service portion of the contract.
Only the service portion of the general contractor’s bill to
the property owner is subject to tax since the subcontractor
has already charged the general contractor tax on the
subcontractor’s service. See Example 2 in the Appendix.
Temporary Personnel Agency Services
Purchases of temporary personnel agency services are
subject to tax. A contractor may purchase temporary
personnel services on a resale basis, if both of these
conditions are met:
1. The temporary help must be an integral, inseparable
component of the contractor’s service. For example,
carpenters and plumbers are an integral, inseparable
component of the contractor’s service, while secretaries
and bookkeepers are not;
2. The contractor must be performing a service
to real property.
As long as both of the above conditions are met, the
contractor may purchase temporary help on a resale basis.
Temporary help cannot be purchased on a resale basis if the
contract is for new construction because new construction
is not a taxable service to real property. If the service is
issued as long as the above conditions are met.
obtains personnel from a temporary personnel agency to
provide electrical services. Because new construction is
excluded from taxable services to industrial, commercial
or income-producing real property under Conn. Gen. Stat.
§ 12-407(a)(37)(I), the contractor must pay tax on its purchase
of the personnel services, which are enumerated under Conn.
Gen. Stat. § 12-407(a)(37)(C).
A general contractor providing taxable renovation
a temporary personnel agency to provide plumbing services.
Because the plumbing service is an integral, inseparable
component of the general contractor's service being sold and
is enumerated in Conn. Gen. Stat. § 12-407(a)(37), the general
personnel services.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 23
NONRESIDENT CONTRACTOR REQUIREMENTS
Nonresident contractor means a contractor or subcontractor
who does not maintain a regular place of business in
Connecticut.
Resident contractor means a contractor or subcontractor
who maintains a regular place of business in Connecticut.
Regular place of business means:
•
in Connecticut at which a contractor is doing business
in its own name in a regular and systematic manner;
that is
• A place continuously maintained, occupied, and used
by the contractor in carrying on its business through
its employees regularly in attendance to carry on the
contractor's business in the contractor's own name.
A regular place of business :
• A place of business for a statutory agent for service of
at the site of construction;
• Locations used by the contractor only for the duration
of the contract, such as short-term leased offices,
warehouses, storage facilities, or facilities that do not
•
Veried contractor means a nonresident contractor or
subcontractor who:
• Is registered for all applicable taxes with DRS;
PURCHASING UNDER CONTRACTS
WITH EXEMPT ENTITIES
Purchasing Materials
When a construction contract is with an exempt entity,
the contractor may purchase materials and supplies to be
installed or placed in the project exempt from tax. The
materials and supplies must be installed or placed in the
project and remain in the project after its completion.
To purchase materials and supplies exempt from tax,
the contractor issues a , Contractor’s Exempt
Purchase Certicate, to its vendor. Examples of items likely
to be exempt from these contracts are bathroom partitions,
metal lockers, theater seats, and other items nailed, bolted,
or screwed into the real property, as well as appliances and
remain on the property after the contract is completed.
Upon completion of the project, the contractor must report
and pay use tax on any materials still in inventory that
were purchased exempt from tax. If materials or supplies
are installed or placed in a project for an exempt entity
and the contractor has already paid tax on the materials or
supplies, the purchase price of the materials or supplies may
be deducted on the next return as an adjustment.
Contractors are the consumers of all the tools, supplies
contract. Contractors must pay tax on the purchase of these
items because they do not become incorporated or placed
in the exempt job even if they are used up during the job.
Purchasing Services
When a contractor purchases a service while engaged in a
contract with an exempt organization, the contractor must
determine if the service will be consumed or resold. Do not
assume a contract with an exempt entity means all services
can be bought exempt from tax. Only those services resold
by the contractor can be purchased exempt from tax. To
issued to the service provider. Services described in Conn.
Gen. Stat. § 12-407(a)(37) can be resold if they become
an integral and inseparable component of the service also
enumerated in Conn. Gen. Stat. § 12-407(a)(37) being
sold to the exempt entity. Services consumed by the
contractor cannot be purchased for resale. If the contractor is
purchasing and consuming a taxable service, the contractor
must pay tax to the seller of the service.
A contractor engaged in a contract with an
exempt organization purchases secretarial services to process
are taxable to the contractor because it is a taxable service
and the contractor is consuming them. The services cannot
be purchased on resale because they are not considered an
integral and inseparable component of the building contract
with the exempt entity. However, if a general contractor hires
the plumber because the service is considered to be an integral
and inseparable component of the building contract.
If the contractor is purchasing temporary personnel agency
services, refer to the section on Temporary Personnel
Agency Services on Page 22 to determine if the service can
be purchased on a resale basis.
Conn. Agencies Regs. § 12-408(2);
§ 12-410(5); § 12-411(2)
24 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
CLOSING A BUSINESS
the contractor is out of business and complete the return
to report sales made and taxes due, if any. Enter the last
date of business in the designated space, sign the return,
TSC and
destroy the Sales and Use Tax Permit. If the business is
Sales
and Use Tax Permit and return it in the same envelope with
The business may also have to contact other state agencies,
such as the Secretary of the State, to properly close the
business entity tax or corporation tax accounts. If a business
is not properly closed, future liabilities or obligations may
be assessed.
contractor to hold back a portion of the amount owed
the subcontractor under the contract.
•
surety bond for 5% of the entire project
price with DRS when the contract price for the entire
project is $250,000 or more. A person doing business
a bond with DRS, but is not required to withhold an
amount from payment due to the contractor under the
contract.
• A prime or general contractor must hold back 5% of
subcontractor obtains and furnishes ,
Certicate of Compliance, from DRS. A Form AU-968
authorizes the prime or general contractor to release all
or a portion of the amounts held back from payment to
• Compliance with the provisions of Conn. Gen. Stat.
§ 12-430(7) relieves the person doing business with a
nonresident contractor from liability for the nonresident
contractor’s withholding tax liability or liability for
sales or use tax on materials and consumables. It
does not relieve the person doing business with a
nonresident contractor from liability for sales or use
tax on purchases of services.
Owners or tenants of residential real property are not
required to comply with the nonresident contractor
requirements of Conn. Gen. Stat. § 12-430(7).
See , 2011 Legislative Changes to
the Procedures Governing Nonresident Contractors.
Conn. Gen. Stat. § 12-430(7)
•
• Has no outstanding tax liabilities to DRS;
• Has submitted a , Nonresident Contractor
Request for Veried Contractor Status, and has been
either:
1. Has been registered for all applicable taxes with
DRS for at least three years preceding the contract;
2.
using , Verication Bond.
Unveried contractor means a nonresident contractor or
All contractors, including nonresident contractors, are
required to register with DRS for a Sales and Use Tax
Permit as well as any other required taxes whether they are
, Nonresident Contractor Request for
Veried Contractor Status, and , Verication
Bond.
Bond Requirements of Nonresident
Contractors
Nonresident construction contractors are required to furnish
security for Connecticut taxes arising from jobs performed
in Connecticut.
• There are two classes of nonresident contractors:
veried and unveried. A nonresident prime or general
thus eliminate the requirement for the prime or general
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 25
The DeTails
26 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
AIR CONDITIONING
( Central Air Conditioning Ventilation Systems)
ALARM SYSTEMS AND CLOSED
CIRCUIT TELEVISION SYSTEMS (CCTV)
Permanent Installation
means the wire, keypads, or control
boards and sensor devices are built into the real property.
The contractor pays tax on all purchases of
materials that become part of the alarm system including:
Horn or siren Smoke or re detectors
Keypad Wire
Motion detectors Monitors
The contractor does collect tax when the alarm
system is permanently installed in:
• New construction
• Owner-occupied residential property
The contractor tax when the alarm system is
permanently installed in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the alarm or CCTV system;
• Repairs or maintenance of the alarm or CCTV system,
except when performed under a repair or maintenance
contract and no additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed
on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the alarm or CCTV system
without paying sales tax to the vendor by issuing a resale
Integral parts purchased for use in performing services under
a maintenance, repair, or warranty contract are not subject to
tax unless a charge for the parts is made by the contractor to
Repair
or Maintenance of Tangible Personal Property (Units) on
Page 11. Also see Warranty Contracts on Page 11 for more
information on warranty contracts.
Monitoring Services
Tax on the sale of a monitoring contract.
See Conn. Agencies Regs. §§ 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty and
12-426-27(b)(5), Private investigation, protection, patrol,
watchman and armored car services.
ANTENNAS AND COMMUNICATIONS
TOWERS
Communications towers typically are tall steel structures
mounted on concrete pads on the ground and secured to
the ground with guy wires. There may also be buildings
constructed at the tower sites. Tower owners may grant
wireless communications companies the right to attach
their equipment to the towers and install equipment in the
buildings for a monthly fee. The towers are expected to
removing them and because of considerations involved
in Federal Communications Commission licensing,
contractual arrangements with communications companies,
and zoning approvals.
The towers and buildings are real property, not tangible
personal property. As such, payments for the right to attach
equipment to the towers are not the sale or lease of tangible
personal property and, therefore, are not taxable. Services
performed on the towers themselves or the buildings
around them are services to commercial, industrial, or
income-producing real property. However, services
performed on the equipment attached to the towers or
placed in the buildings are maintenance or repair services
to tangible personal property.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 27
Installation of and Services to Communications
Towers
The contractor pays tax on all purchases of
materials that become part of the communications tower
including, but not limited to:
girders guy wires concrete
The contractor does collect tax when performing
services to:
• New construction
The contractor tax when performing services
to:
• Existing communications towers
Installation of Equipment on Communications
Towers
The contractor does collect tax on separately
stated installation labor when installing the equipment on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repair or Maintenance of Equipment Installed
on Communications Towers
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the equipment;
• Repairs to or maintenance of the equipment, except
when performed under a repair or maintenance contract
and no additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when (except when the
service is performed under a warranty contract) the service
is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the equipment without paying
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 18. Also see Warranty Contracts on Page 18
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property and
contracts of maintenance, repair or warranty.
APPLIANCES
( Kitchens Telephone, Audio-Visual, and Computer
Cable or Wiring)
APPRAISAL, REAL ESTATE
Real estate appraisal services are subject to sales and
use taxes.
ARCHITECTURAL SERVICES
In general, architectural services are not subject to sales
and use taxes. When a contractor purchases architectural
services, the contractor is purchasing a nontaxable service.
However, if the contractor bills the property owner for the
architectural services consumed as a reimbursed expense,
the architectural services become part of the gross receipts
for the contractor’s labor. Therefore, for example, if the
contractor is providing taxable renovation services to
commercial, industrial, or income-producing property,
the total service charge, including the reimbursement for
architectural services, is subject to sales tax. See Example 2
on Page 21.
AUDIO-VISUAL CABLE OR WIRING
( Telephone, Audio-Visual, and Computer Cable or
Wiring)
28 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
AWNINGS
( Standard Units of Equipment)
Installations
A retailer of awnings is selling tangible personal property.
The retailer of awnings can purchase the awnings without
awnings must collect tax on the sale of the awnings.
Separately stated charges for installing the awnings are not
subject to tax when the awnings are placed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repair or Maintenance Services to Awnings
Removed From a Building or Structure
Repair or maintenance services, such as removal, repair,
cleaning, and reinstallation, whether or not separately stated,
performed on an awning that has been removed from a
building or structure are considered repair or maintenance
services to tangible personal property. The service provider
must collect tax on the total charge for repair or maintenance
services. However, the removal or reinstallation of awnings
not related to repair or maintenance services of awnings
are not taxable.
Maintenance Services to Awnings Attached to
a Building or Structure
Maintenance services performed on an awning that
remains attached to a building or structure are considered
maintenance services to real property. The service provider
must collect tax when performing maintenance services to:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The maintenance service provider pays tax on the
purchase of materials and supplies used in performing the
maintenance service. The maintenance service provider is
the consumer of these materials and supplies.
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts without paying sales tax to the
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
BATHROOMS
( Standard Units of Equipment)
Installation
The contractor pays tax on all purchases of
materials including, but not limited to:
cabinets* tile
counter tops toilets
exhaust fans tubs
faucets tub or shower enclosures
mirrors vanities
shower heads whirlpool tubs
sinks
* Contractors installing cabinets should review
, Fabrication and Installation of Stock
and Custom Cabinets, to determine the proper tax
treatment.
The contractor does collect tax when installing
the items above in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the above
items in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 29
BRICKWORK/STONEWORK
1. Related to the Structure Installation
The contractor pays tax on all purchases of
materials for the construction of chimneys, interior, and
but not limited to:
bricks stone cement
stone dust mortar
The contractor does collect tax when installing
the items above in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the items
above in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Taxation of the services of waterproofing, repairing,
rules for installation.
Brick washing is a maintenance service to real property.
See Maintenance Services to Real Property.
2. Related to landscaping, such as the
installation of walkways, walls, and patios
(other than asphalt, tar, macadam, or poured
concrete)
The contractor purchases all the materials
including, but not limited to brick, stone, mortar, and stone
dust that will be physically incorporated into the project
the vendor.
The contractor tax on the labor and
materials to install when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See also Landscaping and Horticulture Services,
Maintenance Services to Real Property, and Painting,
Staining, Varnishing, and Waterproong.
BUILDING ENGINEERING, BUILDING
PLANNING OR DESIGN SERVICES
In general, building engineering and building planning or
design services are not subject to sales and use taxes. When
a contractor purchases any of these services, the contractor is
purchasing a nontaxable service. However, if the contractor
bills the property owner for the building engineering
and building planning or design services consumed as a
reimbursed expense, those services become part of the gross
receipts for the contractor’s labor. Therefore, for example,
if the contractor is providing taxable renovation services
to commercial, industrial, or income-producing property,
the total service charge, including the reimbursement
for building engineering and building planning or design
services, is subject to sales tax. See Example 2 on Page 21.
CABINETS
( Bathrooms, Kitchens, Standard Units of
Equipment)
CARPENTRY
The contractor pays sales or use tax on all
purchases of materials including, but not limited to lumber
and building supplies.
The contractor does collect tax when performing
carpentry services to:
• New construction
• Owner-occupied residential property
The contractor tax when performing carpentry
services to:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
CARPET CLEANING
( Janitorial Services)
CARPETING
( Floor Coverings)
30 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
CENTRAL AIR CONDITIONING
Installation
The contractor pays tax on all purchases of
materials that become part of the central air conditioning
system including, but not limited to:
blowers central air conditioning units
duct work control devices
The contractor does collect tax when installing
the central air conditioning system in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the central
air conditioning system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance (excluding duct
work)
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the air conditioning unit;
• Repairs to or maintenance of the air conditioning unit
except when performed under a service contract and no
additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed
on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the air conditioning system
without paying sales tax to the vendor by issuing a resale
These parts include, but are not limited to:
blowers excess moisture drains
coils fans
compressors lters
condenser coils refrigerant
control devices refrigerant tubes
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See the Interior Sheet Metal section of this guide for tax
treatment of the cleaning and maintenance of interior duct
work.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
CENTRAL VACUUM SYSTEMS
Installation
The contractor pays tax on all purchases of
materials that become part of the central vacuum system
including, but not limited to:
vacuum units wall outlets
pipe control devices
tubing
The contractor does collect tax when installing
the central vacuum system in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the central
vacuum system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 31
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the central vacuum unit;
• Repairs to or maintenance of the central vacuum unit
except when performed under a service contract and no
additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed
on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the central vacuum system
without paying sales tax to the vendor by issuing a resale
Integral parts purchased for use in performing services
under a may be
purchased on resale and are not subject to tax unless a charge
for the parts is made by the contractor to the customer. For
Repair or Maintenance
of Tangible Personal Property (Units) on Page 11. Also see
Warranty Contracts on Page 11 for more information on
warranty contracts.
The repair, cleaning, and maintenance of the interior piping
of the system follows the taxation rules for installation of
a system.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
CHIMNEYS
Installation and Repairs
The contractor pays tax on all purchases of
materials including, but not limited to:
bricks ues
caps pots
cement rain and draft deectors
ashing stone
The contractor does collect tax when installing
items in:
• New construction
• Owner-occupied residential property
The contractor tax when installing or repairing
the above items in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See the Exterior Sheet Metal Work section of this guide for
CHIMNEY CLEANING
Chimney cleaning is a maintenance service. The contractor
pays tax on the purchase of all cleaning supplies. The
contractor tax on the total charge for chimney
cleaning when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
CLEAN ROOMS/HVAC SYSTEMS
( Heating Systems Ventilation Systems)
This section covers the construction of clean rooms
(enclosed, environmentally controlled areas) and the
installation of systems used to regulate the temperature,
humidity, and contamination of the rooms by heating,
ventilation, and air conditioning (HVAC) contractors.
32 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
For transactions where a contractor is purchasing
exempt property for use by an exempt user, refer to
, Purchases of Tangible Personal
Property by Contractors for Construction Contracts with
Qualied Entities.
The taxability of the construction of clean
rooms is controlled by Conn. Agencies Regs. § 12-426-18.
Consequently, contractors pay the tax as a consumer on the
purchase or lease of all materials, supplies, or equipment
Contractors may make purchases of component parts for
assembly of machinery exempt from sales and use taxes
under Conn. Gen. Stat. § 12-412(73) when the clean room is
part of a manufacturing process. Clean room machinery may
systems. Clean room machinery does not include the walls,
The contractor does collect tax on the
construction of clean rooms that are part of:
• New construction
The contractor tax when constructing clean
rooms that are in:
• Existing commercial real property
• Existing industrial real property
• Existing income-producing real property
Repair or Maintenance
A contractor repairing or maintaining HVAC units is
performing taxable maintenance and repair services on
tangible personal property. Sales of items of tangible
personal property to contractors performing the service are
of integral part, see Repair or Maintenance of Tangible
Personal Property (Units) on Page 11.
A contractor that both installs and repairs or maintains
HVAC systems used in clean rooms may purchase items of
that can be used in both installation and repair,
such as wiring or piping, on a resale basis. If the item is
used for installation, the contractor must self assess use
tax on the purchase price of the item. If the item is used
for repair purposes, the contractor must collect tax from its
purchase items that can only be used in an installation, such
as ventilation units, etc.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
COMPUTER CABLE OR WIRING
( Telephone, Audio-Visual, and Computer Cable or
Wiring)
DECKS
The contractor pays tax on all purchases of
materials including, but not limited to lumber and building
supplies.
The contractor does collect tax when performing
carpentry services to:
• New construction
• Owner-occupied residential property
The contractor tax when performing carpentry
services to:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Site improvements that put the property to a new use are
new construction (see Page 14). For example, the owner of
an existing apartment complex contracts with a carpenter
to build a wooden deck on the back of each unit. Prior to
this contract there were never any decks attached to this
building. This contract is a new construction contract.
For the repair of decks at a condominium complex, see
Condominiums on Page 16.
DEMOLITION
The contractor pays tax on all materials
consumed, such as explosives and blasting supplies, in
providing demolition services.
The contractor does collect tax when demolition
services are performed on:
• New construction
• Owner-occupied residential property
The contractor tax when demolition services
are performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
As long as the demolition is part of the contract for a new
construction project, the demolition service is not subject
to tax.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 33
DREDGING
Dredging services are performed to create or maintain
a certain depth in bodies of water. Dredging includes
excavation of earth to reach the water line and removal of
excavated or dredged material. Dredging does not include
services provided to piers or docks.
Dredging of Publicly Owned Navigable Waters
Dredging in, adjacent to, or to create access to publicly
owned navigable waterways, such as Long Island Sound,
lakes, rivers, streams, or wetlands, is not taxable. This
includes dredging to create or maintain areas such as
harbors, channels, marinas, and ports that are in, adjacent
to, or that lead to navigable bodies of water, whether or not
dredged areas are privately owned, and regardless of the
purpose of the dredging. Publicly owned means owned by
the federal government, a state, or a political subdivision
of a state.
Dredging of Privately Owned Ponds, Lakes,
Streams, or Inland Wetlands
Dredging to reconstruct, remodel, or repair privately owned
ponds and dredging of existing privately owned ponds,
lakes, streams, or inland wetlands are taxable services,
except when performed adjacent to, or to create access to
publicly owned navigable waterways as described above.
Dredging performed to construct, remodel, or repair
privately owned ponds is taxable as a landscaping service.
Dredging of existing privately owned ponds, lakes, streams,
or inland wetlands are taxable maintenance services even
if the body of water is navigable. These dredging services
are taxable when performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(X)-1, Maintenance
services, and § 12-407(2)(i)(V)-1, Landscaping and
horticulture services, for related information.
DRIVEWAYS, PARKING LOTS, AND
WALKWAYS
(
Paving)
(
Landscaping and Horticulture Services)
DUCT WORK
( Interior Sheet Metal Ventilation Systems)
ELECTRICAL
(Complete wiring or rewiring of structures or the
upgrading of the electrical service of a structure)
The contractor pays tax on all purchases of
materials including, but not limited to:
circuit breakers main power boxes
outlets receptacles
switches wall boxes
wall xtures wiring
door bells, buzzers, and chimes
The contractor does collect tax when installing
the above items in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the above
items in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
ELECTRICAL DEVICES
Repairs and Maintenance
Repairing electrical or electronic devices and repair or
maintenance services to any item of tangible personal
property including, but not limited to central air conditioning
units, central vacuum units, refrigeration units, modular
lighting units, pumps, and alarm systems.
The contractor tax for:
• The sale or renewal of a repair, maintenance, or
warranty contract on any item of tangible personal
property or electrical or electronic devices;
• Repairs to or maintenance of tangible personal
property or electrical or electronic devices except when
performed under a service contract and no additional
charge is made for the repair.
34 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed
on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for electrical devices without
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
ELEVATORS AND ESCALATORS
( Inclined Stairway Chairlifts)
Installation
The contractor pays tax on all purchases of
materials including, but not limited to:
motors staircases
cables elevator cars
control panels
The contractor does collect tax when installing
an elevator or escalator in:
• New construction
• Owner-occupied residential property
The contractor tax when installing an elevator
or escalator in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or warranty
contract on the elevator or escalator motor;
• Repairs to or maintenance of the elevator or escalator
motor except when performed under a service contract
and no additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for elevators or escalators
without paying sales tax to the vendor by issuing a resale
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
Taxation of the repairs to or maintenance of the elevator
shaft or box, or the escalator stairs follows the tax rules for
the installation of elevators and escalators.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 35
ENERGY AUDITS
Energy audits, usually performed for utility companies
to foster energy conservation and reduce energy costs to
customers, are services to real property.
The energy audit contractor must pay tax on
all purchases of materials consumed in performing energy
audits. However, if the energy audit contractor separately
states charges to the utility company or utility company
customers for materials such as shower heads, weather
stripping, and insulation, it may purchase the items on resale
and must collect tax on the items.
The energy audit contractor does collect tax
when the audit is conducted on:
• New construction
• Owner-occupied residential property
The energy audit contractor tax to the utility
company or utility company customer when the audit is
conducted on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
ENERGY EFFICIENT HEATING,
COOLING, AND GENERATING SYSTEMS
There is an exemption from Connecticut sales and use taxes
for sales of solar energy electricity generating systems,
passive or active solar water or space heating systems,
and geothermal resource systems. The exemption includes
equipment related to the systems mentioned above and
sales of services relating to the installation of the systems.
There is also an exemption for sales of ice storage systems
used for cooling by a utility ratepayer who is billed by
the utility company on a time-of-service metering basis.
Additionally, this exemption includes equipment related
to ice storage systems and sales of services related to the
installation of the systems.
See , 2007 Legislation Granting a
Connecticut Sales and Use Tax Exemption for Sales of Solar
Heating Systems, Solar Electricity Generating Systems, and
Ice Storage Cooling Systems.
ENVIRONMENTAL SERVICES
Services performed in the voluntary or involuntary
evaluation, prevention, treatment, containment or removal of
hazardous waste or other contaminants of air, water or soil
are included as taxable services to industrial, commercial or
income-producing real property. Such services are nontaxable
when performed on residential real property. See
, Certain Environmental Services Excluded
from Sales and Use Taxes
of hazardous waste and other contaminants that remain
applicable.
The environmental services contractor does
collect tax when the service is performed on:
• New construction
• Owner-occupied residential property
The environmental services contractor tax to
the customer when the services are performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Environmental consulting services are not taxable, as long
as the charge for such services is separately stated from
taxable charges.
EXCAVATING, GRADING, AND LAND
CLEARING
1. Not Related to Landscaping
The contractor does collect tax when performing these
services on:
• New construction
• Owner-occupied residential property
The contractor tax when performing these
services on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
36 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
2. Related to Landscaping
These services are subject to tax when performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Landscaping and Horticulture Services and Landscape
Architectural Services, for related information.
EXTERIOR SHEET METAL WORK
( Gutters)
Installation and Repair
The contractor pays tax on the purchase of
materials including, but not limited to:
ashing metal downspouts metal gutters
The contractor does collect tax when installing
or repairing exterior sheet metal work in:
• New construction
• Owner-occupied residential property
The contractor tax when installing or repairing
exterior sheet metal work in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(I)-1, Services to
industrial, commercial or income-producing real property,
for related information.
EXTERMINATING
Exterminating services mean services to kill or expel pests.
The exterminator pay tax on all purchases
of equipment and supplies including, but not limited to
poisons and traps.
The exterminator tax on the customer’s
total bill when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The service of live trapping a pest and releasing it is a
taxable service.
See Conn. Agencies Regs. § 12-407(2)(i)(Z)-1,
Exterminating Services, for related information.
FENCING
( Landscaping and Horticulture Services, Silt
Fencing Underground Pet Barrier Systems)
The contractor pays tax on all purchases of
materials that become part of the fence.
Except as discussed below, the contractor
tax when installing the fence on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The installation of any chainlink fencing and the installation
of any fencing used to contain livestock on a farm are not
considered landscaping services. The installation of any
chainlink fencing and any fencing used to contain livestock
on a farm is taxable as a service to real property under Conn.
Gen. Stat. § 12-407(a)(37)(I) when performed on existing
industrial, commercial, or income-producing real property.
The construction, remodeling, or repair of fences is
presumed to be a taxable landscaping service until the
contrary is established. This presumption may be rebutted
if it is clearly established that the services performed are not
intended to be landscaping services, such as when an action
is mandated by statute. For example, a contractor installing
a fence that encloses a swimming pool and that is installed
to comply with a law requiring that swimming pools be
enclosed may establish that the services performed are not
intended to be landscaping services. When the services are
not considered to be landscaping services, they are treated
as services to real property.
The following information applies to the construction,
remodeling and repair of fences when they are services
to real property and not considered landscaping services.
The contractor pays tax on all purchases of
materials that become part of the fence.
The contractor does collect tax when installing
a fence on:
• New construction
• Owner occupied residential property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 37
The contractor tax when installing the fence
on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
FIRE, WATER, AND WIND DAMAGE
(Cleaning, deodorizing, and removal of water or debris)
The contractor tax on the total bill when this
service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
For rehabilitation of the structure, see Carpentry, Roong,
Painting, etc. For tree trimming or removal, see Landscaping
and Horticulture Services.
See Conn. Agencies Regs. § 12-407(2)(i)(Y)-1, Janitorial
Services, for related information.
FIREPLACES
Installation or Repair
The contractor pays tax on all purchases of
materials including, but not limited to:
bricks lintels dampers
mantels reboxes stone
ues
The contractor does collect tax when installing,
• New construction
• Owner-occupied residential property
The contractor tax when installing, repairing,
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Chimneys.
FLOOR COVERINGS
1. Carpet
Permanent Installation
tiles)
Wall-to-wall and other carpet installations are generally
services to real property. If the carpet is glued or cemented
structure and is a service to real property.
The contractor must pay tax on the purchase of
collect tax when
permanently installing carpeting in:
• New construction
• Owner-occupied residential property
The contractor tax when permanently installing
the carpet in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Nonpermanent Installation
(Tacked or nailed to the oor)
installation of carpet and is not a service to real property.
The installer is considered a retailer of carpet
and purchases the carpet without payment of tax by issuing
on the sale to the end customer.
The contractor does collect tax on separately
stated nonpermanent installation labor in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
2. Floating Floors
Nonpermanent Installation
The installation of floating floors is nonpermanent
38 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The installer is considered a retailer of the
collects tax on the sale to the end customer.
The contractor does collect tax on separately
stated nonpermanent installation labor in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
3. Floor Coverings Other Than Carpet and
Floating Floors
These services are a service to real property and also include
all necessary surface and other preparations prior to the
actual installation.
The contractor pays tax on all purchases of
materials including, but not limited to:
ceramic tile marble vinyl
concrete terrazzo wood
linoleum
The contractor does collect tax when installing
• New construction
• Owner-occupied residential property
The contractor tax when installing these types
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Other Separately Stated Labor Charges
Other types of separately stated labor charges that may
appear on the customer's invoice in connection with the
include labor to move furniture, labor to rip up the old carpet,
and disposal of the old carpet. When separately stated, the
charges for labor to move furniture are not subject to sales
and use taxes. However, the separately stated charges for
labor to rip up and discard the old carpet are treated as
charges for refuse removal. Refuse removal services are
not subject to tax when performed on new construction
or owner-occupied residential property. Refuse removal
services performed on existing commercial, industrial, or
income-producing real property are subject to tax.
Cutting and binding services performed on carpet remnants
that will be sold as tangible personal property are taxable as
fabrication labor. See Conn. Gen. Stat. § 12-407(a)(2)(G).
FLOOR REFINISHING
Floor renishing usually involves the following services
The contractor pays tax on purchases of all
The contractor does
• Owner-occupied residential property
The contractor
• Existing commercial property
• Existing industrial property
• Existing income-producing property
FURNACES
( Heating Systems)
GARAGE DOORS
Installation and Repairs
The contractor pays tax on all materials
purchased for installing, replacing, or repairing the garage
door including, but not limited to:
garage doors rollers tracks
trim springs sensors
The contractor does collect tax when installing,
replacing, or repairing a garage door in:
• New construction
• Owner-occupied residential property
The contractor tax when installing, replacing,
or repairing a garage door in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 39
GARAGE DOOR OPENERS
Installation
The contractor must pay tax on the purchase of
the electric garage door opener and controls (as a consumer).
If the contractor is a retailer of electric garage door openers,
the contractor may purchase the opener and controls exempt
on the sale to the end customer.
The contractor does collect tax on separately
stated labor for installing the electric garage door opener in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance or warranty
contract on an electric garage door opener;
• Repairs to or maintenance of electric garage door
openers except when performed under a service contract
and no additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the electric garage door
openers without paying sales tax to the vendor by issuing
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
GARBAGE DISPOSALS
Installation
The contractor pays tax on purchases of all
materials incorporated into the garbage disposal system.
The contractor does collect tax when installing
the garbage disposal in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the garbage
disposal in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or warranty
contract on a garbage disposal unit;
• Repair or maintenance of the garbage disposal, except
when performed under a service contract and no
additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
40 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the garbage disposal without
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
GAZEBOS
( Sheds and Gazebos)
GUTTERS
( Exterior Sheet Metal Work Maintenance
Services to Real Property)
The contractor pays tax on purchases of all
materials.
The contractor does collect tax when installing
the gutters in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the gutters
in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The cleaning of gutters and downspouts is taxable as a
maintenance service to real property.
HATCHWAYS
( Standard Units of Equipment)
HAZARDOUS WASTE AND OTHER
CONTAMINANTS OF AIR, WATER OR
SOIL
( Environmental Services)
HEATING SYSTEMS
( Clean Rooms/HVAC Systems)
Installation
Heating systems include but are not limited to:
gas heating systems heat pump units
hot water heating systems oil heating systems
radiant heating systems solar heating systems
steam heating systems warm air duct systems
coal burning heating systems
electric heating systems (permanently installed)
humidiers (permanently installed)
wood burning furnaces (permanently installed)
The contractor pays tax on all purchases of
materials that become part of the heating system including,
but not limited to:
furnace fuel lines
duct work above ground oil tanks
blowers thermostats
control devices hot water heaters
humidiers (permanently installed)
The heating contractor does collect tax when
installing the heating system in:
• New construction
• Owner-occupied residential property
The heating contractor tax when installing the
heating system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance (Excluding duct
work)
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the heating system;
• Repairs to or maintenance of furnaces, oil burners
and blowers, except when performed under a service
contract and there is no additional charge for the repair.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 41
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for cleaning, maintenance, and repairs to
the heating system is subject to tax when the service is
performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
A service charge to diagnose a problem with a heating
system is a taxable maintenance and repair service to
tangible personal property.
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the furnace, oil burner, and
blower without paying sales tax to the vendor by issuing a
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
For the tax treatment of the cleaning and maintenance of
the interior duct work, see the Interior Sheet Metal section
of this guide.
See also Energy Ecient Heating, Cooling and Generating
Systems for information about an exemption from sales and
use taxes for solar energy electricity generating systems,
passive or active solar water or space heating systems,
geothermal resource systems, and ice storage systems used
for cooling.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
HOME ENTERTAINMENT/HOME
THEATER SYSTEMS
For services provided by a contractor, see Telephone,
Audio-Visual, Electrical, and Computer Cable or Wiring.
Components and Materials
Installation provided as part of the sale
When a retailer of televisions, audio equipment, and home
entertainment/theater systems sells the components and
also agrees to install those components into the customer’s
home or business, the retailer must collect sales tax on the
sale price of the components, including any delivery fees.
Installation Labor
The separately stated charges for the nonpermanent
installation labor and charges for connecting the individual
components are not subject to tax. However, charges for
any television calibration services are taxable whether
performed as part of the original setup and installation or
performed by a third party vendor.
Permanent Installation
If any of the wiring for the components or the sound system
will be permanently installed into the property where the
wire will be run behind walls, above the ceiling, or below
to real property.
The retailer does collect tax when performing permanent
installation services to:
• New construction
• Owner-occupied residential property
The retailer tax when performing permanent
installation services to:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
HOT TUBS, SPAS, AND SAUNAS
Installation of Stand-Alone Hot Tubs and Spas
Stand-alone hot tubs and spas include, but are not limited
to portable hot tubs and spas, move and plug-in hot tubs
and spas, and hot tubs and spas not permanently installed
into real property. The installation of a stand-alone hot tub
and spa is not a service to real property because the hot tub
and spa is considered to be tangible personal property and
follows the rules for installation labor for tangible personal
property. The installer is considered a retailer of hot tubs
42 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
and spas and purchases all materials exempt by issuing a
collects tax on the sale to the end customer.
The contractor does collect tax on separately
stated installation labor when installing the hot tub and
spa on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
There are stand-alone hot tubs and spas that require the
installation of a concrete pad, an electrical circuit, and a
gas line if the heater is to be fueled by gas. The installation
of these three items is a service to real property.
The contractor does collect tax on separately
stated installation labor when installing the concrete pad,
electrical circuit, and gas line in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the concrete
pad, electrical circuit, and gas line in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs to Stand-Alone Hot Tubs and Spas
Repairs include, but are not limited to replacing a cover
or repairing the vinyl or wood frame of the hot tub or spa.
The hot tub and spa contractor performing repair or
maintenance services can purchase integral parts for the
stand-alone hot tub and spa without paying sales tax to the
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the stand-alone hot tub
and spa repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Installation of Built-in Hot Tubs and Spas
The contractor pays tax on all purchases of
materials incorporated into the built-in hot tub and spa
including, but not limited to:
built-in lights lumber
cement pipes
lters pumps
heaters hot tub and spa kits
gravel tile
liners valves
The contractor does collect tax when
constructing the original built-in hot tub and spa in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The installation of a built-in hot tub and spa is considered a
use. Therefore, the original construction of a built-in hot
tub and spa, where a built-in hot tub and spa never existed
before, is considered a new construction contract.
Repairs to and Replacement of Built-In Hot
Tubs and Spas
The replacement of an existing built-in hot tub and spa is
not considered a site improvement and, therefore, follows
the rules for repairing a built-in hot tub and spa.
Repairs to built-in hot tubs and spas include, but are not
tiles, replacing or patching cracked linings, and replacing
The contractor pays tax on all purchases of
materials used in repairing the built-in hot tub and spa
including, but not limited to:
cement tile vinyl lining
The contractor does collect tax when repairing
or renovating a built-in hot tub and spa built on:
• Owner-occupied residential property
The contractor tax when repairing or
renovating a built-in hot tub and spa built on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 43
Cleaning and Maintenance to Both Stand-
Alone and Built-In Hot Tubs and Spas
The hot tub and spa cleaning and maintenance
contractor pays tax on all purchases of materials used in
cleaning or maintaining hot tubs and spas.
The contractor tax when performing
hot tub and spa cleaning and maintenance services to:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs to Hot Tub and Spa Filters, Heaters
and Pumps
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
except when performed under a service contract and no
additional charge is made for this repair.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
heater, or pump is subject to tax when these services are
performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services can
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
HOUSE WASHING
( Maintenance Services to Real Property Painting,
Staining, Varnishing, and Waterproong)
INCLINED STAIRWAY CHAIRLIFTS
Installations
A retailer of inclined stairway chairlifts sells tangible
personal property.
The retailer of inclined stairway chairlifts can purchase the
inclined stairway chairlifts without paying tax by using a
The sale of inclined stairway chairlifts for persons with
physical disabilities is exempt from sales and use taxes.
The installation of these inclined stairway chairlifts is also
exempt from sales and use taxes even if the installation
charge is not separately stated on the bill or invoice to the
customer.
The charges for installing the inclined stairway chairlift are
not taxable when installed in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repair or Maintenance Services Provided to
Inclined Stairway Chairlifts
Repair or maintenance services performed on inclined
stairway chairlifts for persons with physical disabilities are
exempt from sales and use taxes.
The contractor performing repair or maintenance services
can purchase integral parts without paying sales tax to the
or replacement parts for inclined stairway chairlifts are
integral part,
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11.
44 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
INSPECTIONS
( Structural Inspection)
INTERIOR DECORATORS
Interior design and decorating services include, but are not
limited to the selection, procurement, and arrangement of
the surface coverings, draperies, furniture, furnishings, and
other decorations for the interior of a home or building;
counseling with respect to the decorations; and incidental
services.
An interior designer may also be a retailer of
tangible personal property and must register with DRS to
collect sales and use taxes including the sale of items such
as draperies, furniture, furnishings, and other decorations
for the interior of a home or building in their charges to the
customer. If registered to collect sales and use taxes, the
interior designer may purchase these items on resale, but
must collect tax from their customer.
The interior design and decorating services are
subject to sales and use taxes.
INTERIOR SHEET METAL
(Duct work)
Installation
The sheet metal contractor pays tax on all
purchases of materials that will become part of the interior
duct work for the heating, air conditioning, and ventilation
systems.
The sheet metal contractor does collect tax
when installing the interior duct work in:
• New construction
• Owner-occupied residential property
The sheet metal contractor tax when installing
the interior duct work in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs, Cleaning, and Maintenance
The contractor does collect tax for the repairing,
cleaning, and maintenance of interior duct work when
performed in:
• New construction
• Owner-occupied residential property
The contractor tax for the repairing, cleaning,
and maintenance of interior duct work when it is performed
in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
JANITORIAL SERVICES
( Maintenance Services to Real Property)
Janitorial services mean cleaning the interior or exterior of
buildings, structures, or dwellings, whether residential or
industrial, commercial, or income-producing real property,
or the contents of the property. The services are of the type
performed by a janitor in the regular course of duty, and may
be performed alone or in conjunction with other services.
Janitorial services are performed either on a scheduled basis,
periodic basis or only on a single occasion, such as to a site
upon completion of construction or renovation. Janitorial
services include, but are not limited to:
carpet cleaning oor cleaning
(permanently and power washing
nonpermanently vacuuming
installed)* wall cleaning
ceiling cleaning waxing/polishing
disinfecting furniture
dusting woodwork cleaning
emptying waste baskets
* Carpet cleaning at the customer's premises is taxable
as a janitorial service. However, where non-permanent
carpeting is removed from the premises for cleaning,
the transaction is not taxable.
The janitorial service provider pays tax on all
purchases of materials including, but not limited to cleaning
supplies and cleaning solutions.
The janitorial service provider tax
when the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(Y)-1, Janitorial
Services, for related information.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 45
KITCHENS
Installation
Built-In Materials and Free Standing Appliances
The contractor pays tax on all purchases of
built-in materials and free standing appliances that will be
incorporated into the kitchen including, but not limited to:
Built-In Appliances
built-in dishwasher ducted hood
built-in microwave oven exhaust fan
built-in range faucets
built-in refrigerator garbage disposal
cabinets* sinks
counter tops
The contractor does collect tax when installing
these items in:
• New construction
• Owner-occupied residential property
The contractor tax when installing built-in
items in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
* Contractors installing cabinets should review
, Fabrication and Installation of Stock
and Custom Cabinets, to determine the proper tax
treatment.
Free Standing Appliances
clothes dryer dishwasher
microwave ovens oven
range refrigerator
washing machine
The installation of appliances that are not installed
into the real property, such as the appliances listed above
as free standing appliances, is considered installation of
tangible personal property. Separately stated charges for the
installation of tangible personal property are not taxable.
Repairs and Maintenance
Repair services to any electrical or electronic device are
taxable. These items include, but are not limited to:
built-in dishwashers exhaust fans
built-in microwave ovens garbage disposals
built-in ranges microwave ovens
built-in refrigerators ovens
clothes dryers ranges
ducted hoods refrigerators
dishwashers washing machines
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on any appliance;
• Repairs or maintenance of any appliance except when
performed under a service contract and no additional
charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for repairs and maintenance to electrical or
electronic devices is subject to tax regardless of whether
the repair takes place in the home or in a service center.
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for these appliances without
Integral parts purchased for use in performing services
under a are
not subject to tax unless a charge for the parts is made by
integral
part, see Repair or Maintenance of Tangible Personal
Property (Units) on Page 11. Also see Warranty Contracts
on Page 11 for more information on warranty contracts.
See Conn. Agencies Regs. §§ 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
12-407(2)(i)(Q)-1, Electrical and electronic repair services,
for related information.
LANDSCAPE ARCHITECTURAL
SERVICES
The functions normally involved in landscaping or
horticultural services are taxable no matter who provides
the services. However, services performed by a licensed
civil engineer or landscape architect are not taxable as
landscaping and horticultural services if those services
are normally considered to be part of civil engineering or
landscape architecture.
Examples of services considered to be part of civil
engineering or landscape architecture services and are
not taxable as landscaping and horticulture services when
46 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
performed by a licensed civil engineer or landscape architect
include site assessment and analysis, environmental impact
studies, master planning, preparation of wetland approval
packages, hydraulic or hydrologic analysis, preparation
of site layout or utility layout, preparation of storm water
management plans, preparation of design development
drawings, preparation of site plan approval packages,
preparation of site construction drawings, and meetings with
regulatory agencies governing design parameters.
See Conn. Agencies Regs. § 12-407(2)(i)(V)-1, Landscaping
and horticulture services, for related information.
LAND SURVEYING SERVICES
In general, land surveying services are not subject to sales
and use taxes. When a contractor purchases land surveying
services, the contractor is purchasing a nontaxable service.
However, if the contractor includes the land surveying
services on the bill to the property owner as a reimbursed
expense, the land surveying services become part of the gross
receipts for the contractor’s labor. Therefore, for example,
if the contractor is providing taxable renovation services to
commercial, industrial, or income-producing property, the
total service charge, including the reimbursement for land
surveying services, is subject to sales tax.
LANDSCAPING AND HORTICULTURE
SERVICES
These services include, but are not limited to the planting
of and caring for:
owers trees vegetables
fruits shrubs
Landscaping and horticulture services also include services
to lawns such as:
fertilizing mulching seeding
mowing raking weeding
Also, landscaping and horticulture services include
maintenance of exterior or interior plants such as:
pruning tree removal services
spraying tree trimming
other lawn and garden services
Excavating, land clearing, and rough grading services
performed as an integral part of a landscaping job are also
taxable as landscaping services. However, tree removal on
new building lots is an exempt land clearing service.
The services involved in the construction of the following
will also be treated as landscaping services:
irrigation/sprinkler systems
patios (other than poured concrete or asphalt)
walkways (other than poured concrete or asphalt)
driveways (other than poured concrete or asphalt)
Construction of poured concrete or asphalt patios and
walkways is treated as a paving service to real property and
time paving). However, repairing pavement and repaving
are taxable when performed on existing commercial,
industrial, or income-producing real property. See Paving.
The construction, remodeling or repair of ponds, fences,
gates, and walls (other than walls that are part of the
structure of a building) are presumed to be landscaping
services until the contrary is established.
For example, a service provider installing a fence around
a swimming pool in order to comply with a law requiring
that swimming pools be enclosed can establish that the
services performed are not landscaping services. Likewise,
building a retaining wall required by a city or town is not
a landscaping service. The construction, remodeling or
repair of chain-link fences and fences to contain livestock
on a farm are not considered landscaping services. The
non-landscaping services are not taxable when performed
on new construction or owner-occupied real property but
are taxable if performed on existing industrial, commercial,
or income-producing property.
* See Fencing on Page 36 and Silt Fencing on Page 56
for exceptions to landscaping services.
The tax treatment of materials and the total bill described
below apply to fences when they are treated as landscaping
services.
The landscaper/horticulturist may purchase
on a resale basis all the materials that will be physically
incorporated in or physically applied to the premises of
the service recipient in the delivery of landscaping and
horticulture services.
The landscaper/horticulturist tax
on the labor, installation, and the materials when the service
is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 47
Landscaping and horticulture services performed at the
residence of a person receiving total disability payments
under Social Security are not subject to tax. The landscaper/
horticulturist should obtain , Exemption for
Landscaping and Horticulture Services, Window Cleaning
Services, and Maintenance Services Provided to Recipients
of Total Disability Benets.
See Conn. Agencies Regs. § 12-407(2)(i)(V)-1, Landscaping
and horticulture services, for related information.
LOCKSMITH SERVICES
Locksmith services include repairing, servicing, or
installing locks and locking devices, whether the locks and
locking devices are incorporated into real property (such as
a deadbolt lock on a door to a building), are incorporated
into tangible personal property (such as a door lock on an
automobile), or are locks separate and apart from other
property (such as padlocks). Locksmith services also include
unlocking locks or locking devices when a customer is
unable to do so, such as when the key to a motor vehicle is
locked inside the vehicle. Locksmith services do not include
key making or sales of locks and locking devices, which are
taxable as sales of tangible personal property.
Locksmiths can be retailers of both goods and services.
When they sell goods at retail, tax must be collected from
the customer. The locksmith purchases these goods exempt
locksmith’s supplier. Some examples of the products sold
by a locksmith include, but are not limited to:
door knobs keys safes
hinges locks
A locksmith tax on both goods and services
when installing, repairing, or servicing locks and locking
devices on tangible personal property (for example, cars
and safes).
A locksmith tax on both goods and services
when installing, repairing, or servicing locks and locking
devices in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. §§ 12-407(2)(i)(T)-1, Locksmith
services, and 12-407(2)(i)(DD)-1, Repair or maintenance
services to tangible personal property and contracts of
maintenance, repair or warranty.
Any fees, such as service call charges, minimum charges,
charges, are taxable as charges for locksmith services.
A general contractor purchasing locksmith services may not
contractor’s labor is also a service listed as taxable in Conn.
Gen. Stat. § 12-407(a)(37).
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The locksmith can purchase integral parts without paying
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
MAILBOXES
Permanently Installed
An example of a permanently installed mailbox is one
installed on a post with a concrete base.
The contractor pays tax on all purchases of
materials including, but not limited to the mailbox and post.
The contractor does collect tax when
permanently installing the mailbox in:
• New construction
• Owner-occupied residential property
The contractor tax when permanently installing
the mailbox in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
48 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
MAINTENANCE SERVICES TO REAL
PROPERTY
Maintenance services means attending to the upkeep of,
caring for, or cleaning the exterior or interior of buildings,
dwellings, structures, and grounds located on any kind of
real property. These services are necessary to sustain or
property in good working order by preventing its decline,
failure, lapse, or deterioration.
Maintenance services include, but are not limited to:
brick washing chimney sweeping
cleaning gutters driveway sealing
pond dredging snow removal
stone washing dryer vent cleaning
house washing (power washing)
resurfacing clay tennis courts
The maintenance service provider pays tax on
the purchase of all cleaning supplies used in performing the
service. The maintenance service provider is considered the
consumer of these supplies.
The maintenance service provider tax
when the repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Maintenance services performed at the residence of a person
receiving total disability payments under Social Security are
not subject to tax. The contractor should obtain ,
Exemption for Landscaping and Horticulture Services,
Window Cleaning Services, and Maintenance Services
Provided to Recipients of Total Disability Benets.
See Conn. Agencies Regs. § 12-407(2)(i)(X)-1, Maintenance
services, for related information.
MANAGEMENT
Construction Management
Construction managers are usually contracted to oversee
the day-to-day operations of all the contractors involved in
a construction contract. They verify that all the contractors
and subcontractors are performing their services punctually
and in accordance with building codes and construction
plans.
The construction manager does collect tax when the
service is performed for:
• New construction
• Owner-occupied residential property
The construction manager tax when the service
is performed for:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Property Management
A property manager is engaged to oversee the day-to-day
operations of real property. This usually encompasses
contracting for services that are an integral or inseparable
part of the property management service, such as electrical,
plumbing, landscaping, snow plowing, maintenance,
janitorial, and any other services needed to maintain or
repair the property. The property manager is allowed to
purchase these services on a resale basis as long as the
services will be resold to the property owner. The property
manager must collect tax on any of the taxable services
for its proper tax treatment.
The property manager tax when performing
management services for:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The amount charged for the separately stated compensation,
or assessments paid to or on behalf of an employee of a
property management company is not subject to tax if the
following three conditions are met. The employee:
• Is employed directly by the property management
company;
• Is doing the work that its employer is obligated to
perform under an agreement to manage a client’s real
property;
• Works solely for one client at one location.
See , Sales and Use Tax on Charges
Made By Service Providers After Air Kaman, Inc. v. Groppo,
and 1992 Conn. Pub. Acts 17 (May Spec. Sess.).
MASONRY
( Brickwork/Stonework)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 49
MOLD REMEDIATION
Mold remediation services are subject to sales and use taxes
if these services are performed to existing commercial,
industrial or income-producing real property.
Mold remediation services performed to residential real
property are taxable.
MOVING A STRUCTURE
The contractor pays tax on all materials used in
performing its service.
The contractor does collect tax when moving:
• Owner-occupied residential property
The contractor tax when moving:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
OUTDOOR LIGHTING
The contractor pays tax on all purchases of
materials that become part of outdoor lighting.
The contractor does collect tax when installing
outdoor lighting on:
• New construction
• Owner-occupied residential property
The contractor tax when installing outdoor
lighting on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
PAINTING, STAINING, VARNISHING, AND
WATERPROOFING
These services include the painting or repainting of all
interior and exterior surfaces of real property for decoration,
protection, or preservation purposes. Also included is all
line painting on paved surfaces, such as parking lots and
tennis courts, but excluding line painting on paved surfaces
of public rights-of-way.
These services also include all necessary surface and other
preparations prior to the actual painting, where performed
as part of the entire job, such as:
applying sealants power washing
applying waterproong puttying
or other protective nish sanding
spackling taping
planing
The painting contractor pays tax on all purchases
of materials including, but not limited to:
paint spackling compound
putty tape
sealants
The painting contractor doescollect tax when
performing painting services on:
• New construction
• Owner-occupied residential property
The painting contractor tax when performing
painting services on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(I)-1, Services to
real property, for related information.
PAPER SHREDDING
( Refuse Removal)
Paper shredding services are refuse removal services, which
are services to real property that are taxable when provided
to existing commercial, industrial or income-producing
real property.
The paper shredding company pays tax on all
materials used in performing its service. Containers and
shredding equipment that are the property of the paper
shredding company cannot be purchased on a resale basis.
The paper shredding company is the consumer of these
items and must pay tax on them even though the paper
shredding company may bill the customer for rental of a
container. Therefore, charges for the rental of a container
are considered part of paper shredding services and are
taxed accordingly.
50 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
See , Refuse and Sanitary Waste
Removal Companies.
The paper shredding company does collect tax
from the customer for paper shredding services performed on:
• New construction
• Owner-occupied residential property
If the paper shredding company brings a mobile paper
shredder to the customer’s location to shred documents
and cart the shredded paper away or the paper shredding
company picks up documents in locked barrels from the
customer’s location and removes them to its facility, where
the paper shredding company shreds the documents and
disposes of them, including charges for hauling or container
rental, the paper shredding company tax from
the customer for paper shredding services performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
If the customer brings documents to a service provider’s
location to be shredded, the charge to the customer is not
taxable. Also, if a paper shredding company brings a mobile
shredder to a customer’s location but leaves the shredded
documents at the customer’s location for the customer to
dispose of, the charge to the customer is not taxable.
PATIO
( Landscaping and Horticulture Services)
PAVING
( Maintenance Services to Real Property)
Paving involves covering the ground with a hard smooth
surface such as:
asphalt macadam
poured concrete tar
Paving includes the replacement of sections or the complete
repaving of:
basketball courts tennis courts
driveways walkways
parking areas patios
Paving does not include covering driveways, parking areas,
and walkways with materials such as crushed stone, crushed
stone with oil, or gravel. However, these services are taxable
when performed on existing commercial, industrial, and
income-producing property.
Paving services do include all preparatory work, where
performed as part of the entire job, as well as the subsequent
sealing or dressing of the pavement.
Initial Installation
The paving contractor pays tax on all purchases
of materials including:
asphalt macadam
concrete tar
The contractor does collect tax when a
Therefore, if the contractor is putting in a driveway, parking
lot, or walkway at a new construction site or paving for the
originally constructed of dirt, loose stone, or gravel, the
labor is subject to tax on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repair or Replacement (of an existing paved
driveway, parking lot, or walkway)
The paving contractor pays tax on all materials
purchased to repair or replace an existing paved driveway,
parking lot, walkway, basketball court, or tennis court.
The contractor tax on the labor to
repair or replace existing pavement on:
• New construction of commercial, industrial, and
income-producing real property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The contractor does collect tax on the labor to repair or
replace existing pavement on:
• Owner-occupied residential property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 51
PEST CONTROL
( Exterminating)
PLUMBING
Plumbing includes, but is not limited to installation or
replacement of:
piping systems shower stalls
sinks and necessary sink toilets and necessary
xtures toilet xtures
tubs and necessary tub enclosures
tub xtures
Plumbing also includes:
xing leaking pipes unclogging drains
thawing frozen pipes repairing sinks, toilets,
and tubs
The plumbing contractor pays tax on all
purchases of materials including, but not limited to:
shower stalls tubs
shower heads
The plumbing contractor does collect tax when
performing plumbing services to:
• New construction
• Owner-occupied residential property
The plumbing contractor tax when performing
plumbing services to:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Plumbing contractors who perform repair and maintenance
services to heating and air conditioning units, garbage
disposals, sump pumps, and well pumps should consult
the appropriate sections of this guide for the proper tax
treatment.
POWER WASHING
( Maintenance Services to Real Property)
PRECAST CONCRETE OR CEMENT
STEPS
( Standard Units of Equipment)
PROTECTION, PATROL WORK, AND
WATCHMAN SERVICES
Protection, patrol work, and watchman services include, but
are not limited to guarding and patrolling construction sites
generally taxable. However, if they are provided directly to
services, by their nature, can only be provided by licensed
The protection, patrol work, or watchman
contractor pays tax on all purchases of materials and
equipment that will be used to perform the services.
The protection, patrol work, and watchman
contractor tax when performing services to:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Protection, patrol work, and watchman services may be
purchased on resale by a contractor providing services listed
as taxable in Conn. Gen. Stat. § 12-407(a)(37) to existing
commercial, industrial, or income-producing property, or
landscaping services to any type of property.
A public right-of-way is not considered commercial,
industrial, or income-producing property. A public right-
of-way is property such as a state or municipal street or
road and adjacent area. A contractor providing services to
a public right-of-way (such as repaving a state road) cannot
purchase protection, patrol work, or watchman services on
a resale basis. The contractor must pay tax on this purchase.
REFUSE REMOVAL
( Paper Shredding)
Refuse removal services include the carting, hauling and
disposal of worthless or unwanted property including
garbage, special handling waste, scrap, leaf piles, and
sanitary waste, which include septic system cleaning,
clearing septic tank lines, pumping cesspools, pumping dry
wells, and pumping septic tanks.
52 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The removal, carting or hauling, for a charge, of any
property that is unwanted by the service recipient, regardless
of the fact that the property may have a subsequent sales
value, constitutes a refuse removal service. Examples of
such property include removal, with or without disposal, of
computers, electronics, scrap metals, recyclable materials
or used tires.
The refuse removal company pays tax on all
materials used in performing its service. Garbage cans,
containers, and dumpsters that are the property of the refuse
removal company cannot be purchased on a resale basis.
The refuse removal company is the consumer of these items
and must pay tax on them even though the refuse removal
company may bill the customer for rental of a container.
Therefore, charges for the rental of a container are included
in taxable receipts from refuse removal services.
See , Refuse and Sanitary Waste
Removal Companies.
The refuse removal company does collect tax
to the customer for refuse removal services performed for:
• New construction
• Owner-occupied residential property
The refuse removal company tax to the
customer for refuse removal services, including charges
for hauling, container or dumpster rental, or dumping fees
performed for:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Refuse removal services for construction sites may be
purchased on resale by a contractor providing services listed
as taxable in Conn. Gen. Stat. § 12-407(a)(37)(I) to existing
commercial, industrial, or income-producing property.
RETAINING WALLS
( Landscaping and Horticulture Services)
ROOFING
Initial Installation (New construction)
incorporated into the roof including, but not limited to:
asphalt slate metal
tile shingles wood
collect tax when
the initial roof is installed on:
• New construction
• Owner-occupied residential property
Installation, Repair, and Replacement (Existing
real property)
the replacement of an entire roof, and the repair of a roof,
when performed as part of an entire job.
The services also include the replacement of roof rafters,
plywood, wood or other covering, ventilation work,
and snow slides.
gutters or the replacement of old gutters on existing real
property, the repair or cleaning of chimneys, the cleaning
of all types of roof systems such as gutters, downspouts
and drains, and the repair or replacement of items such as
copings, cornices, electric heating tape, gravel stops and
fascias, gutters and downspouts, heating cables, louvers
and screens, metal ornaments, metal stacks, and skylights.
However, some of these services, such as cleaning
chimneys, gutters, downspouts, and drains, are taxable as
maintenance services to real property. See Maintenance
Services to Real Property on Page 48.
of materials that will be incorporated into the job.
collect tax when
• Owner-occupied residential property
tax when installing
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. §§ 12-407(2)(i)(I)-1, Services to
real property, and 12-407(2)(i)(X)-1, Maintenance services,
for related information.
ROOF WARRANTIES
taxable. If the shingles are found to be defective after being
installed, the extended warranty covers the entire cost of
new shingles and the labor to install them. The shingle
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 53
company will supply the shingles and pay a contractor
to install new shingles. No additional sales tax is due
on labor or tangible personal property needed in such
replacement because the tax is deemed to have been paid at
the time of the purchase of the extended warranty contract.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property and
contracts of maintenance, repair or warranty, for related
information.
Sale of a Warranty for Roof Service
The sale of a warranty contract to service a roof is not
taxable, regardless of whether the warranty contract covers
new construction, existing residential property, or existing
commercial, industrial or income-producing real property.
If sold with the installation of a roof, the warranty contract
stated, and the price of the warranty must be reasonable and
in line with industry-standard pricing.
The warrantor or its subcontractor is the
pay tax when purchasing such materials.
• If the warrantor itself performs the repairs without
making any charges, the services are not taxable for
new construction, owner-occupied residential property,
or existing commercial, industrial, or income-producing
property.
• If the warrantor makes any charges for services to repair
the roof, the warrantor does collect tax when the
service is performed on:
New construction
Owner-occupied residential property
The warrantor tax when the service is
performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
If the warrantor hires a subcontractor to perform repairs, the
pay tax to the subcontractor when the service is performed
on:
• New construction
• Owner-occupied residential property
The subcontractor tax when the service is
performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
When
the contractor bills an amount to the property owner for
servicing the roof that is not covered under the warranty
contract, such as a deductible or an amount over a maximum
coverage contained in the warranty contract.
The contractor does collect tax when the service is
performed on:
• New construction
• Owner-occupied residential property
The contractor tax when the service is
performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SANDBLASTING
The contractor pays tax on all purchases of
materials consumed in performing sandblasting services.
The contractor does collect tax when
sandblasting on:
• New construction
• Owner-occupied residential property
The contractor tax when sandblasting on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SAUNAS
( Hot Tubs, Spas, and Saunas)
SCAFFOLDING AND SIDEWALK
BRIDGING
of tangible personal property.
54 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
sidewalk bridging are not subject to tax when placed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
amount charged for the lease and installation is taxable even
if the installation charges are separately stated on the bill.
See Conn. Agencies Regs. § 12-426-25.
SEPTIC SYSTEMS
( Standard Units of Equipment)
Installation
Installation of septic systems includes, but is not limited
to installation of:
distribution boxes lines and pipes
dry wells seepage pits
grease traps septic tanks
leach elds
The contractor pays tax on all purchases of
materials that become part of the septic system.
The contractor does collect tax on the
installation of a septic system in:
• New construction
• Owner-occupied residential property
The contractor tax on the installation of a
septic system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The services of repairing or replacing the septic system
follows the taxation rules for installation.
SEPTIC SYSTEM CLEANING
Septic system cleaning includes, but is not limited to:
clearing septic lines pumping cesspools
pumping dry wells pumping septic tanks
The contractor does collect tax on septic system
cleaning when it is performed on:
• New construction
• Owner-occupied residential property
The contractor tax on septic system cleaning
when it is performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SHEDS AND GAZEBOS
Prefabricated
A retailer of prefabricated sheds or gazebos is considered to
be selling tangible personal property. See Temporary Sheds,
Buildings, and Trailers on Page 10.
The manufacturer can purchase lumber and materials for
The retailer of prefabricated sheds or gazebos
tax on the completed units.
Separately stated charges for installing prefabricated sheds
or gazebos are subject to tax when the sheds or gazebos
are placed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repair and maintenance services to prefabricated sheds and
gazebos that remain tangible personal property are subject
to tax as repairs to tangible personal property.
Constructed on Site
A contractor that builds a shed or gazebo on the customer’s
site is performing a service to real property.
The contractor pays tax on all purchases of
materials including, but not limited to lumber and building
supplies, concrete, or wiring.
The contractor does collect tax when
constructing a new shed or gazebo on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 55
Repairs and Maintenance
In general, a contractor does not collect tax when repairing
or renovating a shed or gazebo that is real property on:
• Owner-occupied residential property
The contractor tax when repairing or
renovating a shed or gazebo that is real property on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SHEET METAL
( Interior Sheet Metal Exterior Sheet Metal Work)
SIDING
Siding services include the replacement or repair of an
outside wall or wall covering, such as insulated board or
plywood sheathing, done in connection with siding. Siding
services also include all the work performed in preparation
for siding when performed as part of the entire job.
The contractor pays tax on all purchases of
siding materials including, but not limited to:
aluminum siding shingles
brickface stucco
clapboards vinyl
exterior shutters
shakes and other wood coverings
The siding contractor does collect tax when
installing siding on:
• New construction
• Owner-occupied residential property
The siding contractor tax when installing the
siding on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(I)-1, Services to
Real Property, for related information.
SIGNS
Permanently Installed
to real property including, but not limited to electrically
lighted signs bolted to the fronts of buildings, signs installed
on concrete bases and poles, and construction of billboards
(not including the advertising placed on them).
The contractor pays tax on all purchases of
materials including, but not limited to the sign, concrete,
wiring, lumber, and building supplies.
The contractor does collect tax when
permanently installing the sign on:
• New construction
• Owner-occupied residential property
The contractor tax when permanently installing
the sign on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Not Permanently Installed
Examples of signs not permanently installed include, but are
not limited to real estate for-sale signs placed temporarily in
the ground, easily movable free standing signs, and business
signs placed in store windows. Signs permanently
installed are tangible personal property. The sale of signs
that are not permanently installed is taxable. Charges for
the installation of signs that are not permanently installed
are taxable separately stated.
SIGN PAINTING AND LETTERING
SERVICES
Sign painting and lettering services include painting and
lettering of indoor or outdoor signs, painting and lettering
of names, trademarks, or logos on store fronts, buildings,
billboards, motor vehicles, concrete, and marble. These
services are generally performed on real property, tangible
personal property owned by the customer or on signs
provided by the customer.
The sign painter pays tax on all purchases of
materials.
56 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The sign painter tax when the service is
performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
The manufacture and sale of a separate sign by a company
that does not install the sign is not a painting and lettering
service or service to real property, but the sale of tangible
personal property. See Tangible Personal Property on
Page 10.
SILT FENCING
Silt fencing is installed around a construction site as an
erosion control measure. When the construction is complete,
the silt fencing is removed.
The silt fencing contractor pays tax on all
purchases of materials.
The contractor does collect tax when installing
the silt fence on:
• New construction
• Owner-occupied residential property
The contractor tax when installing the silt
fence on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SNOW PLOWING/REMOVAL
( Maintenance Services to Real Property)
SPAS
( Hot Tubs, Spas, and Saunas)
SPRINKLER SYSTEMS (INTERIOR)
(Landscaping and Horticulture Services
)
The installation of sprinkler systems inside a building, such
The contractor pays tax on all purchases of
materials that become part of the interior sprinkler systems.
Examples of materials are:
sprinkler heads thermostats
piping valves
The contractor does collect tax when installing
a sprinkler system inside a building in:
• New construction
• Owner-occupied residential property
The contractor tax on the services to install
interior sprinkler systems in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
For the construction of sprinkler systems and irrigation
systems installed outside a building, see Landscaping and
Horticulture Services on Page 46.
STAINING
( Painting, Staining, Varnishing, and Waterproong)
STANDARD UNITS OF EQUIPMENT
Installation
The sale of complete units of standard equipment
is generally a sale of tangible personal property.
Examples of standard units of equipment are:
awnings septic tanks*
hatchways stock cabinets
precast concrete or cement steps
The contractor purchases the standard units of equipment
on resale. The contractor collects tax on the sale of the
standard units of equipment. The contractor does not apply
tax to a separately stated charge to install the standard units
of equipment.
The contractor does collect tax on the
installation of complete standard units of equipment when
the service is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 57
However, if the installation of complete units of standard
equipment is part of an overall construction contract to real
property, the installation charges are considered a service
to real property.
A contractor installs stock cabinets in the course
of performing renovations to an employee cafeteria in an
the contractor.
The contractor does collect tax when performing these
services on:
• New construction
• Owner-occupied residential property
The contractor tax when performing these
services on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
* A septic tank is a complete unit of standard equipment
and, if the tank alone is being installed, the installation
charges are exempt.
If a septic tank is being installed as part of an overall
septic system installation, the installation of the septic
tank is a service to real property. See Septic Systems,
Installation on Page 54.
Repairs and Maintenance
Service to repair or maintain an installed unit of standard
equipment is a service to real property.
The contractor does collect tax when performing these
services on:
• Owner-occupied residential property
The contractor tax when performing these
services on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Awnings for taxability of repair or maintenance services
for awnings that have been removed from a building or
structure.
Contractors installing cabinets should review
, Fabrication and Installation of Stock and
Custom Cabinets, to determine the proper tax treatment.
STOCK CABINETS
( Standard Units of Equipment)
STONEWORK
( Brickwork/Stonework)
STRUCTURAL INSPECTION
The contractor does collect tax when performing
structural inspection services for:
• New construction
• Owner-occupied residential property
The contractor tax when performing structural
inspection services for:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
SUMP PUMPS
Permanent Installation
The contractor pays tax on all purchases of
materials including, but not limited to the pipe, the pump
The contractor does collect tax when
permanently installing a sump pump in:
• New construction
• Owner-occupied residential property
The contractor tax when permanently installing
a sump pump in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the sump pump system;
• Repairs to or maintenance of the sump pump, except
when performed under a service contract and no
additional charge is made for the repair.
These parts include, but are not limited to:
connectors motors
electrical cords oats
pump suction heads and shuto switches
58 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when services to the sump
pump are performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services can
purchase integral parts for the sump pump system without
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
The service of repairing the piping part of the sump pump
system follows the taxation rules for permanent installation.
SWIMMING POOLS
(Hot Tubs, Spas, and Saunas)
Installation of Above Ground Pools
The installation of an above ground pool is not a service to
real property because the pool is considered to be tangible
personal property and, thus, follows the rules for installation
labor for tangible personal property. The installer is
considered a retailer of swimming pool kits and purchases
contractor’s supplier. The installer collects tax on the sale
to the end customer.
The contractor does collect tax on separately
stated installation labor when installing the above ground
pool on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs to Above Ground Pools
Repairs include, but are not limited to replacing a ripped
lining or repairing the vinyl, aluminum, or wood frame of
the pool.
The contractor performing repair or maintenance services
can purchase integral parts for the above ground pool without
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill is subject to tax when the above ground pool
repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Installation of Inground Pools
The installation of an inground pool is considered a site
use. Therefore, the original construction of a pool, where a
pool never existed before, is considered a new construction
contract.
The contractor pays tax on all purchases of
materials incorporated into the swimming pool including,
but not limited to:
built-in lights lumber
cement pipes
lters swimming pool kits
gravel tile
liners
The contractor does collect tax when
constructing the original pool in:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 59
Repairs to and Replacement of Inground Pools
The replacement of an existing inground pool is not
considered a site improvement and, therefore, follows the
rules for repairing an inground pool.
Repairs to inground pools include, but are not limited
replacing or patching ripped linings, and replacing built-in
The contractor pays tax on all purchases of
materials used in repairing the inground pool including,
but not limited to:
cement tile vinyl lining
The contractor does collect tax when repairing
or renovating an inground pool built on:
• Owner-occupied residential property
The contractor tax when repairing or
renovating an inground pool built on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Cleaning and Maintenance to Both Above
Ground and Inground Pools
Swimming pool cleaning and maintenance services include,
but are not limited to:
chemically treating the pool chlorinating the pool
opening the pool shock treatment
for the season
skimming the pool vacuuming the pool
winterizing the pool
The swimming pool cleaning and maintenance
contractor pays tax on all purchases of materials used in
cleaning or maintaining pools.
The contractor tax when performing
swimming pool cleaning and maintenance services to:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(AA)-1, Swimming
pool cleaning and maintenance services.
Repairs to Pool Filters
The contractor tax on:
• The sale or renewal of a repair, maintenance or warranty
performed under a service contract and no additional
charge is made for this repair.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property and
contracts of maintenance, repair or warranty.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
subject to tax when these services are performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See also Fencing on Page 36.
TELEPHONE, AUDIO-VISUAL, AND
COMPUTER CABLE OR WIRING
( Home Entertainment/ Home Theater Systems)
Permanent Installation
Permanently installed means the cable or wire is built into
the real property. Where wiring or cabling is run behind a
not obvious and it is not readily accessible, the installation is
a service to real property and not the installation of tangible
60 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
personal property. In addition, for the same reason, the
removal of permanently installed wiring or cabling is also
a service to real property.
The contractor pays tax on all purchases of
material including, but not limited to the cable or wire and
wall outlets.
The contractor does collect tax when
permanently installing cable or wiring in:
• New construction
• Owner-occupied residential property
The contractor tax when permanently installing
cable or wiring in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
However, separately-stated charges to install telephone,
audio-visual, and computer cable or wiring from the wall
to the equipment is not taxable as a service to real property
because it is not permanently installed into real property.
TESTING FOR CONTAMINANTS
( Environmental Services)
Services for the evaluation, prevention, treatment,
containment or removal of hazardous waste or other
contaminants of air, water or soil to existing commercial,
industrial or income-producing real property are taxable,
whether voluntary or involuntary. See ,
Certain Environmental Services Excluded from Sales and
Use Taxeshazardous
waste and other contaminants that remains applicable,
despite the repeal of the exclusion for environmental
services performed voluntarily.
Testing for the presence of contaminants such as radon,
asbestos, and lead is not subject to tax when performed on:
• New construction
• Owner-occupied residential property
• Samples pulled from locations outside of Connecticut
Testing for the presence of contaminants such as radon,
asbestos, and lead is subject to tax when performed on
samples pulled from locations within Connecticut:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
UNDERGROUND CABLES
The installation or repair of underground cable is a service
to real property.
The contractor pays tax on all purchases of
materials used to install or repair underground cable.
The contractor does collect tax when repairing
or installing underground cable in:
• New construction
• Owner-occupied residential property
• Real property located within a public right-of-way
The contractor tax when repairing or installing
underground cable in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
For services performed on public rights-of-way, see Page 13.
UNDERGROUND PET BARRIER
SYSTEMS, COMMONLY KNOWN AS
INVISIBLE FENCING
( Fencing)
The installation contractor pays tax on the
purchase of materials and supplies that will be incorporated
into, or used in installing, the underground pet barrier
system.
The contractor does collect tax when installing
the underground pet barrier system on:
• New construction
• Owner-occupied residential property
The contractor tax when installing the
underground pet barrier system on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
UNDERGROUND STORAGE TANKS
Underground storage tanks include, but are not limited to:
gasoline storage tanks
heating oil storage tanks
propane storage tanks
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 61
Installation
A retailer of underground storage tanks is considered to be
selling tangible personal property.
The retailer of underground storage tanks can purchase the
retailer of underground storage tanks must charge tax on
the sale of the tanks.
Separately stated charges for installing the underground
storage tanks are not subject to tax. The removal of
underground storage tanks is not subject to tax.
A septic tank is not an underground storage tank. See also
Septic Systems on Page 54 and Standard Units of Equipment
on Page 56.
VARNISHING
( Painting, Staining, Varnishing, and Waterproong)
VENTILATION SYSTEMS
(Clean Room/HVAC Systems)
Installation
Ventilation systems include, but are not limited to:
attic fans roof vents exhaust fans
The contractor pays tax on all purchases of
materials including but not limited to:
duct work shutters
electrical switches fan units
The contractor does collect tax for permanently
installing a ventilation system in:
• New construction
• Owner-occupied residential property
The contractor tax for permanently installing
a ventilation system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance of Fan Units
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the ventilation system;
• Repairs or maintenance of the fan units, except when
performed under a service contract and no additional
charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for maintenance and repairs to ventilation
system fan units is subject to tax when the services are
performed to:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairing the duct work follows the taxation rules for
installation.
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the fan units without paying
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
WALLPAPERING
Wallpapering means the application of wallpaper or wall
fabric to interior walls and ceilings. The services also
include all necessary preparations prior to the wallpapering,
such as removing old wallpaper, steaming, puttying, taping,
spackling, and sizing.
The wallpapering contractor pays tax on all
purchases of materials including but not limited to:
paste tape
spackling compound wallpaper
The contractor does collect tax when performing
wallpapering services on:
• New construction
• Owner-occupied residential property
62 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The contractor tax when performing
wallpapering services on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
See Conn. Agencies Regs. § 12-407(2)(i)(I)-1, Services to
real property, for related information.
WALLS
( Landscaping and Horticulture
Services)
Installation of Interior Walls
The contractor pays tax on all purchases of
materials used to install interior walls into the structure
including, but not limited to:
baseboard molding insulation
ceramic tile sheet rock
drywall wallboard
grout wood paneling
The contractor does collect tax when installing,
insulating, or repairing walls in:
• New construction
• Owner-occupied residential property
The contractor tax when installing, insulating,
or repairing walls in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Also see Painting, Staining, Varnishing, and Waterproong
on Page 49.
WARRANTY CONTRACTS FOR REAL
PROPERTY
( Roof Warranties)
Home warranties (sometimes called Home Service
Contracts) provide that the warrantor will service, repair, or
replace certain operational or structural failures in a home
located on residential real property for a certain period of
time. The warranties cover various systems and appliances,
such as electrical systems, heating systems, air-conditioning
systems, interior plumbing, waters heaters, dishwashers,
microwaves, and refrigerators. The warranties may also
cover additional systems and appliances located at the
residential real property, such as swimming pools, septic
systems, and well pumps.
The sale of a warranty contract for residential real property
that is being used as income-producing real property is
subject to sales and use taxes on the entire price of the
warranty. The sale of a warranty contract for owner-
occupied real property is subject to sales and use taxes to
the extent that the warranty provides for repairs to tangible
personal property or electrical devices.
See for more details.
WATER HEATERS
Installation
The contractor pays tax on the hot water heater,
piping, and on all materials used in the installation.
The contractor does collect tax when installing
the hot water heater in:
• New construction
• Owner-occupied residential property
The contractor tax when installing the water
heating system in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the hot water heater;
• Repairs to or maintenance of the hot water heater,
except when performed under a service contract and
no additional charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for cleaning, maintenance and repairs to the hot
water heater is subject to tax when the repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 63
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the hot water heater without
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See also Energy Ecient Heating, Cooling and Generating
Systems for information about an exemption from sales and
use taxes for solar energy electricity generating systems,
passive or active solar water or space heating systems,
geothermal resource systems, and ice storage systems used
for cooling.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property and
contracts of maintenance, repair or warranty.
WATERPROOFING
( Painting, Staining, Varnishing, and Waterproong)
WELDING
A welder may operate as a contractor, repairer of tangible
personal property, or a retailer of fabrication labor. A
welder performing services to real property is operating
as a contractor.
Welder as Contractor
The welder pays tax on all purchases of materials
including, but not limited to, welding rods and solder.
The welder does collect tax when welding
services are performed on:
• New construction
• Owner-occupied residential property
The welder tax when welding services are
performed on:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Welder as Repairer of Tangible Personal
Property
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for welding repairs to tangible personal
property is subject to tax.
Integral Parts
The welder performing repair or maintenance services
can purchase integral parts without paying sales tax to the
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
Welder as Retailer of Fabrication Labor
The welder purchases materials that will be
Fabrication labor is the labor required
product.
to tax.
There are special rules for welding as part of the manufacturing
process. See ,
Sales
and Use Taxes Guide for Manufacturers, Fabricators, and
Processors.
WELLS AND PUMPS
Installation
The contractor pays tax on all purchases of
materials including, but not limited to:
lters pipe well pumps
The contractor does collect tax when installing
the well in:
• New construction
• Owner-occupied residential property
64 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
The contractor tax when installing the well in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Repairs and Maintenance of Pumps
The contractor tax on:
• The sale or renewal of a repair, maintenance, or
warranty contract on the well pump;
• Repairs to or maintenance of the well pump except when
performed under a service contract and no additional
charge is made for the repair.
The bill to the customer should be broken down into two
components:
• Integral parts
• Labor
The total bill for cleaning, maintenance, and repairs to the
well pump is subject to tax when the repair is performed on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Integral Parts
The contractor performing repair or maintenance services
can purchase integral parts for the well pump without paying
Integral parts purchased for use in performing services
under a are not
subject to tax unless a charge for the parts is made by the
see Repair or Maintenance of Tangible Personal Property
(Units) on Page 11. Also see Warranty Contracts on Page 11
for more information on warranty contracts.
See Conn. Agencies Regs. § 12-407(2)(i)(DD)-1, Repair
or maintenance services to tangible personal property
and contracts of maintenance, repair or warranty, and
Conn. Agencies Regs. § 12-407(2)(i)(Q)-1, Electrical and
electronic repair services.
Replacement of Well Pumps
The contractor pays tax on all purchases of
materials.
The contractor does collect tax when replacing
the well pump in:
• New construction
• Owner-occupied residential property
The contractor tax when replacing the well
pump in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
WINDOWS
Installation and Replacement
The contractor pays tax on all purchases of
materials including, but not limited to the window, the
frame, putty, caulking, and all the accompanying hardware.
The contractor does collect tax when installing
or replacing windows in:
• New construction
• Owner-occupied residential property
The contractor tax when installing or replacing
windows in:
• Existing commercial property
• Existing industrial property
• Existing income-producing property
For painting windows, see Painting, Staining, Varnishing,
and Waterproong.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 65
WINDOW CLEANING
Window cleaning services means cleaning windows and
exterior and interior glass when performed on any real
property.
The window cleaner pays tax on the purchase of all cleaning
supplies. The window cleaner must collect tax on the total
charge for window cleaning when the service is performed
on:
• New construction
• Owner-occupied residential property
• Existing commercial property
• Existing industrial property
• Existing income-producing property
Window cleaning services performed at the residence of
a person receiving total disability payments under Social
Security are not subject to tax. The contractor should obtain
, Exemption for Landscaping and Horticulture
Services, Window Cleaning Services, and Maintenance
Services Provided to Recipients of Total Disability Benets.
See Conn. Agencies Regs. § 12-407(2)(i)(W)-1, Window
cleaning services, for related information.
WINDOW TREATMENTS
The installation of window treatments (such as interior
shutters, curtains, blinds and shades) is not considered
a service to real property. The sale of interior window
treatments is taxable as a sale of tangible personal property.
A separately stated charge for installing the items is not
taxable.
WIRING
( Telephone, Audio-Visual, and Computer Cable or
Wiring)
66 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 67
Appendix
68 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 69
• SC bills GC for:
Bills
materials); and
• SC services (service charges include
markup on materials, overhead expenses,
reimbursed expenses, labor charges and profit).
• GC bills property owner for:
• SC's and GC's materials
SC to their vendors);
• SC's and GC's services; and
• Sales tax on taxable services.
Resale Certificate and Process Flow
Bills
• Materials consumed (including tax paid on
Resale Certificate
Property Owner
• GC issues a resale
certificate to SC for
the service portion
of the bill.
Bills
(including tax paid on materials by
Vendor
Subcontractor (SC)
General Contractor (GC)
• The SC is the consumer of the materials used in
fulfilling construction contracts. SC pays sales tax to
vendor on its purchases of materials, or self-assesses use
tax when it withdraws materials from its inventory on its
Form OS-114, Sales and Use Tax Return .
70 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 71
Materials purchased (including taxes paid) 60,000.00$
SC services 30,000.00$
Total 90,000.00$
SC's materials (including taxes paid) 60,000.00$
GC & SC services 40,000.00$
Sales tax on services x 6.35% 2,540.00$ 60,000.00$
Total 102,540.00$ 30,000.00$
10,000.00$
100,000.00$
Materials
Materials - SC (includes tax paid by SC's to vendors) 60,000.00$
Services
SC's services 30,000.00$
GC's services 10,000.00$
Total services 40,000.00$
Sales tax on services x 6.35% 2,540.00$
Total 102,540.00$
Total reported on Line 3
Reported on GC's Form OS-114,
Deductions Line A, Other Adjustments -
sales of goods
See sample general contractor sales tax return on pages 74-75.
A contractor's service charge, sometimes referred to as the labor charge, is determined by subtracting the cost of materials
(including tax paid on materials) from the total contract price. In other words, every cent above the contractor's cost of
materials physically incorporated into the real property, plus the tax paid on those materials, is considered the service charge.
See Service Charge on Page 14.
See sample subcontractor sales tax return on pages 72-73.
Materials (taxes paid)
GC's books:
SC's services (without tax)
GC's services (without tax)
Reported on GC's Form OS-114, Line 3:
SC's bill to GC:
Reported on SC's Form OS-114, Deductions
Line 17, Sales for resale - labor and services
Reported on SC's Form OS-114, Line 3
General Contractor (GC)
GC's bill to commercial property owner:
Reported on SC's Form OS-114, Deductions
Line A, Other Adjustments - sales of goods
Example 1
Facts
• This is a taxable renovation to commercial property.
• All materials for this job are purchased by the subcontractors (SC).
• Tax is paid by SC's on their materials at the time of purchase.
• General contractor (GC) issues resale certificates to SC's for taxable services.
• Materials consumed, including tax paid on the materials;
• Sales tax on the service portion of the bill.
• GC separately states the charges to the property owner as follows:
• Service charges, including markup on materials, overhead expenses, labor charges,
tool or equipment purchase or rental, including tax paid on the rental, and profit; and
Bills & Books
Subcontractor (SC)
72 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 1
(Subcontractor’s Return)
90,000
90,000
90,000
0
0
0
0
0
S A M P L E
S A M P L E
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
and
• The subcontractor’s service charge
to the general contractor (not
including sales tax on the services).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 73
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit......................................... 29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%............................... 82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
90,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
30,000
S A M P L E
S A M P L E
Amount of the
subcontractor’s
services included
on Line 3 that
they sold to
the general
contractor on a
resale basis.
Amount of the
materials included
on Line 3 on which
the subcontractor
has already paid
the sales tax to
their vendor.
74 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 1
(General Contractor’s Return)
100,000
100,000
60,000
40,000
2,540
2,540
2,540
2,540
S A M P L E
S A M P L E
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
• The subcontractor’s service; and
• The general contractor’s service.
(The sales tax on the services is not
included on this line.)
This is the total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 75
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps .......... 21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit......................................... 29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels............................................................. 73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%............................... 82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ............................... 83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
60,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
Amount of the
materials included
on Line 3 on which
the subcontractor
has already paid
the sales tax to
their vendor.
76 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 77
Materials purchased (including taxes paid)
60,000.00$
Services 30,000.00$
Sales tax on services x 6.35% 1,905.00$
Total services 31,905.00$ 60,000.00$
Total 91,905.00$ 30,000.00$
Total reported on Line 3 90,000.00$
SC's materials (including taxes paid) 60,000.00$
SC's services (taxes paid by GC) 31,905.00$
GC's services 10,000.00$ 60,000.00$
Sales tax on GC services x 6.35% 635.00$ 31,905.00$
Total 102,540.00$ 10,000.00$
101,905.00$
Materials - SC (including tax paid by SC to vendors) 60,000.00$
SC's services (sales tax paid) 31,905.00$
GC's services 10,000.00$
Sales tax on services x 6.35% 635.00$
Total GC services and sales tax on GC services 10,635.00$
Total 102,540.00$
A contractor's service charge, sometimes referred to as the labor charge, is determined by subtracting the cost of materials
(including tax paid on materials) from the total contract price. In other words, every cent above the contractor's cost of
materials physically incorporated into the real property, plus the tax paid on those materials, is considered the service charge.
See Service Charge on Page 14.
Materials (taxes paid)
See sample general contractor sales tax return on pages 80-81.
See sample subcontractor sales tax return on pages 78-79.
Facts
• This is a taxable renovation to commercial property.
• All materials for this job are purchased by the subcontractors (SC).
• Tax is paid by SC's on their materials at the time of purchase.
• General contractor (GC) does not issue resale certificates to SC's for taxable services.
• GC separately states the charges to the property owner as follows:
Bills & Books
Subcontractor (SC)
Materials
Services
Reported on GC's Form OS-114, Deductions
Line A, Other Adjustments - sales of goods
Reported on SC's Form OS-114, Deductions
Line A, Other Adjustments - sales of goods
Example 2
SC's services (taxes paid)
GC's services (without tax)
• Materials consumed, including tax paid on the materials;
SC's bill to GC:
GC's books:
GC's bill to property owner:
Materials (taxes paid)
Services
• Sales tax on the service portion of the bill.
General Contractor (GC)
Reported on GC's Form OS-114, Line 3:
Reported on GC's Form OS-114, Deductions
Line C, Other Adjustments - sales of labor
and services
Total reported on Line 3
Reported on SC's Form OS-114, Line 3:
tool or equipment purchase or rental including tax paid on the rental, and profit; and
• Service charges, including markup on materials, overhead expenses, labor charges,
78 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 2
(Subcontractor’s Return)
90,000
90,000
60,000
30,000
1,905
1,905
1,905
1,905
S A M P L E
S A M P L E
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
and
• The subcontractor’s service charge
to the general contractor (not
including sales tax on the services).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 79
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit.........................................29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%...............................82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
60,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
Amount of the
materials, included
on Line 3 on which
the subcontractor
has already paid
sales tax to the
vendor.
80 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 2
(General Contractor’s Return)
101,905
91,905
10,000
635
635
S A M P L E
S A M P L E
101,905
635
635
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
• The subcontractor’s service; and
• The general contractor’s service.
(The sales tax on the services is not
included on this line.)
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 81
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps .......... 21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit......................................... 29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels............................................................. 73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%............................... 82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ............................... 83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
Materials consumed, including tax paid
Subcontractor’s services,
including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
31,905
91,905
Amount of the
materials included
on Line 3 on which
the subcontractor
has already paid
the sales tax to
their vendor.
82 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 83
Materials purchased (including taxes paid) 60,000.00$
SC services 30,000.00$
Total 90,000.00$
Total labor and materials (sales tax included on services) 130,000.00$
60,000.00$
30,000.00$
Materials 35,820.73$
Materials - SC (including taxes paid by SC to vendors) 60,000.00$ 125,820.73$
Services
SC's services 30,000.00$
Sales tax on SC services x 6.35% 1,905.00$
Total SC services 31,905.00$
GC's services (sales tax included) 38,095.00$
The Alternative Factor x 94.03%
Gross receipts ($38,095*0.9403) 35,820.73$
Sales tax on GC services ($38,095 - $35,820.73) 2,274.27$
Total GC services (sales tax included) 38,095.00$
Total sales tax on all services ($1,905 + $2,274.27) 4,179.27$
Total 130,000.00$
• GC bills the property owner $130,000 to include all materials, services and sales tax on the service portion of the bill.
Example 3
Facts
• This is a taxable renovation to commercial property.
• All materials for this job are purchased by the subcontractors (SC).
• Tax is paid by SC's on their materials at the time of purchase.
• General contractor (GC) issues resale certificates to SC's for taxable services.
• GC does not break down the bill to the property owner.
• GC must keep accurate records of the actual costs of materials and service, including all subcontracting costs.
• GC charges tax to the property owner only on the service portion of the bill.
• GC must charge 6.35% sales tax on the total SC's services.
• GC bills the property owner on a sales tax included basis for their service portion of the bill.
Reported on GC's Form OS-114, Line 3:
• GC determines the gross receipts from taxable services by multiplying the total charges for taxable services by 94.03%.
• The tax is determined by subtracting the gross receipts from taxable services from the total charges for taxable services.
Bills & Books
Subcontractor (SC)
Reported on SC's Form OS-114,
Deductions Line A, Other Adjustments -
sales of goods
SC's bill to GC:
See sample subcontractor sales tax return on pages 84-85.
Reported on SC's Form OS-114, Deductions
Line 17, Sales for resale - labor and services
Reported on SC's Form OS-114, Line 3
General Contractor (GC)
GC's bill to property owner:
See sample general contractor sales tax return on pages 86-87.
A contractor's service charge, sometimes referred to as the labor charge, is determined by subtracting the cost of materials (including tax
paid on materials) from the total contract price. In other words, every cent above the contractor's cost of materials physically
incorporated into the real property, plus the tax paid on those materials, is considered the service charge. See Service Charge on Page 14.
Materials (taxes paid)
GC's books:
SC's services (without tax)
GC's services (without tax)
Total reported on Line 3
Reported on GC's Form OS-114,
Deductions Line A, Other Adjustments -
sales of goods
84 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 3
(Subcontractor’s Return)
90,000
90,000
0
0
0
0
0
S A M P L E
S A M P L E
90,000
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
and
• The subcontractor’s service charge
to the general contractor (not
including sales tax on the services).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 85
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit.........................................29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%...............................82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
90,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
30,000
Amount of the
subcontractor’s
services included
on Line 3 that
they sold to
the general
contractor on a
resale basis.
Amount of the
materials, included
on Line 3 on which
the subcontractor
has already paid
sales tax to the
vendor.
86 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 3
(General Contractor’s Return)
125,821
60,000
65,821
4,179
4,179
S A M P L E
S A M P L E
125,821
4,179
4,179
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
• The subcontractor’s service; and
• The general contractor’s service.
(sales tax on the general contractor’s
services is not included on this line).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 87
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit......................................... 29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%............................... 82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
60,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
Amount of the
materials included
on Line 3 on which
the subcontractor
has already paid
the sales tax to
their vendor.
88 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 89
Total labor and materials (sales tax included on services) 90,000.00$
60,000.00$
28,209.00$
Materials purchased 56,417.49$ Total reported on Line 3 88,209.00$
Taxes paid 3,582.51$
Total materials 60,000.00$
Total services 30,000.00$
The Alternative Factor x 94.03%
Gross receipts 28,209.00$
Sales tax on services ($30,000 - $28,209) 1,791.00$
Total 90,000.00$
Total labor and materials (sales tax included on services) 130,000.00$
90,000.00$
SC's labor and materials (including taxes paid) 90,000.00$ 37,612.00$
GC's services 40,000.00$ 127,612.00$
The Alternative Factor x 94.03%
Gross receipts 37,612.00$
Sales tax on services ($40,000 - $37,612) 2,388.00$
Total 130,000.00$
See sample general contractor sales tax return on pages 92-93.
A contractor's service charge, sometimes referred to as the labor charge, is determined by subtracting the cost of materials
(including tax paid on materials) from the total contract price. In other words, every cent above the contractor's cost of
materials physically incorporated into the real property, plus the tax paid on those materials, is considered the service charge.
See Service Charge on Page 14.
Reported on GC's Form OS-114, Line 3:
SC's labor and materials
(taxes paid)
GC's books:
GC's services (without tax)
Total reported on Line 3
Reported on GC's Form OS-114,
Deductions Line C, Other Adjustments -
sales of labor and services
GC's bill to property owner:
• The tax is determined by subtracting the gross receipts from taxable services from the total charges for taxable services.
Bills & Books
Subcontractor (SC)
SC's bill to GC:
Reported on SC's Form OS-114, Line 3:
Materials (taxes paid)
SC's books:
Services
Reported on SC's Form OS-114, Deductions
Line A, Other Adjustments - sales of goods
General Contractor (GC)
See sample subcontractor sales tax return on pages 90-91.
• The GC determines the gross receipts from taxable services by multiplying the total charges for taxable services by 94.03%.
Example 4
Facts
• This is a taxable renovation to commercial property.
• All materials for this job are purchased by the subcontractors (SC).
• Tax is paid by the SC's on their materials at the time of purchase.
• General contractor (GC) does not issue resale certificates to subcontractors for taxable services.
• The GC does not break down the bill to the property owner.
• The GC must keep accurate records of the actual costs of materials and service, including all subcontracting costs.
• The GC charges tax to the property owner only on the service portion of the bill.
• The GC bills the owner on a sales tax included basis for the service portion of the bill.
• The GC bills the property owner $130,000 to include all materials, services and sales tax.
90 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 4
(Subcontractor’s Return)
88,209
88,209
28,209
1,791
1,791
1,791
1,791
S A M P L E
S A M P L E
60,000
Total amount of:
• Materials purchased by the
subcontractor (including the tax the
subcontractor paid to their vendor);
and
• The subcontractor’s service charge
to the general contractor (not
including sales tax on the services).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 91
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit.........................................29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%...............................82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
60,000
60,000
Materials consumed, including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
Amount of the
materials, included
on Line 3 on which
the subcontractor
has already paid
sales tax to the
vendor.
92 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Type or print. Complete the return in blue or black ink only. Do not use grayed-out elds.
All quarterly and monthly lers must le Form OS-114 and pay its associated taxes electronically. Visit www.ct.gov/TSC to le your return
electronically using the TSC or call the Connecticut Business Telele System toll-free at 855-665-9471 or 860-449-1011 (from Groton
area) to le your return using Telele. To request a one-year waiver from this electronic ling requirement visit www.ct.gov/drs/TSCling
to complete Form DRS-EWVR, Electronic Filing and Payment Waiver Request.
1. Gross receipts from sales of goods. ........................................ 1.
2. Gross receipts from leases and rentals. .................................. 2.
3. Gross receipts from labor and services. .................................. 3.
4. Goods purchased by your business subject to use tax. .......... 4.
5. Leases and rentals by your business subject to use tax. ........ 5.
6. Services purchased by your business subject to use tax. ....... 6.
7. Total: Add Lines 1 through 6 .................................................... 7.
8. Deductions. See instructions ................................................... 8.
9. Subtract Line 8 from Line 7. If zero or less, enter “0”. .............. 9.
10a. Amount of tax due: Multiply Line 9 by Tax Rate. .................. 10a.
10. Total tax due: Add Line 10a, Columns 1, 2, and 3. .............................................................................................. 10.
11. For amended return only, enter tax paid on prior return. ......................................................................................11.
12. Net amount of tax due: Subtract Line 11 from Line 10. ........................................................................................ 12.
13. Interest + Penalty = 13.
14. Total amount due: Add Line 12 and Line 13. ....................................................................................................... 14.
If applicable, provide the following information: Final return Enter last business date:
(MMDDYYYY)
Enter new mailing address:
Enter new physical location (PO Box is not acceptable.):
Enter new trade name:
First return - Enter business start date:
New owners must obtain a new Connecticut Tax Registration Number.
Enter new owner name:
Date sold:
(MMDDYYYY)
Address:
Column 1
6.35% Tax Rate
Column 2
7.75% Tax Rate
Column 3
9.35% Tax Rate
Rounding: You must round off cents to the nearest whole dollar on your
return and schedules. If you do not round, DRS will disregard the cents.
Declaration:
I declare under the penalty of law that I have examined this return (including any accompanying schedules and statements) and, to the best of my knowledge and belief, it
is true, complete, and correct. I understand the penalty for willfully delivering a false return or document to the Department of Revenue Services (DRS) is a ne of not more than $5,000,
imprisonment for not more than ve years, or both. The declaration of a paid preparer other than the taxpayer is based on all information of which the preparer has any knowledge.
Form OS-114 (SUT)
Connecticut Sales and Use Tax Return
Department of Revenue Services
PO Box 5030
Hartford CT 06102-5030
(Rev. 02/16) MO
OS114 00 16P 01 9999
For period ending
Due date Connecticut Tax Registration Number
Federal Employer Identication Number
DRS use only
(MMDDYYYY)
Check here if this is
an amended return.
(MMDDYYYY)(MMDDYYYY)
Sign Here
Keep a
copy of
this return
for your
records.
Taxpayer’s signature Title Date
(MMDDYYYY)
Telephone number
Taxpayer’s email
Paid preparer’s signature Paid preparer’s address Date
(MMDDYYYY)
See Form O-88, Instructions for Form OS-114 Sales and
Use Tax Return. Form OS-114 must be led and paid on or
before the last day of the month following the end of the period.
EXAMPLE 4
(General Contractor’s Return)
127,612
90,000
37,612
2,388
2,388
S A M P L E
S A M P L E
127,612
2,388
2,388
Total amount of:
• The subcontractor’s materials and
labor (including taxes paid);
and
• The general contractor’s service
(sales tax on the general contractor’s
services is not included on this line).
Total deductions
(see next page)
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 93
Deductions
Column 1
6.35% Tax Rate
Column 2
7.75 % Tax Rate
Form OS-114 Back
(Rev.
02/16
)
MO
OS114 00 16P 02 9999
15. Sales for resale - sales of goods ................................................................................................................. 15.
16. Sales for resale - leases and rentals ........................................................................................................... 16.
17. Sales for resale - labor and services ........................................................................................................... 17.
18. All newspapers and subscription sales of magazines and puzzle magazines ............................................ 18.
19. Trucks with GVW rating over 26,000 lbs. or used exclusively for carriage of interstate freight ...................19.
21. Food for human consumption, food sold in vending machines, items purchased with food stamps ..........21.
23. Sale of fuel for motor vehicles ..................................................................................................................... 23.
24. Sales of electricity, gas, and heating fuel for residential dwellings ..............................................................24.
25. Sales of electricity - $150 monthly charge per business ............................................................................. 25.
26. Sales of electricity, gas, and heating fuel for manufacturing or agricultural production ...................................26.
27. Aviation fuel .................................................................................................................................................27.
29. Tangible personal property to persons issued a Farmer Tax Exemption Permit......................................... 29.
30. Machinery, its replacement, repair, component and enhancement parts, materials, tools, and fuel for manufacturing ...30.
31. Machinery, materials, tools, and equipment used in commercial printing process or publishing ............... 31.
32. Vessels, machinery, materials, tools, and fuel for commercial shing ........................................................ 32.
33. Out-of-state - sales of goods ....................................................................................................................... 33.
34. Out-of-state - leases and rentals ................................................................................................................. 34.
35. Out-of-state - labor and services ................................................................................................................. 35.
36. Motor vehicles or vessels purchased by nonresidents ................................................................................36.
37. Prescription medicines and diabetic equipment .......................................................................................... 37.
38. Nonprescription drugs and medicines. (Effective beginning 04/01/15.) ...................................................... 38.
39. Charitable or religious organizations - sales of goods .................................................................................39.
40. Charitable or religious organizations - leases and rentals ...........................................................................40.
41. Charitable or religious organizations - labor and services ...........................................................................41.
42. Federal, Connecticut, or municipal agencies - sales of goods .................................................................... 42.
43. Federal, Connecticut, or municipal agencies - leases and rentals .............................................................. 43.
44. Federal, Connecticut, or municipal agencies - labor and services .............................................................. 44.
45. Items certied for air or water pollution abatement - sales, leases, and rentals of goods ...........................45.
47. Nontaxable labor and services .................................................................................................................... 47.
48. Services between wholly owned business entities ......................................................................................48.
50. Trade-ins of all like-kind tangible personal property ....................................................................................50.
52. Taxed goods returned within 90 days at the rate listed above in Columns 1 or 2 .......................................52.
56. Oxygen, blood plasma, prostheses, etc. - sales, leases, rentals, or repair services of goods .................... 56.
63. Funeral expenses ........................................................................................................................................63.
69. Repair services, repair and replacement parts for aircraft, and certain aircraft ...........................................69.
71. Certain machinery under the Manufacturing Recovery Act of 1992 ............................................................71.
72. Machinery, equipment, tools, supplies, and fuel used in the biotechnology industry .................................. 72.
73. Repair and maintenance services and fabrication labor to vessels.............................................................73.
74. Computer and data processing services at 1% (See instructions, Form 0-88.) .......................................... 74.
75. Renovation and repair services to residential real property ........................................................................ 75.
77. Sales of qualifying items to direct payment permit holders ......................................................................... 77.
78. Sales of college textbooks ...........................................................................................................................78.
79. Sales tax holiday ......................................................................................................................................... 79.
82. Motor vehicles sold to active duty nonresident members of the armed forces at 4.5%............................... 82.
83. For cigarette dealers only: Purchases of cigarettes taxed by a stamper or distributor ...............................83.
A. Other Adjustments - sales of goods (Describe:
) A.
B.
Other Adjustments - leases and rentals (Describe:
) B.
C. Other Adjustments - labor and services (Describe:
) C.
Total Deductions: Enter here and on Line 8 on the front of this return.
For Utility & Heating
Fuel Companies
Only
See instructions (Form O-88) before completing.
CT Tax Registration #
90,000
90,000
Subcontractor’s services,
including tax paid
Personal or business expenses cannot be claimed on this return.
S A M P L E
S A M P L E
Amount of the
subcontractor’s
materials and
service charge on
which the general
contractor has
already paid tax to
the subcontractor.
94 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 95
Connecticut Tax Forms, Publications,
numbers referenced are updated at the time of printing, but the information may change. The most current versions are
available on the DRS website at .
Connecticut Sales and Use Tax Return
Connecticut Individual Use Tax Return
IP 2018(19) Farmer’s Guide to Sales and Use Taxes, Motor
Vehicle Fuels Tax, Estimated Income Taxes,
and Withholding Tax
IP 2015(16) Q & A on the Connecticut Use Tax for
Businesses and Professions
IP 2009(13) Sales and Use Taxes Guide for Manufacturers,
Fabricators and Processors
IP 2009(15) Notice to Retailers on Sales and Use Tax Resale
Q & A on the Connecticut Direct Payment
Permit Program
Tax Exemptions for Certain Water Pollution
Control Equipment
Sales and Use Tax Exemption for Low and
Moderate Income Housing Facilities
Tax Exemptions for Certain Air Pollution
Control Equipment
Sales and Use Tax Refund Policy
Fabrication and Installation of Stock and
Custom Cabinets
2011 Legislative Changes to the Procedures
Governing Nonresident Contractors
The “Buy Connecticut” Provision
Exemption From Sales and Use Taxes
for Projects of the Connecticut Resources
Recovery Authority and Solid Waste-to-Energy
Facilities
Sales and Use Taxes on Charges Made by
Service Providers After Air Kaman Inc. v.
Groppo and 1992 Conn. Pub. Acts 17 (May
Spec. Sess.)
Topical Index to Rulings and Administrative
Pronouncements Covering Sales and Use Taxes
Repair services to motor vehicles
Electrical and electronic repair
services
Locksmith services
Landscaping and horticulture
services
Window cleaning services
Maintenance services
Janitorial services
Exterminating services
Swimming pool cleaning and
maintenance services
Repair or maintenance services
to tangible personal property and
contracts of maintenance, repair or
warranty
Services to industrial, commercial
or income-producing real property
Resale of services
Resale of services excluded from
use tax
Contractors and subcontractors
96 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Application for Tax Registration Number
Power of Attorney
Request for Disclosure of Tax Return or
Tax Return Information
Limited Power of Attorney
Change of Address
IP 2018(5) Getting Started in Business
IP 2018(6) Procedures to Request Disclosure of Tax
Returns and Tax Return Information
IP 2018(10) Successor Liability and Request for Tax
Clearance
Filing and Paying Connecticut Taxes
Electronically
Q & A Concerning Freedom of Information
Act Requests
IP 2016(14) Q & A on the Business Entity Tax
Your Rights as a Connecticut Taxpayer
Requests for Issuance of a Ruling
Procedures in Handling Requests for
Issuance of Technical Advice Memoranda
Limited Liability Companies
Topical Index to Rulings and Administrative
Pronouncements Covering Miscellaneous
Taxes and Administrative Topics
Numerical Index to Rulings and
Administrative Pronouncements As
Affected, If At All, By Later-Issued
Rulings and Pronouncements
Materials, Tools, and Fuel
Machinery, Component Parts, and Replacement
and Repair Parts of Machinery Used Directly
in a Manufacturing Process
Certified Rehabilitation Certificate for
Residential Condominium Association
Commercial Motor Vehicle Purchased Within
Connecticut for Use Exclusively in the
Carriage of Freight in Interstate Commerce
Claim for Refund of Use Tax Paid on Motor
Vehicle Purchased From Other Than a Motor
Vehicle Dealer
Partial Exemption of Materials, Tools, and
Fuels
Partial Exemption for Machinery, Equipment,
or Repair and Replacement Parts
Aircraft Repair Services - Aircraft Repair and
Replacement Parts
Machinery, Equipment, Materials, Tools,
and Fuel Used by an Aircraft Manufacturer
Operating an Aircraft Manufacturing Facility
Exempt Purchase of Meals or Lodging by
Exempt Entities
Purchases of Tangible Personal Property and
Services by Certain Hospitals, Nonprofit
Commercial Motor Vehicle or Motor Bus
Purchased Within Connecticut for Use in
Interstate Commerce as an Interstate Motor
Bus
Exempt Purchases of Gas, Electricity, and
Heating Fuel
Purchases of Tangible Personal Property
Incorporated Into or Consumed in Air
Pollution Control Facilities
Purchases of Tangible Personal Property and
Services by Qualifying Exempt Organizations
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 97
Machinery, Equipment, Tools, Materials, and
Supplies Used in the Production of Printed
Material or in Prepress Production
Exemption for Landscaping and Horticulture
Services, Window Cleaning Services, and
Maintenance Services Provided to Recipients
Refund of Tax Paid on Purchases of Meals or
Lodging by Exempt Entities
Purchases of Meals or Lodging by an Exempt
Organization or Qualifying Governmental
Agency
Purchases of Tangible Personal Property
Incorporated Into or Consumed in Water
Pollution Control Facilities
Sales and Use Tax Exemption for a Motor
Vehicle Purchased by a Nonresident of
Connecticut
Exempt Purchases of Tangible Personal
Property or Services for Low and Moderate
Income Housing Facilities
Exempt Purchases by an Enrolled Member or
by the Tribal Government of the Mashantucket
Pequot Tribe or Mohegan Tribe
Exempt Purchases by Contractors in
Connection With Construction Projects in
Indian Country of the Mashantucket Pequot
or Mohegan Tribes
Exemption for Items Used Directly in the
Biotechnology Industry
Exemption for Projects of the Connecticut
Resources Recovery Authority and Solid
Waste-to-Energy Facilities
Sales and Use Tax Exemption for Purchases
Made Under the Buy Connecticut Provision
a Renovation Contract With a Direct Payment
Permit Holder
Exempt Purchases by Qualifying Governmental
Agencies
Reduced Sales and Use Tax Rate for Motor
Vehicles Purchased by Nonresident Military
Personnel and Their Spouses
Purchases of Items by Eleemosynary
Organizations and Schools That Will Be
Resold Tax-Exempt for $20 or Less
Leaseback Arrangements
Purchases for Use in Audio or Video
Production or Broadcasting
Sales and Use Tax Exemption for a Vessel
Purchased by a Nonresident of Connecticut
Solar Heating Systems, Solar Electricity
Generating Systems, and Ice Storage Cooling
Systems
Items Used Directly in the Renewable Energy
and Clean Energy Technology Industries
Sales and Use Tax Exemption for Purchases
of Vessels Docked in Connecticut for 60 or
Fewer Days in a Calendar Year
Connecticut Quarterly Reconciliation of
Withholding
Amended Connecticut Reconciliation of
Withholding
Connecticut Annual Reconciliation of
Withholding
Annuity Payments
Nonresident Apportionment
98 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Adriaen's Landing ................................................................. 17
Agent of the Government ................................................ 15, 17
AIA Document ...................................................................... 15
Air Conditioning ............................... 10, 13, 30, 31, 33, 44, 51
Air Pollution Control Facilities ............................................. 18
Alarm Systems .......................................................... 10, 26, 33
Antennas and Communications Towers ................................ 26
Appendix ............................................................................... 67
Appliances ....................................................................... 10, 45
Architectural and Design Services ............................ 21, 27, 45
Audio-Visual Cable or Wiring ........................................ 41, 59
Awnings .......................................................................... 28, 56
Basketball Courts .................................................................. 50
Bathrooms ............................................................................ 28
Bill to Final Customer ................................... 15, 71, 77, 83, 89
Bond Requirements of Nonresident Contractors ............ 23, 24
Brick Washing ................................................................. 29, 48
Brickwork/Stonework ........................................................... 29
Buildings (Temporary) .......................................................... 10
Business Entity Tax ................................................................. 8
Buy Connecticut Provision ................................................... 19
Cabinets ..................................................................... 28, 45, 56
Carpentry ................................................................... 13, 29, 32
Carpet Cleaning .............................................................. 13, 44
Carpeting ................................................................... 13, 37, 38
Central Air Conditioning ..................................... 10, 11, 30, 33
Central Vacuum ................................................... 10, 30, 31, 33
................................................................ 95, 96, 97
....................................................... 13
................................................... 13
Chainlink Fencing ................................................................. 36
Charitable or Religious Organizations ................ 15, 16, 20, 22
Chimneys ........................................................................ 29, 31
Chimney Cleaning/Sweeping .................................... 31, 48, 52
Civil Engineering .................................................................. 45
Clean Rooms/HVAC Systems ......................................... 31, 32
Cleaning Supplies ................................................................. 48
Commercial Property ............................................................ 13
Communications Towers ....................................................... 26
Component Parts ................................................................... 32
Computer Cable or Wiring .................................................... 59
Condominiums ...................................................................... 16
Connecticut Innovations, Inc. (CII) ...................................... 17
and Sales Tax Regulations ................................................. 95
Connecticut Resource Recovery Authority ........................... 16
Construction Contracts ...................................................... 9, 19
Construction Management .............................................. 13, 48
Construction Projects That Involve
Renovation and New Construction .................................... 19
Contaminant (Other) Services ................................... 18, 35, 60
Contractor’s Bill to the Final Customer ........ 15, 71, 77, 83, 89
............................ 16
Contractor’s Labor Not Subject to Tax ................................. 15
Contractor’s Labor Subject to Tax ........................................ 15
Contractor’s Purchase of
Subcontractor Services .................. 19, 21, 22, 71, 77, 83, 89
Contracts With Exempt Entities .......................... 15, 16, 19, 20
Contracts With Governmental Agencies ............................... 17
Corporation Business Tax ....................................................... 8
Cost-Plus Contract .................................................................. 9
Curtains ........................................................................... 10, 65
Decks ............................................................................... 14, 32
Demolition ...................................................................... 13, 32
Design Development Drawings ............................................ 46
Design Parameters ................................................................ 46
Design (and Architectural) Services ............................... 21, 29
Direct Payment Permit Holders ............................................ 19
................................................ 47
Dredging ......................................................................... 33, 48
Driveway Sealing .................................................................. 48
Driveways ........................................................... 14, 46, 48, 50
Duct Work .................................................... 30, 40, 41, 44, 61
E
Electrical ............................................................. 10, 13, 33, 34
Electrical Devices ..................................................... 33, 34, 45
Elevators ......................................................................... 13, 34
Employee Compensation, Separately Stated ........................ 48
Energy Audits ........................................................................ 35
Engineering Services ................................................ 21, 29, 45
Environmental Impact Studies .............................................. 46
Equipment ................................................................... 8, 12, 14
Equipment Rental .................................................................. 12
Escalators ........................................................................ 13, 34
Index
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 99
Excavating ................................................................. 13, 35, 46
Exempt Entities/Organizations .................... 15, 16, 19, 20, 23
Exterior Sheet Metal Work .............................................. 13, 36
Exterminating .................................................................. 13, 36
Fabrication Labor .................................................................. 63
Facility Approval Letter ........................................................ 17
Fan Units ............................................................................... 61
Fencing ................................................................ 36, 46, 56, 60
Fire Damage .......................................................................... 37
Fireplaces ........................................................................ 29, 37
Fixed Fee Contract .................................................................. 9
Floating Floors ...................................................................... 37
Floor Coverings .............................................................. 37, 38
.................................................................. 38
Foundation Work ................................................................... 13
Furnaces .............................................................. 10, 11, 40, 41
Furniture .............................................................. 10, 23, 38, 44
Garage Door Openers ........................................................... 39
Garage Doors ........................................................................ 38
Garbage Disposals .......................................................... 39, 45
Gazebos ........................................................................... 10, 54
Getting Started in Business ..................................................... 8
Governmental Agencies .................................................. 15, 16
Grading .......................................................................... 35, 46
Gutters ................................................................. 36, 40, 48, 52
Hard-wiring Labor .......................................................... 33, 41
Hatchways ............................................................................. 56
Hazardous Waste ....................................................... 18, 35, 60
Heating Systems ...................................... 10, 31, 35, 40, 41, 62
Historic Structures ................................................................ 13
Home Entertainment/Home Theater Systems ....................... 41
Horticulture Services ............................................................ 46
Hot Tubs, Spas, and Saunas .................................................. 41
House Washing (Power Washing) ................................... 13, 48
Hydraulic or Hydrologic Analysis ........................................ 46
I
Inclined Stairway Chairlifts .................................................. 43
Income-Producing Property .................................................. 13
Indian Tribes (Federally Recognized) ............................. 15, 17
Industrial Property ................................................................ 13
Initial Finish Out Work ......................................................... 13
Inspections ............................................................................ 57
Installation of Systems .......................................................... 11
Installation Versus Repair or Maintenance of
Tangible Personal Property ............................................... 10
Integral Parts ......................................................................... 11
Interior Decorators ................................................................ 44
Interior Duct Work .......................................................... 30, 44
Interior Sheet Metal (Duct Work) ......................................... 44
Inventory ................................................................... 11, 20, 23
Irrigation Systems ................................................................. 46
J
Janitorial Services ............................................... 13, 20, 44, 48
K
Kitchens ................................................................................ 45
L
Labor Charge ................................................................... 14, 15
Lakes .................................................................................... 33
Land Clearing ................................................................. 35, 46
Landscaping Services .................. 13, 16, 20, 29, 33, 35, 36, 46
Lawn and Garden Services ................................................... 46
Line Painting ......................................................................... 49
Locksmith Services ......................................................... 13, 47
Long-Term Financing Contracts ........................................... 17
Low and Moderate Income Housing ............................... 15, 17
Lump-Sum Contract ................................................................ 9
M
Mailboxes .............................................................................. 47
Maintenance of Tangible Personal Property ................... 10, 11
Maintenance Services to Real Property ........ 13, 28, 48, 52, 53
Management .................................................................... 13, 48
Markup ................................................................ 14, 15, 22, 69
Masonry .......................................................................... 13, 29
Master Planning .................................................................... 46
Materials Used In Construction Contracts
....................................................... 20, 21, 22, 71, 77, 83, 89
Modular Lighting Units .................................................. 10, 33
Moving a Structure ............................................................... 49
Mowing ................................................................................. 46
Navigable Waters .................................................................. 33
New Construction Projects ..................... 11, 12, 13, 14, 18, 19
New Construction ........................................................... 12, 13
............................................. 16
..................................................... 16
....................................... 16
100 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
........................................................... 16
Nonresident Contractors ............................................. 8, 23, 24
Nontaxable Contracts ............................................................ 16
O
Obtaining a Sales and Use Tax Permit .................................... 8
........................... 51
Other Contaminants for Air, Water, or Soil ............... 18, 35, 60
Outdoor Lighting Systems .............................................. 14, 49
Out-of-State Contracts .......................................................... 19
Out-of-State Vendors ............................................................. 20
Overhead Expenses ............................................. 14, 15, 21, 22
Owner-Occupied Residential Property ................................. 13
P
Painting ........................................................................... 13, 49
Paper Shredding ........ ............................................................ 49
Parking Lots .................................................................... 14, 50
Patios ......................................................................... 14, 29, 46
Patrol Work ........................................................................... 51
Paving ....................................................................... 13, 46, 50
Personnel Agency Services ................................................... 22
Pest Control ........................................................................... 36
Plastering ............................................................................... 13
Plumbing ......................................................................... 13, 51
Political Subdivisions of Connecticut ................................... 17
Ponds ..................................................................................... 33
Power Washing ......................................................... 44, 48, 49
Precast Concrete or Cement Steps ........................................ 56
Prefabricated Buildings ................................................... 10, 54
................................................................................ 14, 15
Property Management ................................... 13, 16, 20, 21, 48
Protection Services ................................................................ 51
Publications ........................................................................... 95
Public Right-of-Way ..................................... 13, 15, 49, 51, 60
Pumps ................................................ 10, 33, 42, 43, 51, 57, 63
Purchasing Materials ................................................. 19, 20, 23
Purchasing Services .............................................................. 23
R
Real Property ........................................................................ 10
Receipt .................................................................................. 15
Recurring Taxable Services Provided to Real Property
Purchased by Direct Payment Permit Holders .................. 20
Refrigeration Units .......................................................... 10, 33
Refuse Removal .................................................. 13, 38, 49, 51
Regulations ........................................................................... 95
Reimbursed Expenses ......................................... 14, 15, 21, 27
Religious (or Charitable) Organizations ....... 15, 16, 20, 22, 23
Renovation Construction Projects ......................................... 19
Rentschler Field .................................................................... 17
Rental of Equipment ............................................................. 12
Repair or Maintenance of Tangible Personal
Property (Units) ................................................................. 10
Replacement of Entire Internal Structure ............................. 12
Repointing ................................................................. 29, 31, 37
........................ 11, 16, 19, 20, 21, 22, 23, 69
Retaining Walls ..................................................................... 46
Roadways .............................................................................. 14
............................................................................ 13, 52
Roof Warranties .................................................................... 52
Sales and Use Tax Permit ........................................................ 8
Sales and Use Tax Return ................................................ 67-93
Sales Invoice ......................................................................... 15
Sandblasting .................................................................... 13, 53
Saunas ................................................................................... 41
Septic System Cleaning ........................................................ 54
Septic Systems .......................................................... 14, 51, 54
Septic Tanks .............................................................. 51, 54, 56
Service Charge ...................................................................... 14
Service Contract .................................................................... 12
Services Taxable to All Real Property .................................. 13
Services Taxable to Certain Real Property ........................... 13
Sheds ............................................................................... 10, 54
Sheet Metal ............................................................... 20, 36, 44
Siding .............................................................................. 13, 55
Sign Painting and Lettering Services .................................... 55
Signs ...................................................................................... 55
Silt Fencing ........................................................................... 56
Site Assessment and Analysis ............................................... 46
Site Construction Drawings .................................................. 46
Site Improvements ................................................................ 14
Site Layout ............................................................................ 46
Site Plan Approval Packages ................................................ 46
Snow Plowing ........................................................... 13, 16, 48
Snow Removal .......................................................... 13, 16, 48
Solid Waste-to-Energy Facilities ........................................... 16
Spas ....................................................................................... 41
Sprinkler Systems (Exterior) ................................................. 46
Sprinkler Systems (Interior) .................................................. 56
Staining ........................................................................... 13, 49
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 101
Standard Units of Equipment ................................................ 56
State of Connecticut .............................................................. 17
Stock Cabinets ...................................................................... 56
Stone Washing ....................................................................... 48
Stonework ............................................................................. 29
Storage Sheds .................................................................. 10, 54
Storefront Businesses ............................................................ 20
Storm Water Drainage Systems ............................................ 14
Storm Water Management Plans ........................................... 46
Structural Inspection ....................................................... 13, 57
Subcontractor Services ............................ 21, 22, 71, 77, 83, 89
Substantial Rehabilitation of
............................................... 13
Sump Pumps ................................................................... 51, 57
Swimming Pools ................................................. 14, 36, 58, 59
T
Tangible Personal Property ................................................... 10
Tanks ............................................................. 10, 40, 51, 54, 56
Tax Districts .......................................................................... 17
Tax Held In Trust .................................................................. 16
Telecommunications Services ............................................... 21
Telephone Wiring .................................................................. 59
Temporary Personnel Agency Services ................................. 22
Tennis Courts ....................................................... 14, 48, 49, 50
Testing for Contaminants ...................................................... 60
Time and Material Contract With an Upset or
Guaranteed Price That May Not Be Exceeded .................. 10
Tools of the Trade ................................................................. 21
Tourism Districts ................................................................... 16
Trade-In Credit ...................................................................... 21
Trailers (Temporary) ............................................................. 10
Tree Removal Services ......................................................... 46
Tree Trimming Services ........................................................ 46
Turn-Key Contracts ............................................................... 16
Types of Construction Contracts ............................................. 9
Types of Nontaxable Contracts ............................................. 16
Types of Real Property .......................................................... 12
Underground Cables ............................................................. 60
Underground Pet Barrier Systems ......................................... 60
Underground Storage Tanks .................................................. 60
United States Government .................................................... 17
Utility Layout ........................................................................ 46
Utility Lines .......................................................................... 14
Varnishing ............................................................................. 49
Ventilation Systems ............................................. 13, 31, 44, 61
Walkways ............................................................ 14, 29, 46, 50
Wallpapering ................................................................... 13, 61
Walls .............................................................. 12, 29, 32, 46, 62
Warm Air Duct Systems ........................................................ 40
Warranty Contracts ............................................................... 11
Warranty Contracts for Real Property ................................... 62
Waste Treatment Facilities .................................................... 18
Watchman Services ............................................................... 51
Water Damage ....................................................................... 37
Water Heaters ...................................................... 10, 11, 40, 62
.................................................................. 29, 49
Welding ........................................................................... 13, 63
Wells .................................................................... 14, 51, 54, 63
Wetlands ................................................................................ 33
Wetland Approval Packages .................................................. 46
Where to Get Help .............................................................. 104
Wind Damage ....................................................................... 37
Window Cleaning ........................................................... 13, 65
Window Treatments .............................................................. 65
Windows ............................................................................... 64
Wiring ................................................................................... 59
Withholding Tax ...................................................................... 8
Wood Burning Furnaces ........................................................ 40
102 IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
notes
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes 103
MISSION STATEMENT
The Mission of the Department of Revenue Services
of tax collection;
achieve the highest level of voluntary taxpayer compliance;
continuously improve agency performance;
provide a positive and professional workplace.
IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
Department of Revenue Services
State of Connecticut
450 Columbus Blvd
Hartford CT 06103-1837
Department of Revenue Services
State of Connecticut
450 Columbus Blvd Ste 1
Hartford CT 06103-1837
Tax Information Forms and Publications
Internet
Find important information for Individual and Business
filers, and all of the latest DRS news including new
legislation, policies and press releases on the DRS
website at
View, download, and print all Connecticut
forms and publications by visiting the DRS
website at
Internet
Email
Send routine tax questions to
Do not send account related inquiries.
Email requests, including your name,
address (street, city, state, and ZIP code), and
the name or number of the tax product to
Email
Telephone
of a return or account-related matters, at
(Connecticut calls outside the Greater Hartford calling area
only); or (from anywhere).
For forms and publications, call
(Connecticut calls outside the
Greater Hartford calling area only) and select
; or (from anywhere).
Telephone
may transmit inquiries anytime by calling 860-297-4911.
Taxpayers may also call 711 for relay services. A taxpayer must tell the 711 operator the number he or she
wishes to call. The relay operator will dial it and then communicate using a TTY with the taxpayer.
Walk-In
DRS locations is available Monday through Friday, 8:30 a.m. to 4:30 p.m. (arrive by 4:00 p.m.). Directions
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