DRS: Ruling 89-6, Exemption - Governmental

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Ruling is obsoleted in part by AN 2000(8)

Ruling 89-6

Exemption - Governmental 


You have asked for a ruling as to whether a private developer who has been required by a Municipal Planning and Zoning Commission to install a sanitary sewer system, including pumping stations as a condition of subdivision approval, can purchase materials for said project without payment of the Connecticut sales tax.

Sales to political subdivisions of the State of Connecticut are exempt from sales tax; Conn. Gen. Stat. 12-412(1). There is an extension of this exemption which pertains to contractors who enter into construction contracts with inter alia municipalities. Under this exemption, such contractors:

may purchase . . . materials and supplies as are to be physically incorporated in and become a permanent part of the projects being performed under [the] contracts without payment of the tax. Conn. Agencies Reg. 12-426-18(b).

This exemption is to be narrowly construed. Connecticut Water Company v. Barbato, 206 Conn. 337 (1988). It applies only in those instances where a contract for municipal improvements that are paid for by public funds exists. In instances where the municipality benefits from, but does not contract for, improvements to municipal property, the exemption does not pertain.

 

LEGAL DIVISION

April 27, 1989