DRS: SN 98(6), Exemption from Sales and Use Taxes for Projects of the Connecticut Resources Recovery Authority and Solid Waste-to-Energy Facilities

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

SN 98(6)

Exemption from Sales and Use Taxes for Projects
of the Connecticut Resources Recovery Authority
and Solid Waste-to-Energy Facilities


PURPOSE: This Special Notice describes the exemptions from sales and use taxes for purchases of tangible personal property and services for use in projects of the Connecticut Resources Recovery Authority and solid waste-to-energy facilities. The exemption under Conn. Gen. Stat. §12-412(92) applies to sales and purchases of tangible personal property or services to be incorporated into or used or otherwise consumed in the operation of any project of the Connecticut Resources Recovery Authority. The exemption under Conn. Gen. Stat. §12-412(95) applies to sales and purchases of tangible personal property or services to be incorporated into or used or otherwise consumed in the operation of a solid waste-to-energy facility.


EFFECTIVE DATE: Effective for sales occurring on and after July 1, 1997.


STATUTORY AUTHORITY: Conn. Gen. Stat. §12-412(92) and Conn. Gen. Stat. §12-412(95), as enacted by 1997 Conn. Pub. Acts 316, §4.


DEFINITIONS: Terms used in the exemptions under Conn. Gen. Stat. §12-412(92) and (95) are defined as follows:

  • The Connecticut Resources Recovery Authority (the "CRRA") was established by Conn. Gen. Stat. §22a-261 as a public instrumentality and political subdivision of the State of Connecticut. The purposes of the CRRA that are authorized by Conn. Gen. Stat. §22a-262 include:
    1. the planning, design, construction, financing, management, ownership, operation and maintenance of solid waste disposal, volume reduction, recycling, intermediate processing and resources recovery facilities and related solid waste reception, storage, transportation and waste-handling, and general support facilities;
    2. the provision of solid waste management services to municipalities, regions and persons within the state by receiving solid wastes at authority facilities; the recovery of resources and resource values from such solid wastes; and the production from such services and resources recovery operations of revenues sufficient to provide for the support of the authority and its operations on a self-sustaining basis;
    3. the utilization, through contractual arrangements, of private industry for implementation of some or all of the requirements of the state solid waste management plan and for such other activities as may be considered necessary, desirable or convenient by the authority;
    4. assistance with and coordination of efforts directed toward source separation for recycling purposes; and
    5. assistance in the development of industries and commercial enterprises within Connecticut based upon resources recovery, recycling and reuse.
  • A solid waste-to-energy facility is also known as a resources recovery facility, which is defined in Conn. Gen. Stat. §22a-260(11) as a facility utilizing processes aimed at reclaiming the material or energy values from solid wastes. In order to qualify for exemption under Conn. Gen. Stat. §12-412(95), such a facility must hold a permit issued by the Commissioner of Environmental Protection under Conn. Gen. Stat. §22a-208a.

ITEMS THAT QUALIFY FOR EXEMPTION UNDER CONN. GEN. STAT. §§12-412(92) AND (95): Items of tangible personal property, and services enumerated in Conn. Gen. Stat. §12-407(2), qualify for exemption when purchased to be incorporated into or otherwise used or consumed in the operation of a project of the CRRA or a solid waste-to-energy facility. By way of example and not of limitation, tangible personal property and services purchased for use in any of the following activities in a CRRA project or in a solid waste-to-energy facility will qualify for exemption:

  • construction or expansion of a CRRA project or a solid waste-to-energy facility, requiring the purchase of such items as concrete, lumber, steel, machinery and equipment, as well as services to commercial, industrial or income-producing real property;
  • maintenance of the real property of a CRRA project or a solid waste-to-energy facility, requiring the purchase of landscaping or snow removal services, and maintenance and janitorial services rendered to the buildings of such a project or facility;
  • protection of property at a CRRA project or solid waste-to-energy facility, requiring the purchase of protection or patrol services;
  • maintenance of machinery and equipment at a CRRA project or solid waste-to-energy facility, requiring the purchase of repair and maintenance services and repair parts;
  • operation of a CRRA project or solid waste-to-energy facility, requiring the purchase of such items as lime, chemicals, filters, coal, electricity generating and distributing equipment, and personnel services;
  • treatment of solid waste and by-products of a CRRA project or solid waste-to-energy facility, requiring the purchase of such items as chemicals and filters;
  • gas, electricity or fuel for use at any stage of operating a CRRA project or solid waste-to-energy facility, such as fuel used to operate machinery or electricity consumed in administrative offices;
  • motor vehicles, tools and telecommunications services when used in the operation of a CRRA project or solid waste-to-energy facility, such as trucks and cellular telephones used by maintenance and repair crews, as well as repair services to such motor vehicles or other equipment; and
  • administration of a CRRA project or a solid waste-to-energy facility, requiring the purchase of such items as office supplies, furniture and equipment, and personnel services or computer and data processing services in connection with such activities as collecting tipping fees or billing for sales of electricity, or business management consulting services rendered in connection with establishing fees, scheduling outages or planning equipment replacement.

EXEMPT PURCHASES BY THE CRRA OR BY A LESSEE OR OPERATOR OF A CRRA PROJECT: As a public instrumentality and political subdivision of the State of Connecticut, the CRRA may make all of its purchases of tangible personal property or enumerated services under the governmental exemption of Conn. Gen. Stat. §12-412(1), by furnishing its vendors with a Governmental Agency Exemption Certificate.

Purchases of tangible personal property or enumerated services are now exempted by Conn. Gen. Stat. §12-412(92) when such items are to be incorporated into or used or otherwise consumed in the operation of any CRRA project. Such purchases are exempt whether made by the CRRA, or by a lessee or operator of a CRRA project when the CRRA will reimburse the lessee or operator for the purchases. The exemption applies to all purchases for a project of the CRRA, and is not limited to transactions made directly by the CRRA or directly reimbursed by it to a lessee or operator. Thus, even though the CRRA does not directly reimburse a lessee or operator for its purchases, a lessee or operator may claim the exemption of Conn. Gen. Stat. §12-412(92) for the purchases it makes under its contract with the CRRA to operate or maintain a recycling facility.

Effective immediately, the CRRA and any lessee or operator of a CRRA project should use a CERT-131, Certificate for Exemption for Projects of the CRRA and Solid Waste-to-Energy Facilities, to make any exempt purchases of tangible personal property or enumerated services. By accepting this certificate in good faith from such a purchaser, the seller will be relieved of the burden of proving that the property purchased is exempt. If the purchaser makes any use of the property other than the use stated on the certificate, the property will become subject to tax at the time of such use, based upon the full purchase price.


EXEMPT PURCHASES BY AN AUTHORITY, OPERATING COMMITTEE, OPERATOR OR LESSEE OF A SOLID WASTE-TO-ENERGY FACILITY: Purchases of tangible personal property or enumerated services are exempted by Conn. Gen. Stat. §12-412(95) when such items are to be incorporated into or used or otherwise consumed in the operation of a solid waste-to-energy facility.

Such purchases are exempt whether made by an authority or an operating committee of a facility, or by a lessee or operator of a facility when the authority or operating committee will reimburse the lessee or operator for the purchases. The exemption applies to all purchases for the operation of a solid-waste-to-energy facility, and the exemption is not limited to transactions made directly by the authority or an operating committee of the facility or directly reimbursed by them to a lessee or operator. Thus, even though the authority or operating committee does not directly reimburse a lessee’s or operator’s purchases, a lessee or operator may claim the exemption of Conn. Gen. Stat. §12-412(95) for the purchases it makes under its contract with the authority or operating committee to operate or maintain a solid-waste-to-energy facility.

When an authority, operating committee, lessee or operator of a solid waste-to-energy facility makes an exempt purchase of tangible personal property or enumerated services under Conn. Gen. Stat. §12-412(95), it must present a CERT-131, Certificate for Exemption for Projects of the CRRA and Solid Waste-to-Energy Facilities, to the seller. By accepting this certificate in good faith from such a purchaser, the seller will be relieved of the burden of proving that the property purchased is exempt. If the purchaser makes any use of the property other than the use stated on the certificate, the property will become subject to tax at the time of such use, based upon the full purchase price.


EFFECT ON OTHER DOCUMENTS: None affected.


EFFECT OF THIS DOCUMENT: A Special Notice is a document that, in response to newly enacted or amended Connecticut or federal laws or in response to newly released judicial decisions, announces a new Department position, policy or practice affecting the tax liability of taxpayers.


FOR FURTHER INFORMATION: If you have questions about Connecticut taxes, please call the Department of Revenue Services during business hours, Monday through Friday:

  • 860-297-5962 (Hartford calling area or from out-of-state); or
  • 1-800-382-9463 (toll-free from within Connecticut)

Telecommunications Device for the Deaf (TDD/TT) users only, please call 860-297-4911 during business hours.


FORMS AND PUBLICATIONS:

You may obtain forms and publications at any hour, seven days a week:

  • Telephone: use the phone numbers listed above and select Option 2 from a touch-tone phone;
  • Internet: preview and download forms from the DRS Web site: http://www.ct.gov/drs.

SN 98(6)
Sales and use taxes
Issued: 4/22/98