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CT Ruling 89-123 Sales and Use Taxes 1989-09-26

How did Connecticut Ruling 89-123 tax landscape design, contractor materials, and stone-fireplace labor?

Short answer: Contractors paid tax on their materials. Landscape design was taxable. Fireplace labor was nontaxable for new construction and qualifying owner-occupied one-to-three-family homes but taxable for existing commercial, industrial, or income-producing property. DRS says later announcements obsoleted the ruling.

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This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1989 Connecticut Department of Revenue Services Ruling reflecting the landscaping, contractor-material, and stone-fireplace rules then in effect. DRS expressly marks the information 'not current,' says Announcement (AN) 94(4) obsoleted it in part, and says AN 2000(8) obsoleted it. The ruling does not identify which conclusion AN 94(4) changed. Connecticut imposes sales and use tax solely at the state level: there are no local or municipal sales taxes. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about current treatment.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Note -- obsolete historical guidance. DRS marks this information "not current," states that Announcement (AN) 94(4) obsoleted it in part, and states that AN 2000(8) obsoleted it.

Plain-English summary

Contractors were the final consumers of materials and supplies used to perform their services and paid tax to suppliers on those purchases.

Landscape design services were taxable when performed on new construction, residential property, or business property.

Labor to build stone fireplaces was nontaxable in new building construction and in existing one-, two-, or three-family homes that were exclusively residential and owner-occupied. The labor was taxable on existing commercial, industrial, or income-producing property.

What this means for you

The historical ruling separated contractor purchases, landscape design, and fireplace labor by property type. Later DRS announcements obsoleted the guidance.

Common questions

Who paid tax on contractor materials and supplies? The contractor, as final consumer.

Were landscape design services taxable? Yes in the situations listed.

When was stone-fireplace labor nontaxable? In new construction and qualifying owner-occupied one-to-three-family homes.

When was that labor taxable? On existing commercial, industrial, or income-producing property.

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(I), as cited in the ruling.
  • 1989 Connecticut Public Act 89-251, as cited in the ruling.
  • Announcement (AN) 94(4) -- identified by DRS as partly obsoleting this ruling.
  • Announcement (AN) 2000(8) -- identified by DRS as obsoleting this ruling.

Source

Original ruling text

Ruling 89-123, Landscaping

This information is not current and is being provided for reference purposes only

This Ruling has been obsoleted in part by AN 94(4) ; obsoleted by AN 2000(8)

Contractors are the final consumers of the materials and supplies they use to perform their services. Contractors pay tax to their suppliers for purchases of materials and supplies they use in fulfilling their services.

Landscape design services are taxable when they are performed on new construction, residential property or business property.

The gross receipts for labor charges to build stone fireplaces in the new construction of buildings or in existing one, two or three family, exclusively residential, owner-occupied homes are not taxable pursuant to section 12-407(2)(i)(I) of the Connecticut General Statutes, as amended by Public Act No. 89-251. Labor charges to build stone fireplaces in existing commercial, industrial or income-producing real property are subject to sales and use tax.

LEGAL DIVISION

September 26, 1989

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