Ezel / Tax Rulings / CT
CT Ruling 89-150 Sales and Use Taxes 1989-10-19

What documentation, billing, payment, and exemption-certificate conditions applied to Connecticut sales-tax exemption for federal credit unions?

Short answer: The credit union had to establish federal status with organization documents, be billed directly, pay directly, and give each retailer a completed certificate for each sale. Employee-billed purchases were not exempt even when reimbursed.

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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 applying the federal credit-union purchase exemption then in effect. Its result depended on documented federal status, direct retailer billing and credit-union payment, and a completed exemption certificate for each retailer and sale; employee purchases and reimbursement did not qualify. 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 your specific situation.
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)

Plain-English summary

Federal credit unions organized under federal law were exempt from state taxation. To establish entitlement, the credit union had to submit its organization certificate and approval of organization certificate to DRS.

Retail sales to a federal credit union were exempt only when the retailer billed the credit union directly and the credit union paid directly. A purchase billed to and paid by an employee was not exempt even if the credit union later reimbursed the employee.

A completed exemption certificate had to be furnished to each retailer for each sale.

What this means for you

The historical exemption required both qualifying federal status and strict transaction-level documentation, billing, and payment.

Common questions

Were sales to federal credit unions exempt? Yes under the stated conditions.

What status documents were required? The organization certificate and approval of organization certificate.

Did employee reimbursement qualify? No.

Was one exemption certificate enough for all retailers and sales? No; the ruling required a completed certificate for each retailer on each sale.

Citations and references

  • 12 U.S.C. §§ 1753, 1754, and 1768, as cited in the ruling.
  • Conn. Gen. Stat. § 12-412(2), as cited in the ruling.

Source

Original ruling text

Ruling 89-150, Exemptions

Ruling 89-150

Exemptions

Federal credit unions organized under Chapter 14 of Title 12 of the United States Code are exempt from all taxation imposed by any State; 12 U.S.C. §1768. (A copy of the Organization Certificate; 12 U.S.C. section 1753; and a copy of the Approval of Organization Certificate; 12 U.S.C. section 1754; must be submitted to this agency by the federal credit union to establish entitlement to the exemption.)

Therefore, the sales and use tax does not apply to sales made to federal credit unions; Conn. Gen. Stat. section 12-412(2).

The exemption from sales and use taxes applies only if the retailer bills the credit union directly, and the bill is paid directly by such credit union. The exemption does not apply when the retailer bills an employee of the credit union and the bill is paid by such employee, even if such employee is subsequently reimbursed by the credit union.

Please note that a completed exemption certificate must be furnished to each retailer on each sale.

LEGAL DIVISION

October 19, 1989

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