How were environmental assessments, remediation planning, underground-tank removal, ancillary design, and surveying inputs taxed under Connecticut Ruling 89-161?

Note -- partially obsolete historical guidance. DRS marks this information "not current" and states that Announcement (AN) 94(3) obsoleted the ruling in part.

Plain-English summary

Environmental site assessments were not taxable before building design and construction, during new construction, or on existing commercial, industrial, or income-producing property. Assessments of nonphysical building aspects, including air, soil, and water testing, were not taxable.

Ancillary sewer and septic design was not taxable. Licensed professional-engineer consulting on contaminated-site remediation or underground-storage-tank removal was not taxable, and the tank removal itself was not taxable.

X Engineering was the final consumer of materials and taxable services used to perform its work, including land surveying, and therefore owed tax on those purchases.

What this means for you

The historical ruling separated the environmental service sold from taxable inputs consumed in delivering it. AN 94(3) later obsoleted the guidance in part.

Common questions

Were environmental site assessments taxable? No under the ruling.

Were air, soil, and water testing taxable? No.

Were remediation planning and underground-tank removal taxable? No.

Who owed tax on surveying and materials? The engineer as final consumer.

Citations and references

• Announcement (AN) 94(3) -- identified by DRS as partly obsoleting this ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-161

Original ruling text

Ruling 89-161, Engineering

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

Ruling 89-161

Engineering

This Ruling has been obsoleted in part by  AN 94(3)

Environmental site assessments are not subject to the sales tax either when rendered prior to the design and construction of a building, during new construction, or to existing commercial, industrial or income-producing property. Such assessments or inspections to non-physical aspects of a building are not taxable. Thus, air, soil and water testing are not taxable.

Ancillary designs, such as sewers, septic systems, etc., are not subject to the sales tax.

Consulting services rendered by a licensed professional engineer with respect to planning the remediation of a contaminated site or the removal of underground storage tanks, either from a vacant site or a site with structures on it, are not subject to the sales tax. Likewise, the removal of underground storage tanks is not subject to sales tax.

X Engineering is the final consumer of materials and taxable services, such as land surveying, which X Engineering uses in rendering its services. Accordingly, X Engineering must pay sales tax on these purchases.

LEGAL DIVISION

October 27, 1989