Which road, parking-lot, demolition, HVAC, appliance, and residential installation services qualified as new construction under Connecticut Ruling 89-194?

Note -- obsolete historical guidance. DRS marks this information "not current" and states that Announcement (AN) 94(4) obsoleted the ruling.

Plain-English summary

DRS treated services to industrial, commercial, and income-producing property as taxable. It said the new-construction exemption did not cover new sewer and gas pipes, private-road or driveway resurfacing and patching, old-pipe removal, HVAC installation in an existing building, or demolition unless the complete demolition of a parking lot or road was part of a new-construction contract.

The exemption did cover a new road and a new parking lot or expansion when the old road or parking lot was completely removed. Demolition was included when part of that new-construction contract.

Driveway sealing was taxable maintenance. Repairs to air conditioners, dishwashers, garbage disposals, hot-water heaters, furnaces, and oil burners were taxable. Installation of listed plumbing and appliance items in new construction or an existing one-, two-, or three-family owner-occupied dwelling was not taxable. Replacing municipal sewer lines beneath a public road was also not taxable.

What this means for you

The historical classification was highly fact-specific. AN 94(4) later obsoleted the ruling.

Common questions

Were new roads and parking lots exempt? Yes under the stated new-construction conditions.

Were driveway resurfacing, patching, and sealing taxable? Yes.

Were repairs to listed household systems and appliances taxable? Yes.

Were listed installations in qualifying owner-occupied one- to three-family dwellings taxable? No under the ruling.

Was municipal sewer-line replacement beneath a public road taxable? No.

Citations and references

• Announcement (AN) 94(4) -- identified by DRS as obsoleting this ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-194

Original ruling text

Ruling 89-194, Contractors

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

Ruling 89-194

Contractors

This Ruling has been obsoleted by   AN 94(4)

Services to industrial, commercial and income-producing property are subject to sales tax.

The new construction exemption for services to the above properties does not apply to the following:

new sewer and gas pipes;

resurfacing or patching of a private road or driveway;

destruction or demolition of the property including the paved surfaces, unless the entire charge for the service involving the total demolition of a parking lot or road is part of a new construction contract;

installation of a HVAC system in an existing building; and

removal of old pipe.

The new construction exemption would apply to the following:

construction of a new road; and

construction of a new parking lot or expansion of an existing one (old road or old parking lot must be completely removed for new construction exemption to apply), including demolition as long as it is part of the contract for new construction.

The following services are taxable to industrial, commercial and income-producing properties:

driveway resurfacing; and

driveway patching (taxable to a condominium association based upon the ration of non-owner occupied units to total units).

Driveway sealing is considered to be a taxable maintenance service.

Repairs to an air conditioning unit, dishwasher, garbage disposal, hot water heaters, furnace and oil burner are considered to be a taxable service.

The following are not subject to tax:

installation of a sink, toilet, bathtub, dishwasher, garbage disposal, hot water tank, furnace and oil burner in new construction or an existing one, two or three family owner-occupied dwelling; and

replacement of sewer lines on property owned by a municipality under a public road.

LEGAL DIVISION

November 7, 1989