How did Connecticut source building-engineering services performed or billed across state lines?

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

Plain-English summary

Building-engineering services performed in Connecticut for Connecticut projects were taxable even when billed to out-of-state clients.

Services performed in another state for projects outside Connecticut and billed out of state were not taxable. Connecticut-performed services for out-of-state projects billed to Connecticut clients were not taxable when the service's sole benefit and use occurred outside Connecticut. The same nontaxable result applied to services performed outside Connecticut for out-of-state projects and billed to Connecticut clients when sole benefit and use occurred outside the state.

What this means for you

The historical sourcing framework looked beyond billing address to project location, performance location, and sole benefit and use. AN 94(3) later obsoleted the guidance.

Common questions

Was Connecticut work for a Connecticut project taxable when billed out of state? Yes.

Was out-of-state work for an out-of-state project billed out of state taxable? No.

Could Connecticut work for an out-of-state project billed to a Connecticut client be nontaxable? Yes, when sole benefit and use occurred outside Connecticut.

Could out-of-state work billed to a Connecticut client be nontaxable? Yes, under the same outside-state sole-benefit-and-use condition.

Citations and references

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

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-197

Original ruling text

Ruling 89-197, Engineering

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

Ruling 89-197

Engineering

This Ruling has been obsoleted by   AN 94(3)

Building engineering services became subject to the sales and use tax effective July 1, 1989.

Building engineering services performed in Connecticut for projects located in this state which are billed to clients in another state are subject to sales and use tax.

(Building engineering services performed in another state for projects located outside Connecticut which are billed to clients in another state are not taxable.

Building engineering services performed in Connecticut for projects located outside this state which are billed to Connecticut clients are not taxable provided the sole benefit and use of the service inures out of state.

Building engineering services performed in another state for projects located outside Connecticut which are billed to clients in Connecticut are not subject to sales and use tax provided the sole benefit and use of the service inures outside this state.

LEGAL DIVISION

November 8, 1989