Which customer sales were exempt from Connecticut use tax under Ruling 89-2?

Plain-English summary

The registered retailer generally had to collect use tax on Connecticut sales, measured by the sales price. The ruling excepted sales of spice, cookies, and popcorn other than candy-covered or yogurt-covered popcorn.

Sales to Connecticut municipalities or their agencies were exempt only when the government customer was billed directly, paid the retailer directly by a check drawn on its own account, and gave the retailer a properly completed Governmental Agency Exemption Certificate at the time of sale.

Sales to elementary or high school classes were taxable because the classes were not municipal agencies.

Other sales were taxable unless they were sales for resale. A resale purchaser had to give the retailer a properly completed Resale Certificate at the time of sale.

What this means for you

The historical ruling required both an eligible government purchaser and specific billing, payment, and certificate documentation. A connection to a public school did not by itself qualify a class as a municipal agency.

Common questions

Were sales to municipalities exempt automatically? No. Direct billing, direct payment, and a completed exemption certificate were required.

Were school classes municipal agencies? No.

What documented a sale for resale? A properly completed Resale Certificate delivered at the time of sale.

Citations and references

• No statute or regulation was cited by section number in the ruling text.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-2

Original ruling text

Ruling 89-2, Exemption - Governmental

Ruling 89-2

Exemption - Governmental

Your company is registered to collect use tax. As a retailer making sales of tangible personal property for storage, acceptance, consumption or other use in this state, your company is required to collect use tax from its customers on all such sales other than sales of spice, cookies and popcorn (other than candy-covered or yogurt-covered popcorn). The measure of the tax is the sales price charged by your company to its customers.

Sales to Connecticut municipalities or their agencies are exempt from use tax. The municipality or its agency must be billed directly by your company and must pay your company directly by check drawn on its checking account. The municipality or its agency must also issue a properly completed "Governmental Agency Exemption Certificate" (copy enclosed) to your company at the time of the sale by your company. Sales to high school or elementary school classes are subject to use tax because such classes are not municipal agencies.

All other sales, excluding sales for resale, are subject to use tax. If a sale for resale if involved, the purchaser must issue a properly completed Resale Certificate to your company at the time of the sale by your company.

LEGAL DIVISION

March 2, 1989