Ezel / Tax Rulings / CT
CT Ruling 89-255 Sales and Use Taxes 1989-12-07

Could a plumbing contractor act as a retailer, issue resale certificates for parts, and charge tax to customers?

Short answer: Yes if the contractor qualified and was registered as a retailer of plumbing supplies, materials, or parts. Although contractors generally consume their materials and pay tax when buying them, a contractor-retailer could buy resold parts with resale certificates and charge tax on the total parts price.

Apply this to your situation

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 contractor-retailer rules then in effect to a client selling plumbing supplies, materials, or parts. The retailer conclusion was conditional on registration with DRS, and the published text does not describe the specific parts or transactions or state that the ruling remains current. 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

DRS began with the general rule: contractors are the final consumers of materials used in their services and must pay applicable sales and use tax when buying those materials.

The cited regulation allowed a different result when a contractor operated as a retailer and resold parts. Such a contractor could issue resale certificates for the parts, but then had to charge tax on the total sales price billed to customers for them.

Based on the information submitted, DRS said the client appeared to be operating as a retailer if registered with the Department as a retailer of plumbing supplies, materials, or parts.

What this means for you

The historical ruling distinguished materials consumed in contracting from parts resold as a registered retailer. Retailer status brought both resale-certificate treatment on purchase and a duty to tax the customer-facing parts price.

Common questions

Are contractors normally treated as consumers of materials? Yes under the ruling.

Could this contractor issue resale certificates for parts? Yes if operating and registered as a retailer under the cited rule.

What amount did the contractor-retailer have to tax? The total sales price billed to customers for the parts.

Citations and references

  • Conn. Agencies Regs. § 12-426-18(b)(1)(2), as cited in the ruling.

Source

Original ruling text

Ruling 89-255, Contractors

Contractors are generally the final consumer of the materials that they purchase which are used in performing their services, and they must pay the applicable sales and use tax for said purchases. However, Conn. Agencies Regs. §12-426-18(b)(1)(2) states situations whereby contractors are considered to operate as retailers and may issue resale certificates for parts that they resell to their customers. In this situation, the contractor/retailer must apply tax to the total sales price billed to his customers for the parts.

Based on the information presented in your letter, your client appears to be conducting business as a retailer provided he is registered with this Department as a retailer of plumbing supplies, materials and/or parts.

LEGAL DIVISION

December 7, 1989

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