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CT Ruling 89-60 Sales and Use Taxes 1989-08-22

How did Connecticut Ruling 89-60 tax plan reviews, property inspections, and construction management services?

Short answer: Specified new-construction and small owner-occupied residential services were not taxable, while services for existing commercial, industrial, or income-producing property were taxable. Work integral to architectural or building-engineering services was also taxable. The ruling is partly obsolete.

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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 1989 Connecticut Department of Revenue Services Ruling is not fully current. The official page says it was obsoleted in part by Announcement 94(3) and in part by Announcement 94(4), so it is provided only as historical reference and should not be used as current authority. It addressed specified plan-review, inspection, construction-management, architectural, and engineering services under the law then in effect. 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 current treatment.
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

The ruling classified plan reviews, property inspections, and construction management services according to the property and how the work related to architectural or engineering services.

Plan reviews and inspections of new-building construction for lenders, performed to check compliance with construction documents, were not taxable. Inspections of existing exclusively residential, owner-occupied one-, two-, or three-family homes were also not taxable. Inspections of existing commercial, industrial, or income-producing real property were taxable.

Construction management for new construction and for existing exclusively residential, owner-occupied one-, two-, or three-family homes was not taxable. Construction management for existing commercial, industrial, or income-producing property was taxable.

Property inspections, plan reviews, and construction management were taxable when performed as an integral part of architectural or building-engineering services.

The official archive says this ruling was obsoleted in part by Announcements 94(3) and 94(4).

What this means for you

Under the historical ruling, the same general service could receive different treatment based on the property and whether it was an integral part of a broader architectural or building-engineering service. Because the ruling is partly obsolete, current classifications must be verified separately.

Common questions

Were plan reviews for new construction taxable? No, when performed for lending institutions to verify compliance with construction documents.

Were inspections of existing commercial property taxable? Yes.

Were construction-management services always exempt? No. Services for existing commercial, industrial, or income-producing property were taxable.

What if the work was integral to architectural or building-engineering services? It was taxable under this ruling.

Citations and references

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

Source

Original ruling text

Ruling 89-60, Engineering

Ruling 89-60

Engineering

This Ruling has been obsoleted in part by   AN 94(3) ;  obsoleted in part by   AN 94(4)

Plan reviews and property inspections rendered to the construction of new buildings for lending institutions to ensure that the building complies with the construction documents are not taxable. Inspection services provided to existing one, two or three family, exclusively residential owner-occupied homes are not taxable. Inspection services provided to existing commercial, industrial or income-producing real property are subject to the sales and use tax.

Construction management services rendered to new construction or existing one, two or three family, exclusively residential owner-occupied homes are not taxable. Construction management services provided to existing commercial, industrial or income-producing property are subject to the sales and use tax.

Property inspections, plan reviews and/or construction management services that are performed as an integral part of an architectural service or building engineering services are taxable.

LEGAL DIVISION

August 22, 1989

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