Were landscaping and related pond-excavation charges taxable under Connecticut Ruling 89-78?

Plain-English summary

The total gross receipts from landscaping services were taxable under the historical ruling. That included landscaping for new construction, existing residential property, and existing commercial property. Building ponds counted as landscape design.

Excavation performed as an integral part of a landscaping job was also taxable. An excavator could avoid charging tax to the landscaper only when the landscaper furnished a bona fide resale certificate. When a residential property owner hired the excavator directly to build a pond, the excavator taxed its total sales price.

The official page says AN 94(4) obsoleted the ruling in part and AN 2000(8) obsoleted it.

What this means for you

The historical ruling treated both the overall landscaping service and integrated pond excavation as taxable, while permitting a documented resale transaction between subcontractor and landscaper. Because the ruling is obsolete, current projects require current guidance.

Common questions

Were landscaping services for new construction taxable? Yes under the ruling, as were services for existing residential and commercial property.

Did pond construction count as landscaping? Yes. The ruling treated building ponds as landscape design.

Could an excavator accept a resale certificate from a landscaper? Yes, if it was a bona fide certificate under the cited regulation.

Citations and references

• Conn. Gen. Stat. § 12-407(2)(i)(X), as amended by Public Act No. 89-251, as cited in the ruling.
• Conn. Agencies Regs. § 12-426-1, as cited in the ruling.
• AN 94(4) and AN 2000(8), identified by the official page as obsoleting this ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-78

Original ruling text

Ruling 89-78, Contractors

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

This Ruling has been obsoleted in part by AN 94(4) and obsoleted by AN 2000(8)

The total gross receipts for landscaping services are subject to sales and use tax pursuant to section 12-407(2)(i)(X) of the Connecticut General Statutes, as amended by Public Act No. 89-251. Landscaping services rendered to new construction, existing residential real estate and existing commercial real property are taxable. Building ponds are considered to be a part of landscape design services.

The total charge for excavating services, that are performed as an integral part of landscaping jobs, e.g., building ponds, is subject to the sales and use tax, unless the landscaper furnishes the excavator with a bona fide Resale Certificate pursuant to section 12-426-1 of the Regulations of Connecticut State Agencies. Therefore, the excavating contractor would apply the sales and use tax to his total sales price for excavating services to build a pond on residential property when he is hired by the residential property owner.

LEGAL DIVISION

September 6, 1989