When could architects use resale certificates to buy blueprints and other printing or duplication work under Connecticut Ruling 89-99?

Plain-English summary

Architects could use resale certificates to purchase printing and duplication work that they did not consume. The permitted category was work passed directly to clients or to others involved in the bid process.

Any other use by the architect counted as consumption, requiring the architect to pay tax. The ruling cautioned architects and reprographic sellers to use and accept resale certificates with good judgment and good faith. Blanket resale certificates would be closely scrutinized.

The reprographic seller also had to satisfy the cited good-faith requirement. In grey or marginal cases where equity required, the Department said it would seek use tax from the architect.

What this means for you

The historical ruling distinguished direct pass-through copies from printing or duplication the architect used in any other way. It placed responsibilities on both sides: architects had to avoid overbroad certificates, and reprographic sellers had to evaluate them in good faith.

Common questions

Could an architect buy all blueprints tax-free under a blanket resale certificate? No. The ruling said blanket certificates would be scrutinized closely.

What qualified for resale treatment? Printing and duplication passed directly to clients or others involved in bidding.

What counted as consumption by the architect? Any use other than that direct pass-through.

Who could owe use tax in a marginal case? The ruling said the Department would seek it from the architect where equity dictated.

Citations and references

• Conn. Gen. Stat. § 12-410, as cited in the ruling.
• Reg. Conn. State Agencies § 12-426-1, as cited in the ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-99

Original ruling text

Ruling 89-99, Architectural Services

This letter is in response to the concerns raised both by the architectural profession and the printing and duplicating ["reprographic"] industry with respect to the sales and use tax treatment of the sale of blueprints.

Prior to the imposition of the sales tax on architectural services, architects paid sales tax on the purchase price of the blueprints. With the enactment of the sales tax on their services, architects have voiced their concern that the sales tax will be imposed both at the time of their purchase of all reprographic work and again on the bill to their clients when they have not consumed the printing and duplicating, but have merely passed them on in the performance of their services for their clients. The reprographic industry, in turn, has asked the Department for guidance in this area to ensure certainty in their billing practices.

After a thorough analysis of the problems faced by both parties, it is our decision to permit the use of resale certificates in the purchase of printing and duplicating that will not be consumed by the architect.

In making this ruling, I caution both the architects and the reprographic industry that it is incumbent upon them to exercise good judgment and good faith in their use and acceptance of resale certificates. As participants in the profession, both parties are charged with having the knowledge that certain types of printing and duplicating are typically used for certain purposes, i.e., either they are consumed by the architect or are passed through in the rendering of architectural services for a client. Consumption or use by the architect includes any use by the architect other than a direct pass through to their clients or others involved in the bid process.

The Department expects architects to be forthright in their use of resale certificates and to pay tax in those situations where they are the consumers of printing and duplicating. The use of blanket resale certificates will be scrutinized closely by the Department. We expect the reprographic industry to meet the good faith requirement set forth in section 12-410 of the Connecticut General Statutes and section 12-426-1 of the Regulations of Connecticut State Agencies.

At the inception of these rules, the Department recognizes that there will be some "grey areas" and marginal situations. Where equity dictates, the Department will seek the use tax from the architects.

TIMOTHY F. BANNON

COMMISSIONER

September 20, 1989