Ezel / Tax Rulings / CT
CT Ruling 90-17 Sales and Use Taxes 1990-02-05

Were auction sales of bank-repossessed tangible personal property and the auctioneer's fee to the bank taxable?

Short answer: Yes under this historical ruling. The auctioneer had to collect tax on total gross receipts from selling the repossessed property. The auctioneer's fee charged to the bank was also taxable as a sales-agent service. DRS marks the ruling not current and obsoleted by AN 2000(8).

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1990
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 1990 Connecticut Department of Revenue Services Ruling reflecting the auction-sale and sales-agent rules then in effect. DRS expressly marks it 'not current' and says Announcement (AN) 2000(8) obsoleted it. Its treatment of repossessed-property receipts and auctioneer fees should not be assumed current or applied to different sale arrangements. 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)

Note -- obsolete historical guidance. DRS marks this ruling "not current" and states that it was obsoleted by Announcement (AN) 2000(8).

Plain-English summary

DRS said sales of repossessed tangible personal property were subject to sales and use tax.

When a bank repossessed property and sold it at auction, the auctioneer had to collect tax on the total gross receipts from the sale.

The auctioneer's fee charged to the bank was separately taxable because DRS classified the auctioneer's selling work as a sales-agent service under the historical statute.

What this means for you

The historical ruling imposed tax at both relevant levels: the auction sale to the buyer and the auctioneer's compensation from the bank for arranging that sale.

Common questions

Did repossession make the property sale exempt? No.

Who collected tax on the auction sale? The auctioneer.

Was the auctioneer's fee taxable too? Yes, as a sales-agent service.

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(U), as amended by 1989 Conn. Pub. Acts 251.
  • Announcement (AN) 2000(8) -- identified by DRS as obsoleting this ruling.

Source

Original ruling text

Ruling 90-17, Repossessed Property

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

Ruling 90-17

Repossessed Property

This Ruling has been obsoleted by   AN 2000(8)

It is the position of the Department of Revenue Services that the sales of repossessed tangible personal property are subject to the sales and use tax.

When a bank repossesses tangible personal property and sells said property at auction, the auctioneer must apply the sales tax to the total gross receipts for the sales of the personal property. In addition, the auctioneer's fee to the bank for selling the tangible personal property is taxable, because this service is considered to be a sales agent service pursuant to Section 12-407-(2)(i)(U) as amended by Public Act 89-251.

LEGAL DIVISION

February 5, 1990

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