Ezel / Tax Rulings / CT
CT Ruling 90-18 Sales and Use Taxes 1990-02-05

When were construction-management services taxable for new construction, owner-occupied homes, and existing business property?

Short answer: Under this historical ruling, construction management for new construction and existing one-, two-, or three-family exclusively residential owner-occupied property was not taxable. The same service for existing commercial, industrial, or income-producing property was taxable. DRS marks the ruling not current and obsoleted by AN 94(4).

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 construction-management rules then in effect. DRS expressly marks it 'not current' and says Announcement (AN) 94(4) obsoleted it. Its new-construction, residential, and business-property distinctions should not be assumed current or applied to different property uses. 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) 94(4).

Plain-English summary

DRS divided construction-management services by the project and property:

  • Not taxable: services for new construction and for existing one-, two-, or three-family property that was exclusively residential and owner-occupied.
  • Taxable: services for existing commercial, industrial, or income-producing real property.

The taxable category fell under the historical real-property services provision.

What this means for you

The historical result depended on whether work involved new construction, qualifying small owner-occupied residential property, or existing business/income-producing property. AN 94(4) later obsoleted the ruling.

Common questions

Was all residential work exempt? No. The ruling specifies existing one-, two-, or three-family property that was exclusively residential and owner-occupied.

Was construction management for new construction taxable? Not under this ruling.

What existing property was taxable? Commercial, industrial, or income-producing real property.

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(I), as amended by 1989 Conn. Pub. Acts 251.
  • Announcement (AN) 94(4) -- identified by DRS as obsoleting this ruling.

Source

Original ruling text

Ruling 90-18, Construction Management

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

Ruling 90-18

Construction Management

This Ruling has been obsoleted by   AN 94(4)

Construction management services rendered to new construction or existing one, two or three family exclusively residential owner occupied real property are not taxable.

Construction management services rendered to existing commercial, industrial or income producing real property are subject to sales and use tax pursuant to Section §12-407(2)(i)(I) of the Connecticut General Statutes as amended by Public Act 89-251.

LEGAL DIVISION

February 5, 1990

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