Ezel / Tax Rulings / CT
CT Ruling 90-60 Sales and Use Taxes 1990-08-10

Could a leasing company issue resale certificates for labor on repairs, maintenance, and painting of property held exclusively for lease?

Short answer: Yes under this historical ruling, effective for services on or after September 1, 1990. A lessor could issue a resale certificate for repair and maintenance services -- including vehicle painting -- performed on tangible personal property used exclusively for leasing. The certificate was not allowed if the lessor also used the property. The ruling superseded Ruling 89-29 but was later marked not current and obsoleted by AN 2000(8).

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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 based on the leasing facts and law then in effect. DRS expressly marks it 'not current' and says it was obsoleted by Announcement (AN) 2000(8). It also superseded Ruling 89-29. Current resale-certificate treatment for repair and maintenance services must be confirmed. 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 allowed a leasing company to issue resale certificates for repair and maintenance services performed on tangible personal property used exclusively for leasing. The treatment covered the labor portion and, by superseding Ruling 89-29, also allowed a resale certificate for painting leased vehicles.

The rule did not apply when the lessor also used the property. The ruling was effective for services rendered on or after September 1, 1990.

What this means for you

Exclusive rental use was the key condition. Mixed lessor use fell outside the ruling, and AN 2000(8) later obsoleted the guidance.

Common questions

Did the ruling cover repair labor? Yes, for exclusively leased property.

Did it cover vehicle painting? Yes, and it superseded Ruling 89-29 on that point.

Could the lessor also use the asset? No.

Citations and references

  • Conn. Agencies Regs. § 12-426-25(e).
  • Conn. Gen. Stat. § 12-407(2)(i)(DD).
  • Ruling 89-29 -- superseded by this ruling.
  • Announcement (AN) 2000(8) -- identified by DRS as obsoleting it.

Source

Original ruling text

Ruling 90-60, Leasing of Tangible Personal Property / Repair or Maintenance Services

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

Ruling 90-60

Leasing of Tangible Personal Property

Repair or Maintenance Services

This Ruling has been obsoleted by   AN 2000(8)

FACTS:

Section 12-426-25(e) of the Regulations of Connecticut State Agencies allows resale certificates to be issued in the purchase of parts and accessories used directly in the rental or leasing or used in the repair of tangible personal property used exclusively for leasing purposes. Section 12-407(2)(i)(DD) of the General Statutes taxes "any repair or maintenance service to any item of tangible personal property . . ."

ISSUE:

Whether companies in the business of leasing tangible personal property are also permitted to issue resale certificates for the labor portion of repair and maintenance services rendered to their tangible personal property.

RULING:

Resale certificates may be issued when repair and maintenance services are rendered to tangible personal property used exclusively for leasing purposes. The use of resale certificates in this situation is not permitted when the tangible personal property is used by the lessor. This ruling is effective for services rendered on or after September 1, 1990.

In addition, this ruling supersedes Ruling 89-29 so that a leasing company may issue a resale certificate when purchasing painting services rendered to vehicles used exclusively for leasing purposes.

LEGAL DIVISION

August 10, 1990

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