Which accessory tools, tool-holder parts, and measuring devices received Connecticut's manufacturing exemption or reduced historical tax rate?

Plain-English summary

DRS issued a product-by-product manufacturing classification under the historical rules:

• Exempt: accessory tools and production-machine tool holders used directly in fabrication; collets performing the same function as exempt chucks; and hand micrometers used during actual fabrication.
• Tool-holder parts: generally not qualifying repair/replacement parts, so taxed at the full 8% historical rate.
• Listed machinery parts: turret tool adapters, split bushing adapters, spindle brakes, feeding fingers, stock stops, and feed-tube bushings received the 5.5% rate when bought as repair/replacement parts, but 8% when bought as components for constructing a machine.
• Cam templates: taxable at 8% because they were not tools used directly in fabrication.
• Post-production inspection tools: taxable at 8%, even where the same device would be exempt if used within production.

What this means for you

Function and timing controlled: direct contact during fabrication supported exemption, while post-production inspection did not. The stated rates are historical and must be verified before current use.

Common questions

Were tool holders exempt? Yes, as accessory tools.

Were all tool-holder parts taxed at the reduced rate? No. The ruling generally denied the reduced rate to those parts.

When was a micrometer exempt? When used directly during fabrication, not after fabrication as an inspection device.

Citations and references

• Conn. Gen. Stat. § 12-412(18).
• Conn. Agencies Regs. § 12-426-11b(a)(13).

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 90-62

Original ruling text

Ruling 90-62, Manufacturing / Accessory Tools

Ruling 90-62

Manufacturing / Accessory Tools

It is the Department's position that tools which come into direct contact with and are used in the fabrication of finished products to be sold are used directly in actual fabrication. Accordingly, "accessory tools" and "production machine tool holders" are exempt from sales tax under Section 12-412(18) of the Connecticut General Statutes. The Department considers tool holders to be accessory tools and, therefore, not subject to sales tax.

However, with respect to the sale of parts of such production machine tool holders, the Department does not consider such parts to be repair or replacement parts exclusively for use in production machinery. Therefore, such parts do not qualify for the reduced rate of 5.5% and must be taxed at the full 8% rate.

The Department treats the following items as machinery parts, not as tools or tool holders: turret tool adapters, split bushing adapters, spindle brakes, feeding fingers, stock stops and feed tube bushings. Thus, these items are purchased as repair or replacement parts and are taxable at the 5.5% rate. However, if they are purchased as a component part for the construction of a machine, they are taxed at the full 8% rate.

It is also a longstanding position of the Department that collects are not subject to the sales tax because they perform the same function as a chuck. Chucks are listed as an exempt accessory tool under Section 12-426-11b(a)(13) of the Regulations of Connecticut State Agencies.

The Department does not consider cam templates to be a tool used directly in the actual fabrication of a product to be sold. Therefore, they are subject to tax at the full 8% rate.

On the subject of "measuring" tools, it is the Department's position that tools, such as hand micrometers, are exempt when used directly in the actual fabrication of the product within the manufacturing production process. When used as inspection devices after the fabrication of the product, such items are taxable at the full 8% rate.

James F. Meehan

Commissioner

September 14, 1990