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CT Ruling 90-82 Sales and Use Taxes 1990-12-27

How did Connecticut historically tax services provided to condominium associations with both owner-occupied and leased units?

Short answer: The 1990 ruling used three categories. Some services -- including landscaping, maintenance, janitorial, exterminating, design, locksmith, window cleaning, pool work, and tangible-property repair -- were taxable in all situations. Property management and listed building trades were taxable only in the ratio of leased units to total units, not by common-interest percentages. Accounting, bookkeeping, legal, insurance, non-design engineering, environmental testing, and residential utility sales were not taxed. 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 official 1990 Connecticut Department of Revenue Services guidance on condominium-association services. DRS expressly marks it 'not current' and says it was obsoleted by Announcement (AN) 94(4). The listed service categories reflect Public Act 89-251 and the law then in effect; current classifications and apportionment rules must be verified. 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). Its service lists and allocation rule should not be assumed current.

Plain-English summary

This ruling grouped condominium-association services into three historical sales-tax categories.

  • Taxable in all situations: architectural and design work; repair of electrical/electronic devices including refrigeration and air conditioning; surveying; landscaping; locksmith work; window cleaning; maintenance such as snow removal, carpet cleaning, house washing, pavement sealing, and line painting; janitorial and exterminating work; pool cleaning; and tangible-personal-property repair.
  • Taxable only in the leased-unit ratio: property management, electrical, plumbing, painting, carpentry, roofing, siding, foundation, plastering, heating, demolition, pointing, refuse disposal, and repaving. The percentage was leased units divided by total units, not each unit's common-interest share.
  • Not taxable: accounting, bookkeeping, legal, insurance, non-design engineering, and environmental testing. Residential gas, electricity, and heating fuel were also not taxed.

What this means for you

The ruling shows how Connecticut historically separated services taxed regardless of residential use from building services apportioned by income-producing units. DRS has obsoleted it, so verify every current category.

Common questions

How was the taxable condo percentage calculated? Leased units divided by total units.

Was the common-interest percentage used? No.

Can associations use this list today? No. DRS marks it obsolete by AN 94(4).

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(I).
  • Conn. Agencies Regs. § 12-426-26, including subsection (f).
  • Public Act 89-251.
  • Announcement (AN) 94(4) -- identified by DRS as obsoleting the ruling.

Source

Original ruling text

Ruling 90-82, Condominium Associations

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

Ruling 90-82

Condominium Associations

This Ruling has been obsoleted by   AN 94(4)

This ruling sets forth the application of the sales and use tax on services rendered to condominium associations.

Section 12-407(2)(i)(I) of the General Statutes and Section 12-426-26 of the Regulations of Connecticut State Agencies tax services rendered to industrial, commercial or income producing property. Regulation 26 does not tax services rendered in new construction or to residential real estate.

With respect to condominium associations, Regulation 26(f) provides that services rendered to condominiums, including common grounds, are taxable on the same proportion as the number of leased units bears to the total number of units in the complex. This proportion is based on straight ratio of income-producing units to all units, not on the actual percentage of common interest each unit represents within the condominium association.

In its enactment of Public Act 89-251 which expanded the categories of taxable services, the General Assembly (1) imposed the sales tax on several new services and (2) removed certain other services from the category of services to industrial, commercial or income producing property to make them taxable whenever rendered to real property. Among the services removed from Regulation 26 treatment under (2) are landscaping and horticultural, maintenance, janitorial and exterminating.

Enumerated services subject to tax in all situations include, but are not limited to, the following:

architectural, building engineering and building planning or design, including interior design and decorating; repair to any electrical or electronic device including refrigeration and air-conditioning systems; land surveying; landscaping and horticultural; locksmith; window cleaning; maintenance (includes snow removal, carpet cleaning, house washing, pavement sealing and painting lines); janitorial; exterminating (pest control); swimming pool cleaning and maintenance; repair or maintenance to any item of tangible personal property.

Services taxable to the percentage of non-owner occupied units divided by total units include, but are not limited to, the following:

property management; electrical; plumbing; painting; carpentry; roofing; siding; foundation; plastering; heating; demolition; pointing; refuse disposal; repaving.

Services not subject to tax include, but are not limited to, the following:

accounting, bookkeeping, legal, insurance, non-design engineering and environmental testing.

The sale of gas, electricity and heating fuel for any residential dwelling is not subject to sales tax.

LEGAL DIVISION

December 27, 1990

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