This Special Notice was superseded by SN 92(13.1)
1992 Legislative Changes Affecting Sales and Use Taxes
PURPOSE: This Special Notice describes changes affecting the Sales and Use Taxes Act and the enactment of a Tourism Fund Surcharge Tax by the Regular and Special Sessions of the 1992 General Assembly. This notice is intended to provide general information to taxpayers and should not be considered a ruling or regulation issued by the Department of Revenue Services.
EFFECTIVE DATE(S): July 1, 1992, except where otherwise noted.
STATUTORY AUTHORITY: 1992 Conn. Pub. Acts 5 and 17 (May Spec. Sess.); 1992 Conn. Pub. Acts 184, 188, 193 and 202.
SURCHARGE ON PASSENGER VEHICLE LEASE OR RENTAL: Effective July 1, 1992, a Tourism Fund Surcharge Tax of $1.00 is imposed on the lease or rental of a passenger motor vehicle for each day (or portion thereof) up to 30 days. A passenger motor vehicle, as defined in C.G.S. Sec. 14-1 (59), is a noncommercial vehicle designed to carry 10 or fewer passengers.
The surcharge applies to all rental or lease agreements of 30 days or less where the vehicle is delivered in this state, regardless of where the vehicle is subsequently used. (NOTE: Exemption from the sales and use taxes does not entitle the lessee or renter to an exemption from the Tourism Fund Surcharge Tax.)
The surcharge is in addition to other taxes imposed on the lease or rental; however, sales and use taxes are computed on the gross receipts of the lease or rental, exclusive of the surcharge.
With respect to existing leases of 30 days or less, the $1.00 surcharge applies to each day of the lease on or after July 1, 1992.
Businesses engaged in the leasing or rental of motor vehicles will receive additional information from this Department within the next few weeks about registration and filing requirements for the Tourism Fund Surcharge Tax. If a lessor or renter of passenger motor vehicles who is leasing or renting for 30 days or less does not receive an additional mailing by July 20, 1992, a letter requesting such information and including the business' Connecticut tax registration number and federal identification number should be addressed to: Registration Unit, Department of Revenue Services, 25 Sigourney Street, Hartford, CT 06106.
RATES FOR SALES AND USE TAXES: The rate for sales and use taxes remains 6% and the rate for room occupancy tax remains 12%. However, the 2.5% tax rate on aviation fuel is repealed.
NEW SERVICES SUBJECT TO THE ROOM OCCUPANCY TAX: The 12% room occupancy tax applies to rental of space in a campground on or after July 1, 1992 for a period of 30 consecutive calendar days or less.
NEW GOODS AND SERVICES SUBJECT TO THE SALES AND USE TAXES: Effective July 1, 1992, the sales and use taxes will apply to the following goods and services:
NEW SALES AND USE TAXES EXEMPTIONS FOR MANUFACTURERS: A five-year phase-in exemption from the sales and use taxes of 10% in the first year and an additional 10% in each of the following 4 years becomes effective with purchases made on or after January 1, 1993. The exemption applies to a percentage of the gross receipts for certain items purchased by those engaged in manufacturing, processing or fabricating of products to be sold, in any preparatory process, or in measuring or testing of such products. Further information on this subject will be contained in a Special Notice which will be available from the Department before the effective date.
CHANGES TO THE SALES AND USE TAXES ACT: The following clarifications were made by the legislature:
CHANGES TO THE DEFINITION OF SALES PRICE: Effective July 1, 1992 the definition of sales price is changed as follows:
A retailer of a taxable service described in Section 12-407 (2) (i) is not permitted to deduct from the sales price of the service any charges for compensation or employment related expenses, whether or not separately stated, that are paid to or on behalf of employees of the retailer.
However, the sales price does not include the amount charged for separately stated compensation, fringe benefits, workers' compensation, and payroll taxes or assessments paid to or on behalf of employees of a retailer rendering property or business management services provided the employees perform such services solely for the service recipient at its property or business premises.
CHANGE IN USE OF RESALE CERTIFICATES: Effective June 19, 1992, an individual registered to collect sales and use taxes may purchase on a resale basis personal property he intends to use in the delivery of landscaping or horticultural services, provided the total sales price of the landscaping and horticultural services, including any charge for the property purchased on resale, is taxable. (The property shall be considered used in the delivery of the service if it is physically incorporated on or physically applied to the premises of the service recipient.)
NEW FILING DATE FOR INDIVIDUAL USE TAX RETURNS: The use tax return filing date for taxable year 1992 and thereafter has been changed from January 31 to April 15 in the year following the taxable year. Individuals who purchase taxable goods out-of-state for use in Connecticut must file a use tax return on or before April 15 if Connecticut sales tax was not collected by the retailer.
CHANGE IN RULES FOR SALES OF VESSELS TO OUT-OF-STATE RESIDENTS: Effective July 1, 1992, retailers making sales of vessels to out-of-state residents must obtain an affidavit or other evidence of the purchaser's state of residence in order to charge the purchaser a tax rate that is the lesser of the Connecticut sales tax or the rate in effect in the purchaser's home state. (Previously, retailers making such sales were also required to obtain proof from the purchaser of registration in the buyer's home state within 10 days of the sale.)
NEW EXEMPTIONS FROM THE SALES AND USE TAXES: Sales and use taxes do not apply to the sale, rental, or lease of the following goods delivered on or after July 1, 1992 or to the following services rendered on or after July 1, 1992, regardless of the date of payment:
CHANGES TO TAXABILITY OF AMUSEMENT AND RECREATION SERVICES: Effective July 1, 1992, certain rules for taxing amusement and recreation services are changed:
NOTE: Other amusement and recreation services provided by these entities nor provided in a facility owned or managed by the federal, state or municipal government are exempt from the tax. However, amusement and recreation services (including swimming, golfing and other athletic or sporting activities) remain fully taxable when provided by organizations other than those listed above.
*Golf services on municipally-owned golf courses become taxable on or after January 1, 1993 and swimming activities offered by the above organizations and government entities become taxable on or after July 1, 1993 unless the swimming or golfing is organized exclusively for participants under age 19.
Amusement and recreations services which are included in a fee or charge for admission, dues and initiation that is subject to the Admissions Tax or the Dues Tax are now exempt from the sales and use taxes if the services are provided without additional charge.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.