here

Report
Robinson+Cole
Boston | Hartford | New York | Providence | Stamford
Albany | Los Angeles | New London | Sarasota
Felicia S. Hoeniger
Robinson & Cole LLP
280 Trumbull Street
Hartford, CT 06103
Direct 860-275-8309 | Fax 860-275-8299
[email protected] | www.rc.com
Connecticut
Sales and Use Tax
Exemptions and Credits
JUNE 17, 2014
Overview
• Is the transaction subject to tax?
• If the transaction is taxable, is it taxable at a
lower rate?
• If the transaction is taxable, does the law provide
for an adjustment to the tax base?
• Is there an exemption?
• Special rules for tax exempt entities.
• Is there any such thing as a sales tax credit?
Background
• Imposition of Sales Tax and Use Tax
• Most important statutes:
• Sales Tax – C.G.S. § 12-408
• Use Tax – C.G.S. § 12-411
• Definitions – C.G.S. § 12-407
• Exemptions – C.G.S. § 12-412
Is The Transaction Subject to Tax?
• Definition – At retail
• Is the sale “at retail”?
• Sales for Resale
• Sale is not at retail because the purchaser is not the ultimate
consumer
• If purchased on resale, item is taxable when
• sold at retail (sales tax applies) or
• withdrawn from inventory
• Occasional or Casual Sales
• Sale is not at retail because the seller doesn’t normally sell
the items being sold
• Special rules for motor vehicles and vessels
Is The Transaction Subject To Tax?
• Tax Presumptions
• Sales of tangible personal property are
taxable unless specifically excluded or
specifically exempt.
• Sales of services are exempt, unless
specifically taxed.
Is The Transaction Subject to Tax?
• Advertising and Public Relations Services = Taxable
• All sales of advertising or public relations services other
than those related to media or cooperative direct mail
advertising are subject to sales tax under Conn. Gen. Stat. §
12-407(a)(37)(U).
• Exception: Media and cooperative direct mail NOT taxable.
• Media advertising is the sale of time or space in or on a
preexisting medium for general dissemination.
• Preexisting media include television, radio and newspaper
advertisements
• Dissemination of advertising materials is not taxable, unless
the service provider is also involved in the creation of the
advertising materials. Ruling 92-3.
Is The Transaction Subject to Tax?
• Creative Services – Media Exception Limitation
• Advertising targeting to a specific audience is not
considered to be media advertising, and is
therefore taxable.
• Direct mail, as long as it is not cooperative direct
mail such as Val-Pak, is also subject to sales tax.
Is The Transaction Subject to Tax?
• Services to commercial, industrial or incomeproducing property – New construction
exception
• The Department has created an exception for
“new construction.” Ruling 93-10 opens the door.
• Ruling 96-2 closes the door, partly
• where the interior wall studs and floor and ceiling
joists are left in place, new construction does not
occur under Conn. Agencies Regs. §12-407(2)(i)(I)1(c)(1), and therefore sales and use taxes apply
Exceptions to Connecticut’s Sales Tax
Rate of 6.35%
• Computer and data processing services are
taxable at 1%
• The “partial exemption” for Manufacturers,
Fabricators and Processors
• Exempt to the extent of 50% of the sales price.
Computer Services
• Computer and data processing services are taxed at the rate of 1%.
• Following is a list of computer and data processing services that the
Department of Revenue Services says are subject to this tax:
•
•
•
•
•
•
•
•
•
•
Data scanning
Programming, code writing, and creating custom software
Charges for on-line access to computer services
Charges for internet access services and computer time
Storing, filing, retrieving or proving access to information
Designing, implementing or converting systems
Providing consulting services
Conducting feasibility studies
Modification of existing programs
Installation and implementation of software programs and systems even
where such services are rendered in connection with the development,
creation or production of canned or custom software or the license of
custom software
Computer Services – Website Exception
• Exception: Services rendered in connection with
the creation, development, hosting or
maintenance of all or part of a website are not
taxable.
• Odd because it involves programming, code
writing and graphic design.
Partial Exemptions for Manufacturers,
Fabricators and Processors
• Partial exemption for machinery and equipment used in
manufacturing, fabricating and processing. Conn. Gen. Stat.
§12-412i.
• Partial exemption for materials, tools and fuels used in
manufacturing, fabricating and processing. Conn. Gen. Stat.
§12-412i.
Partial Exemptions for Manufacturers,
Fabricators and Processors
• These exemptions typically apply instead of the
“full exemption” when machinery, equipment,
tools or fuel are not purchased by a
manufacturer or are not used directly in the
manufacturing process
• The 50% exemption applies to purchases by
• Manufacturers, fabricators and processors
Partial Exemptions for Manufacturers,
Fabricators and Processors
• Partial Exemption for Component, Enhancement,
Replacement or Repair Parts
• The partial exemption is provided for by including items under
the definition of machinery, which is defined as:
• the basic machine itself, including all of its component parts and
contrivances such as belts, pulleys, shafts, moving parts,
operating structures and all equipment or devices used or
required to control, regulate or operate the machinery, including
without limitation, computers and data processing equipment,
together with all replacement and repair parts therefore,
whether purchased separately or in conjunction with a complete
machine, and regardless of whether the machine or component
parts thereof are assembled by the taxpayer or another party.
Partial Exemptions for Manufacturers,
Fabricators and Processors
• There is also a partial exemption for materials,
tools and fuels:
• used in a process preparatory or related to the
manufacturing, processing or fabricating of
tangible personal property to be sold, and
• used or consumed in the manufacturing,
processing or fabricating of tangible personal
property to be sold.
Partial Exemptions for Manufacturers,
Fabricators and Processors
• All software, whether canned, custom or customized, that is
purchased in the same transaction with the machine on which
the software is used, or as component parts to be assembled
into or onto a new machine, may qualify for a partial
exemption. Canned, or prewritten, software purchased in the
same or a separate transaction from the purchase of
machinery is treated as the purchase of a component or
enhancement part.
Adjustment to the Tax Base
• Business management and consulting services are
subject to tax
• However are not taxable when performed by a professional
service provider, such as a lawyer, accountant, doctor or engineer,
as long as the services are performed in the provider’s
professional capacity and are commonly associated with the
profession.
• Service on a board of directors is exempt.
Adjustment to the Tax Base
• Separately stated payroll overhead expenses (salaries,
fringe benefits, and state and federal taxes incident to
employment) are not included in gross receipts from the
sale of management services that are subject to the
payment of sales tax.
• Limitations:
• The employee must provide services for only one service recipient;
and
• Only at that service recipient’s property.
• Renaissance Management Company, Inc. v. Commissioner of
Revenue Services 267 Conn. 188 (2003).
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Exemptions
Statutory Exemptions
• All sales of tangible personal property are taxable
unless otherwise specifically exempt or excluded.
• Exclusions are generally set forth in §§ 12-407 and
12-408.
• Exemptions are generally set forth in Conn. Gen.
Stat. § 12-412.
• Some exemptions require that the taxpayer obtain and
retain a certificate establishing its entitlement to the
exemption.
• Statutory exemptions are strictly construed against
the taxpayer
Common Exemptions
• Common exemptions include:
• Sales to the government
• Sales to public utilities
• Certain sales to tax-exempt organizations;
• Sales of items considered beneficial or
necessary
• Sales in interstate commerce and
• Sales to “favored industries”
• The “other” category.
Exemptions – Government Related
• Sales that are prohibited from being taxed by the United States
Constitution or federal laws.
• Sales to the United States, the State of Connecticut or any of its
political subdivisions or agencies.
• Sales of United States and Connecticut flags.
• Sales to any tourism district.
• Sales of municipal publications, tangible personal property sold by
public libraries, book sales by library support groups, and the sale of
any property at auction by a municipality.
Exemptions – Government Related
cont’d
• Sales to develop property which the State of Connecticut is under
contract to purchase through a long-term financing contract.
• Sales to be incorporated into, used, or otherwise consumed in the
construction of Adriaen’s Landing, the convention center, the
Connecticut Center for Science and Exploration, the stadium facility
and related parking facilities.
• Sales to be incorporated into, used or otherwise consumed in the
operation of any project of the Connecticut Resources Recovery
Authority, whether such purchases are made directly by the
authority or are reimbursed by the authority to the lessee or
operator or such project.
Exemptions – Utility Related
• Sale to a water company for use in maintaining, operating, managing
or controlling a body of water, distributing plant or system supplying
water to fifty or more consumers.
• Sales related to the operation of facilities for the treatment of
wastewater that is certified as approved for the reduction, control or
elimination of pollution of the waters of the state by the
Commissioner of Environmental Protection.
• Sales related to the operation of facilities that reduce, control or
eliminate air pollution, if certified as approved for such purpose by
the Commission of Environmental Protection.
• “Call before you dig” services.
• Gas and electricity for residential use or used directly in
manufacturing or agricultural production.
Exemptions – Utility Related cont’d
• Sales of electricity that are not otherwise exempt up to one
hundred fifty dollars each month.
• Sales of water, steam and telegraph delivered to consumers
through mains, lines, pipes or bottles.
• The sale, furnishing or service of gas, water, steam or
electricity for use directly in the furnishing of gas, water,
steam or electricity delivered to consumers through mains,
lines or pipes.
• The sale of fuel for heating purposes in any home,
manufacturing plant, or agricultural production.
• Sales and use of ice storage systems used for cooling,
including equipment related to such systems, and sales of
services relating to the installation of such systems by a utility
ratepayer who is billed by such utility on a time-of-service
metering basis.
Exemptions – Charity and Welfare
Related
• Sales to organizations that the United States Treasury Department
has expressly determined, by letter, to be an organization that is
exempt from federal income tax because it is described in §
501(c)(3) or (13) of the Internal Revenue Code of 1986, as amended.
Sales of tangible personal property by nonprofit organizations at
bazaars, fairs, picnics, tag sales or similar events to the extent of five
such events of a day's duration held during any calendar year.
• Sales of tangible personal property by historical societies.
• Sales to and by nonprofit charitable hospitals, nursing homes, rest
homes and residential care homes, and sales of tangible personal
property on the premises of a hospital by an organization recognized
as exempt under § 501(c)(3) of the Internal Revenue Code.
• Food sold in educational institutes, hospitals, residential care
homes, assisted living facilities, senior centers, day care centers,
convalescent homes, nursing homes and rest home.
Exemptions – Charity and Welfare
Related cont’d
• Sales of items for not more than twenty dollars each by a PTO, for
purposes of youth activities, or accredited elementary or secondary
schools, for purposes of such school or its students.
• Sales related to the operation of low and moderate income housing,
if constructed under the sponsorship of and owned or operated by
nonprofit housing organizations and housing authorities.
• Sales related to the development, construction, rehabilitation,
renovation or repair of housing facilities for low and moderate
income families and persons if situated in qualified census tracts or
difficult development areas, as designated by the Secretary of the
United Stated Department of Housing and Urban Development, and
assisted by an allocation of Low Income Housing Tax Credits.
• Sales to any center of service for elderly persons.
Exemptions – Charity and Welfare
Related cont’d
• Sales of items for not more than $100 each by any nursing home, or
similar home, provided (1) such sales are made through a gift shop
located in such home or center and (2) any profits from such sales
are retained by such home or center for the benefit of the patients.
• Certain services that are rendered at the residence of a disabled
person.
• Sales of items purchased with food stamps.
• Sales of tangible personal property and services to The University of
Connecticut Educational Properties, Incorporated, with regard to
Connecticut Technology Park.
• Sales of services by an affiliate participating in the Community
Economic Development Fund to an affiliate participating in said
program.
• Sales of items that are eligible for benefits and that are made to an
eligible beneficiary of federal programs.
Exemptions – Safety Items
• Sales of and the storage, use or other consumption of safety
apparel.
• Bicycle Helmets.
• Sales of child car seats and booster seats for use in motor
vehicles are exempt. This includes the sale of additional bases
to be used in second cars. However, this exemption does not
cover travel systems that combine child car seats and strollers
that are priced as a single unit.
• Firearm (gun) safety devices (safes, lock boxes, trigger and
barrel locks).
Exemptions – Educational Materials
• Sales of college textbooks to full-time and part-time students
enrolled at institutions of higher education, including private
occupations schools, are exempt, with presentation of valid
student identification cards. College textbooks means new or
used books and workbooks required or recommended for
courses.
Exemptions – “Green” Items
• Compact fluorescent light bulbs.
• Residential weatherization products.
• Sales to, and the storage, use or other consumption by, a fuel cell
manufacturing facility in this state of materials, tools, fuel,
machinery and equipment used in such facility.
• Sales and use of solar energy electricity generating systems and
passive or active solar water or space heating systems and
geothermal resource systems, including equipment related to such
systems, and sales of services relating to the installation of such
systems.
• Sales of and the storage, use or other consumption of machinery,
equipment, tools, materials, supplies and fuel used directly in the
renewable energy and clean energy technology industries.
Exemptions – Food Sold at Retail
• Grocery items are exempt.
• Food products sold through coin-operated vending machines,
meals delivered to the elderly, disabled or homebound, and
purchases made with food stamps are exempt from tax.
• Vegetable seeds suitable for planting to produce food for
human consumption.
• Milk bottles and certain other nonreturnable containers and
returnable dairy product containers.
Exemptions – Media Services
• Internet access services.
• Sales of equipment to a telecommunications company or
community antenna television company that is used to provide
telecommunications, high-speed data transmission or broad-band
Internet services which offer the capability to transmit information
at a rate that is not less than two hundred kilobits per second in at
least one direction, such as fiber optics network equipment.
• Magazines and newspapers sold by subscription.
• Certain motion picture, video, television and radio production and
broadcast equipment.
• The leasing or rental of any motion picture film by the owner or
operator of a motion picture theater for purposes of display at such
theater.
Exemptions – Medical Related
• Sales of prescription medicines, syringes and needles.
• Artificial devices individually designed, constructed or altered for the
use of a particular handicapped person and repair or replacement parts
and repair services to these devices.
• Artificial limbs, artificial eyes, and other equipment worn as correction
or substitute for a functioning part of the body and repair to these
devices.
• Closed circuit television equipment for the visually impaired, and repair
or replacement parts and repair services to these devices.
• Medical support hose.
• Custom-made wigs or hairpieces for persons with medically diagnosed
total and permanent hair loss from disease or the treatment of disease
and repair or replacement parts and repair services to these devices.
• Diabetic supplies and repair or replacement parts for such equipment.
• Disposable pads used for incontinency.
• Hearing aids when designed to be worn on the person of the owner or
user and repair or replacement parts and repair services to these
devices.
Exemptions – Medical Related cont’d
• Canes, crutches, walkers, wheel chairs and inclined stairway chairlifts for
use of invalids and handicapped persons, and repair or replacement
parts and repair services to these devices.
• Prescription eyewear and nonprescription reading glasses and related
repair.
• Oxygen, blood or blood plasma for medical use in humans or animals.
• Telephone equipment designed exclusively for deaf or blind persons.
• Vital life support equipment, including oxygen supply equipment used
for humans or animals, kidney dialysis machines, and any other such
device used in necessary support of vital life functions, and related
repair.
• Sales of services used to determine the probable consequences in
relation to human health of the consumption or other use of any
product, substance or element.
• Sales of and the storage, use or other consumption of machinery,
equipment, tools and materials used exclusively in the fabrication of
optical lenses.
Exemptions – Transportation and Fuel
• Flyable aircraft sold by a manufacturer of aircraft located in this state to
certificated or licensed carriers engaged in interstate or foreign
commerce or to nonresidents for use exclusively outside Connecticut.
Conn. Gen. Stat. §12-412(20)
• Aircraft having a maximum certificated takeoff weight of 6,000 pounds
or more. Conn. Gen. Stat. §12-412(99).
• Repair or replacement parts and repair services for use in aircraft or in
the significant overhauling or rebuilding of aircraft or aircraft parts or
components on a factory basis. Conn. Gen. Stat. 12-412(76) and (77).
• Motor vehicles or water vessels purchased but not registered in this
state by persons who are nonresidents and do not maintain a
permanent place of abode in Connecticut. Conn. Gen. Stat. §12412(60); CERT-125.
• Motor vehicles sold to limited liability companies or their members in
connection with the organization or termination of the limited liability
company, provided the last taxable sale was subject to tax. Conn. Gen.
Stat. §12-431(a).
Exemptions – Transportation and Fuel
cont’d
• Commercial trucks, truck tractors, tractors, semitrailers, and vehicles
used in combination with commercial trucks, truck tractors, tractors,
semitrailers that have a gross vehicle weight rating in excess of
26,000 pounds; or are operated actively and exclusively during the
one-year period beginning on the date of purchase for the carriage
of interstate freight under a certificate or permit issued by the
Interstate Commerce Commission or its successor agency.
• Equipment installed in motor vehicles for persons with physical
disabilities repair or replacement parts for such equipment, whether
such repair or replacement parts are purchased separately or in
conjunction with such equipment, and whether such parts continue
the original function or enhance the functionality of such
equipment.
• Commercial fishing vessels and machinery or equipment for use on
the vessels.
• Repair and maintenance services to vessels.
• Fabrication labor to existing vessels.
Exemptions – Transportation and Fuel
cont’d
• Sales of marine vessel brokerage services provided by marine vessel
brokers selling such vessels for the owners.
• Sales of and the storage, use or other consumption of railroad
locomotives, track ballasts, ties, rails, machinery and equipment
used to maintain the railroad right-of-way which is used or operated
exclusively for the carriage of freight.
• Property tax payments under motor vehicle leases (if separately
stated on the bill to the lessee from the lessor).
• Motor vehicle fuel that is subject to the Motor Carrier Road Tax.
• Sales of any motor vehicle driving service to the extent of that
proportionate part of gross receipts from such service rendered
which is directly related to actual driving performance outside the
state.
Exemptions – Transportation and Fuel
cont’d
• Sales of and the storage, use or other consumption of any aviation
fuel used exclusively for aviation purposes or exclusively and directly
in the experimental testing of any product.
• Materials, tools, fuel, machinery and equipment in an aircraft
manufacturing facility.
• Sales and the storage, use or other consumption of bunker fuel oil,
intermediate fuel, marine diesel oil and marine gas oil for use in any
vessel having a displacement exceeding four thousand dead weight
tons or for use in any vessel primarily engaged in interstate
commerce.
• Sales of commercial motor vehicles and motor buses where seventyfive per cent of days-in-service revenue derives from trips involving
other states.
• Sales of, and the storage, use or other consumption of, diesel fuel to
be used exclusively in portable power system generators that are
larger than one hundred fifty kilowatts.
Exemptions – Business Related
• Professional, insurance or personal service transactions.
• Sales of and storage or use of any materials that become an
ingredient or component part of tangible personal property to be
sold or which are used directly in the fishing industry or in an
industrial plant in the actual fabrication of the finished product to be
sold.
• Sales and storage of any commodity in the form traded on any
contract market or other board of trade as defined in the
Commodity Exchange Act, as amended, except if the purchaser uses
such commodities.
• Sales of any printed material which has been manufactured in
Connecticut to the special order of a purchaser and which, within
thirty days following delivery to such purchaser, is to be delivered for
use outside Connecticut.
• Sales of and the storage, use or other consumption of machinery
used directly in a manufacturing production process.
Exemptions – Business Related cont’d
• Sales of any replacement parts for machinery to any business entity
located in any enterprise zone for use within such zone.
• Services related to personnel, management or research when
company rendering service and recipient are participating in a joint
venture for purposes of research and new product development.
• Services rendered between parent companies and wholly-owned
subsidiaries.
• Items sold for use in agricultural production by a farmer engaged in
such production as a business.
• Computer-related cleaning equipment.
• Molds, dies, patterns and handling equipment for metal casting
foundries.
• Molds, dies and patterns for pattern shops and metal casting
foundries.
• Machinery, equipment, tools, materials and supplies used in
commercial printing.
Exemptions – Business Related cont’d
• Machinery, equipment, tools, materials and supplies for typesetting,
color separation, finished copy, or similar products.
• Component parts for assembly of manufacturing machinery.
• Certain sales of computer and data processing services.
• Commercial photographic film and paper processing materials.
• Machinery, equipment, tools, materials, supplies and fuel used in
the biotechnology industry.
• Sales, use or other consumption of calibration services for
machinery, equipment or instrumentation used in a manufacturing
production process, and other sales, use or other consumption of
services or compliance practices associated with registration and
compliance of quality management and quality assurance standards
as part of standards created by the International Organization of
Standards.
Exemptions – Other
• Personal property used in burial or cremation with value
up to $2,500 for any single funeral.
• Caskets for burial.
• Gold or silver bullion, foreign currency, rare or antique
coins.
• Shoe repair services.
Exemptions – Newly Revoked
• Effective July 1, 2011, the following items are
taxable:
• Clothing and footwear under $50.
• Cloth or fabric for noncommercial sewing.
• Non-prescription medicines.
• Smoking cessation products.
Special Rules for Exempt Organizations
• Connecticut law provides for an exemption from Connecticut
sales and use taxes for qualifying nonprofit organizations.
• An organization that has a valid Determination Letter from the
Internal Revenue Service stating that it is exempt under
Section 501(c)(3) or (13) of the Internal Revenue Code is a
”qualifying organization” for the purposes of the exemption
from sales and use taxes.
• Guidance does not cover other tax-exempt organizations that are
exempt from federal and state income taxes.
• The DRS does not issue exemption permits.
• The single-member limited liability company issue.
Special Rule for Exempt Organizations –
cont’d
• Purchases by exempt organizations:
• A “qualifying organization” may purchase supplies, services and
equipment without paying Connecticut sales and use taxes if the
purchases are made by the organization, are purchased
exclusively for the purposes for which the organization was
established, and are paid for with organization funds.
• Purchases that are made for the administrative needs of the
organization can qualify for exemption.
• Purchases that are entirely unrelated to furthering the charitable
mission do not qualify for exemption.
Special Rules for Exempt Organization –
cont’d
• Purchases by exempt organizations
• To claim exemption for the purchase of goods or taxable services,
the organization must complete CERT-119, Certificate for
Purchases of Tangible Personal Property and Services by
Qualifying Exempt Organizations and give it to the retailer.
• The organization must attach to the CERT-119 a copy its federal
Determination Letter or group Determination Letter issued by the
Internal Revenue Service.
Special Rules for Exempt Organizations
– cont’d
• Sales by exempt organizations:
• A nonprofit organization may make sales at up to 5 fundraising
events (bazaar, fair, tag sale, gala, etc.) each year without
collecting, or registering, for sales tax.
• Not required to collect sales tax on sales made at each of its 5
fundraising events
• Nonprofit organizations that make other sales of goods or
services are required to register with the Department of Revenue
Services, obtain a Sales and Use Tax Permit and collect sales tax
on non-exempt sales.
Special Rules for Exempt Organizations
– cont’d
• Meals
• If the organization is purchasing meals for which it will charge
those attending an event, then CERT-119 can be completed in
order to claim the exemption if the event is one of the
organization’s exempt 5 one-day events.
• If the organization is purchasing meals for which it will not be
reimbursed, the exemption must be approved with CERT-112,
Certificate for Exempt Qualifying Purchases of Meals or Lodging
by an Exempt Organization or Qualifying Governmental Agency,
to Department of Revenue Services at least three weeks prior to
the event.
• Meals purchased by a nonprofit hospital or nursing home are
subject to different rules, and they must file CERT-113.
Sales Tax Exemption Certificates
• When Connecticut statutes or regulations require evidence of
exemption, the buyer must generally provide the vendor with an
exemption certificate prior to consummation of the sale. ( Reg. Sec.
12-426-16a(i).
• Seller can accept in good faith that the statements made by the
purchaser are true and accurate.
• A purchaser who gives a false or fraudulent exemption certificate
may also be subject to civil and criminal penalties. [ Informational
Publication 2006(11)].
NOTE: Arkin-Medo put the burden of proving that a certificate was
accepted in bad faith on revenue officials.
Sales Tax Exemption Certificates – cont’d
• Connecticut does not have any provisions for
electronic exemption certificates.
• Connecticut has no provisions regarding
requirements for direct payment permit holders
to file exemption certificates.
• The Streamlined Sales Tax Governing Board has
approved a uniform exemption certificate.
Connecticut may, but is not required to, accept
the certificate.
Sales Tax Exemption Certificates – cont’d
• CERT-100 - Materials, Tools and Fuel Certificate
• CERT-101 - Machinery, Component Parts and
Replacement and Repair Parts of Machinery
Used Directly in a Manufacturing Process
• CERT-103 - Residential Condominium Association
Certificate
• CERT-104 - Services Certificate for New
Construction
• CERT-108 - Certificate of Partial Exemption
Materials, Tools and Fuels
Sales Tax Exemption Certificates – cont’d
• CERT-109 - Certificate of Partial Exemption of
Machinery, Equipment, or Repair and
Replacement Parts
• CERT-119 - Certificate for Purchases of Tangible
Personal Property and Services by Qualifying
Exempt Organizations
• CERT-136 - Purchases of Items by Eleemosynary
Organizations and Schools That Will be Resold
Tax-Exempt
Is There Such a Thing As A Sales Tax
Credit?
• This is a trick question.
• Any sales tax paid to another state is a
credit against the use tax due to
Connecticut
• This can be relevant to contractors that
purchase materials out of state but use or
consume those materials in Connecticut
Connecticut Innovations Sales Tax
Incentive Programs
• Sales Tax Incremental Financing (TIF)
• TIF, authorized by CSG sec 32-285, is a financing tool used to
provide state assistance to an economically significant project by
giving a grant to the project’s developer. The TIF grant is funded
by the sale of state general revenue bonds in an amount of up to
30 percent of the new, incremental sales tax revenue generated
by the project.
• Notable Connecticut projects that have benefited from the
program include Lake Compounce in Bristol, the Oakdale Theater
in Wallingford, Dodd Stadium in Norwich, The Meadows in
Hartford and Cabela’s in East Hartford.
• Sales & Use Tax Relief Program
• Connecticut Innovations can grant a project-specific sales tax
exemption in a specific amount.

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