Are rented uniforms and 'lab coats' costing less than $50 exempt from Connecticut sales tax, or are they taxable 'protective' clothing?

Plain-English summary

A uniform-rental company rented garments to Connecticut businesses — employee uniforms, coveralls, counter coats, blazers, smocks, and items it called "lab coats." These weren't specially treated (no flame or acid resistance, no special protective materials); they were ordinary cotton or cotton-blend garments that mostly identify the wearer as an employee or protect the wearer's street clothes from soil and stain. Each item rented for less than $50. The company asked whether the garments — especially the "lab coats" — qualified for Connecticut's exemption for clothing costing less than fifty dollars (Conn. Gen. Stat. § 12-412(47)).

DRS said yes, they're exempt — and used the "lab coat" question to draw a careful line:

• The under-$50 clothing exemption covers rentals. Section 12-412(47) exempts articles of clothing costing less than $50, and because leasing/rental is itself a "sale" (§ 12-407(2)(j)), the exemption applies to rented clothing just as to purchased clothing, item by item.
• But it excludes "special clothing … primarily designed for … protective use." The regulation (Conn. Agencies Regs. § 12-426-30(e)(2)) gives examples of non-exempt protective items — goggles, lab coats, potholders, protective aprons, rubber gloves, safety glasses — while listing exempt items like kitchen aprons, painter pants, and employee uniforms.
• "Protective use" means protection from bodily harm, not from dirt. Since some exempt items (aprons, painter pants) obviously protect clothing from soil, DRS reasoned that the excluded "protective" category must mean something more — protection of the body from harm (burns, chemical/biological contamination, particles in the eyes). It applied the interpretive maxim noscitur a sociis ("known from its associates"): "lab coats" sits in a list with goggles and rubber gloves, so the lab coats the regulation excludes are those designed to protect the body from injury — not lab coats worn as uniforms.
• Result — it depends on the lab coat's purpose. Lab coats that function as employee uniforms or ordinary clothing, made of ordinary fabric with no special protective construction, are exempt if they cost under $50. Lab coats specially designed to protect the wearer from bodily harm are treated differently: they don't fit the under-$50 clothing exemption, but they are exempt as "safety apparel" under Conn. Gen. Stat. § 12-412(91) — an exemption created effective July 1, 1997 — regardless of cost.

So the same name ("lab coat") can land in two different exemption buckets depending on what the garment is actually for.

What this means for you

Uniform-rental companies and clothing retailers

Don't tax an item just because it's called a "lab coat" or "protective." What controls is function and design: an ordinary garment worn as a uniform (or to keep street clothes clean) that costs under $50 is exempt clothing; a garment engineered to shield the body from injury is exempt as safety apparel at any price. The taxable middle — "special clothing primarily designed for protective use" costing $50+ that isn't true safety apparel — is narrow. Classify by purpose and construction, and keep documentation of what a garment is designed to do.

Employers renting uniforms or protective gear

Ordinary uniforms and smocks generally ride the clothing exemption (subject to the price rule in effect), while genuine personal protective equipment worn on the job can qualify as tax-exempt safety apparel. Because the general under-$50 clothing exemption has changed over the years and this Ruling is amplified by PS 2000(6), confirm the current threshold and rules before assuming an item is exempt today.

Accountants and tax professionals

This is a clean example of statutory/regulatory construction against a taxpayer-favorable exemption. Key moves: rentals are "sales" (§ 12-407(2)(j)); the § 12-412(47) exemption excludes clothing "primarily designed for … protective use," and DRS reads "protective" via noscitur a sociis to mean bodily protection, citing State v. Roque, 190 Conn. 143 (1983). The interplay with the § 12-412(91) safety-apparel exemption means an item excluded from one exemption may qualify for the other. Note the ordinary rule that ambiguity in an exemption is resolved against the taxpayer (United Illuminating Co. v. Groppo; Texaco Refining & Marketing Co. v. Commissioner), tempered here by the regulation's express listing of "employee uniforms" as exempt.

Common questions

Q: Are rented uniforms and lab coats taxable in Connecticut?
A: Under this Ruling, ordinary uniforms and lab coats worn as uniforms that cost less than $50 each are exempt articles of clothing under § 12-412(47) — and the exemption applies to rentals as well as sales.

Q: Why aren't these lab coats "protective clothing" that's excluded from the exemption?
A: Because DRS read "protective use" to mean protection from bodily harm (like goggles or rubber gloves), not protection of clothing from soil or stain. Lab coats serving as uniforms don't fall in the excluded protective category.

Q: What about a lab coat that really does protect from injury?
A: A lab coat specially designed to protect the wearer from bodily harm is exempt as "safety apparel" under Conn. Gen. Stat. § 12-412(91), regardless of its cost — even though it wouldn't qualify under the under-$50 clothing exemption.

Q: Is the "under $50" clothing exemption still the rule?
A: Connecticut's clothing exemption has changed over time, and DRS notes this Ruling is amplified by PS 2000(6). Confirm the current exemption threshold and rules before relying on this 2000 guidance.

Citations and references

Statutes:

• Conn. Gen. Stat. § 12-412(47) (exemption for clothing/footwear costing less than $50; exclusion for clothing designed for athletic or protective use)
• Conn. Gen. Stat. § 12-407(2)(j) (leasing or rental is a taxable "sale")
• Conn. Gen. Stat. § 12-412(91) (exemption for "safety apparel," regardless of cost; effective July 1, 1997)

Regulations, cases and guidance:

• Conn. Agencies Regs. § 12-426-30 (describing exempt vs. protective clothing; subdivision (e)(2))
• State v. Roque, 190 Conn. 143 (1983) (noscitur a sociis); United Illuminating Co. v. Groppo, 220 Conn. 749 (1992); Texaco Refining & Marketing Co. v. Commissioner, 202 Conn. 583 (1987) (exemptions construed against the taxpayer)
• PS 2000(6) (amplifies this Ruling)

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 2000-1

Original ruling text

Ruling 2000-1, Sales and Use Taxes / Clothing Costing Less Than Fifty Dollars / Safety Apparel

Ruling 2000-1

Sales and Use Taxes

Clothing Costing Less Than Fifty Dollars

Safety Apparel

This Ruling is amplified by  PS 2000(6 )

FACTS:

A company doing business in Connecticut (the "Company") rents garments to businesses. Most of these garments are employee uniforms or similar items worn by the employees of the Company’s customers. Some of the garments, such as coveralls, are worn in place of street clothes. Other garments, such as counter coats, blazers, smocks and items called "lab coats," are worn over the employees’ clothing. A "lab coat" rented by the Company is a style of garment, varying in length, that is similar to a smock or jacket, and may be worn in a variety of work settings. The garments the Company rents, including the "lab coats," primarily serve to identify employees as such or to protect the wearer or the wearer’s clothing from soil or stain.

The Company does not rent any garments that are specially treated to be flame or acid resistant or that contain special protective materials. Most of the garments are made from untreated cotton or cotton/synthetic blends. They are not designed to protect the wearer from bodily harm or injury.

The Company usually provides a supply of garments to its customers at regular intervals of one or two weeks. After the garments are used, the Company picks up the garments and launders them. The rental charge associated with each item of clothing is less than fifty dollars.

ISSUE:

Whether the garments the Company rents, including the items called "lab coats," are exempt from sales and use taxes under Conn. Gen. Stat. §12-412(47) and Conn. Agencies Regs. §12-426-30 as articles of clothing costing less than fifty dollars each.

RULING:

The garments the Company rents, including the items called "lab coats," are exempt from sales and use taxes under Conn. Gen. Stat. §12-412(47) and Conn. Agencies Regs. §12-426-30 as articles of clothing costing less than fifty dollars each. The lab coats the Company rents are employee uniforms or ordinary clothing. They may protect the wearer or the wearer’s clothing from soil or stain, but they are not "protective" clothing within the meaning of the regulation. If the lab coats were designed to protect the employees from bodily harm or injury rather than to function as employee uniforms or ordinary clothing, they would be exempt as safety apparel under Conn. Gen. Stat. §12-412(91), regardless of their cost.

DISCUSSION:

Under Conn. Gen. Stat. §12-412(47), sales of articles of clothing or footwear costing less than fifty dollars are exempt from sales and use taxes. Conn. Gen. Stat. §12-407(2)(j) defines "sale" to include "the leasing or rental of tangible personal property of any kind whatsoever. . . ." Section 12-412(47) applies to the rental, as well as to the outright sale, of clothing, as long as the cost of each item being rented or sold is less than fifty dollars.

However, there are some exclusions from the exemption. Conn. Gen. Stat. §12-412(47) states that "articles of clothing or footwear shall not include (A) any special clothing or footwear primarily designed for athletic activity or protective use. . . ." Conn. Agencies Regs. §12-426-30 further describes and defines the terms used in the statute. Subdivision (e)(2) of the regulation states that exempt articles of clothing "do not include clothing designed for protective use (and not normally worn other than for such protective use) such as goggles, lab coats, potholders, protective aprons, rubber gloves, and safety glasses." However, the same subdivision later states that exempt articles of clothing "do include . . . kitchen aprons . . . painter pants [and] employee uniforms. . . ."

It is apparent from the list of exempt items in the regulation that employee uniforms, aprons and other items intended to be worn over or instead of street clothing are within the ambit of the exemption. But it is also clear that certain "special" items designed for "protective use" are not exempt under this statute. Since some of the exempt items serve to protect clothing or the body from soil, stain, grease and paint, the term "protective use" as it occurs in the exclusion from the exemption must have a more technical meaning.

Evidently, the "protective use" referred to in the regulation, and associated with all the items listed as examples of clothing "designed for protective use"—goggles, lab coats, potholders, protective aprons, rubber gloves and safety glasses—means protection of more than clothing, and protection from more than dirt. Instead, it means protection from bodily harm, such as from burns, chemical or biological contamination, or particles flying into the eyes. This inference is strengthened by the fact that, effective July 1, 1997, the General Assembly created a separate exemption, Conn. Gen. Stat. §12-412(91), for "safety apparel," including "any item of clothing or protective equipment worn by an employee for protection during the course of the employee’s employment." It is not the purpose of this ruling to further define "safety apparel" for purposes of §12-412(91); however, it is reasonable to conclude that most of the items excluded from §12-412(47) and listed in Conn. Agencies Regs. §12-426-30(e)(2) as "designed for protective use" now qualify as "safety apparel" if they are worn during the course of an employee’s employment.

The question of how to classify items of clothing called "lab coats" remains. What happens when a lab coat functions as an employee uniform, or otherwise serves only to protect the wearer or the wearer’s clothing from soil or stain? On the one hand, Conn. Agencies Regs. §12-426-30(e)(2) appears to exclude lab coats from the scope of Conn. Gen. Stat. §12-412(47) altogether. On the other hand, the regulation lists "employee uniforms" as exempt clothing.

As a rule, when an exemption from tax is involved, any ambiguity in a word or phrase must be resolved against the taxpayer and in favor of the taxing authority. See United Illuminating Co. v. Groppo , 220 Conn. 749, 752-53, 601 A.2d 1005 (1992). This principle applies equally to regulations, which, when ratified by the General Assembly, are presumed to be "consistent with the general statutory scheme that the regulation was designed to implement." Texaco Refining & Marketing Co. v. Commissioner , 202 Conn. 583, 600, 522 A.2d 771 (1987). The term "lab coat" is ambiguous, in that it can apply to more than one type of garment. However, simply to resolve this ambiguity by ruling that all lab coats, regardless of their purpose, are protective clothing and therefore are excluded from the exemption does not seem to comport with the legislative intent embodied in the statute and the regulation, particularly where, as in this case, a company markets items called "lab coats" as employee uniforms, which the regulation specifically lists as exempt.

The answer may be found by examining the context in which the term "lab coats" appears in Conn. Agencies Regs. §12-426-30(e)(2).

Assistance in ascertaining the legislative intent is afforded by resort to the familiar maxim of noscitur a sociis. Through the use of this aid the meaning of a word or a particular set of words in a statute may be indicated, controlled or made clear by the words with which it is associated. . . . [Citations and internal quotation marks omitted.]

State v. Roque , 190 Conn. 143, 152, 460 A.2d 26 (1983). ( Noscitur a sociis is a Latin phrase meaning "it is known from its associates." Black’s Law Dictionary 956 (5 th ed. 1979).) In the regulation, "lab coats" are listed together with goggles, potholders, protective aprons, rubber gloves and safety glasses. The lab coats excluded by the regulation are, like the other items in this list, designed to protect the human body from harm or injury, not merely to identify the wearer as an employee or to cover or protect the wearer’s clothing.

We conclude that lab coats specially designed to protect the wearer from bodily harm or injury are properly excluded from exemption under Conn. Gen. Stat. §12-412(47), whereas lab coats that function as employee uniforms or ordinary clothing, that are not made of protective fabrics and have no special protective construction or purpose, are exempt if they are sold or rented for less than fifty dollars each. Lab coats that protect the wearer from bodily harm or injury are exempt as "safety apparel" under Conn. Gen. Stat. §12-412(91), even though they are not exempt under §12-412(47).

LEGAL DIVISION

January 27, 2000