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Ezel / Tax Rulings / CT
CT Ruling 89-127 Sales and Use Taxes 1989-09-28

When were equipment-service labor and preventive maintenance contracts taxable under Connecticut Ruling 89-127?

Short answer: Labor after a 90-day free-service period was taxable. Preventive maintenance contracts commencing January 1, 1989 were nontaxable, but contracts entered into on or after July 1, 1989 were taxable. DRS says PS 94(2) superseded the ruling.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
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 an official 1989 Connecticut Department of Revenue Services Ruling reflecting the equipment-maintenance sales-and-use-tax rules and transition dates then in effect. DRS expressly marks the information 'not current' and says Policy Statement (PS) 94(2) superseded it. The results depend on the end of the 90-day free-service period and the dates stated for preventive maintenance contracts. 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 current treatment.
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Note -- superseded historical guidance. DRS marks this information "not current" and states that Policy Statement (PS) 94(2) superseded the ruling.

Plain-English summary

Labor charges for equipment service performed after a 90-day free-service period ended were taxable.

Gross receipts from preventive maintenance contracts commencing January 1, 1989 were nontaxable. Preventive maintenance contracts to service equipment that were entered into on or after July 1, 1989 were subject to sales and use tax.

What this means for you

The historical ruling applied different results based on the free-service period and the contract dates stated in the ruling. PS 94(2) later superseded the guidance.

Common questions

Was labor taxable during the 90-day free-service period? The ruling addresses only labor after that period ended and says the later labor was taxable.

Were contracts commencing January 1, 1989 taxable? No.

What contracts were taxable? Preventive maintenance contracts entered into on or after July 1, 1989.

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(DD), as cited in the ruling.
  • 1989 Connecticut Public Act 89-251, as cited in the ruling.
  • Policy Statement (PS) 94(2) -- identified by DRS as superseding the ruling.

Source

Original ruling text

Ruling 89-127, Maintenance

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

This Ruling has been superseded by PS 94(2)

Labor charges for services performed to the equipment after the ninety-day free service period has lapsed are taxable pursuant to section 12-407(2)(i)(DD) of the Connecticut General Statutes, as amended by Public Act No. 89-251.

The gross receipts for preventive maintenance contracts that commence on January 1, 1989 are not taxable. However, preventive maintenance contracts to service equipment that are entered into on or after July 1, 1989 are subject to sales and use tax pursuant to section 12-407(2)(i)(DD) of the Connecticut General Statutes, as amended by Public Act No. 89-251.

TIMOTHY F. BANNON

COMMISSIONER

September 28, 1989

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