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Ezel / Tax Rulings / CT
CT Ruling 89-142 Sales and Use Taxes 1989-10-12

When were labor charges for installing, repairing, or replacing water systems taxable under Connecticut Ruling 89-142?

Short answer: Installation labor was nontaxable for new construction and qualifying owner-occupied one-to-three-family residential property, but taxable for existing commercial or income-producing property. Repair or replacement labor was taxable for residential and commercial real estate. DRS says IP 99(19) and AN 2000(8) obsoleted 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 sales-and-use-tax treatment of water-system labor then in effect. DRS expressly marks the information 'not current' and says Informational Publication (IP) 99(19) and Announcement (AN) 2000(8) obsoleted it. The historical distinctions depend on whether the work was installation or repair and on the property's construction and use. 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 -- obsolete historical guidance. DRS marks this information "not current" and states that Informational Publication (IP) 99(19) and Announcement (AN) 2000(8) obsoleted the ruling.

Plain-English summary

Labor to install wells, water heaters, water conditioners, water coolers, and other water systems was nontaxable when performed for new construction or existing one-, two-, or three-family property that was exclusively residential and owner-occupied.

Installation labor was taxable when performed on existing commercial, industrial, or income-producing property. The ruling treated that work as renovation.

Labor to replace or repair part of a water system was taxable for both residential and commercial real estate.

What this means for you

The historical ruling separated installation from repair or replacement work and then classified installation by the kind and use of the property. IP 99(19) and AN 2000(8) later obsoleted the guidance.

Common questions

Was installation labor taxable for new construction? No under this historical ruling.

What existing residential property qualified for nontaxable installation labor? One-, two-, or three-family property that was exclusively residential and owner-occupied.

Was installation labor taxable on existing commercial or income-producing property? Yes.

Were water-system repair and replacement labor taxable? Yes for residential and commercial real estate.

Citations and references

  • Informational Publication (IP) 99(19) and Announcement (AN) 2000(8) -- identified by DRS as obsoleting this ruling.

Source

Original ruling text

Ruling 89-142, Repairs / Water Systems

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

This Ruling has been obsoleted by IP 99(19)   and AN 2000(8)

Labor charges for the installation of water systems, such as wells, water heaters, water conditioners and water coolers are not taxable when the services are rendered to new construction or existing one, two or three family exclusively residential, owner-occupied real property. Labor charges for the installation of water systems provided to existing commercial, industrial or income-producing real property are subject to sales and use tax.

The installation of water systems performed on existing commercial, industrial or income-producing property would be an example of a renovation.

Labor charges for the replacement or repair to part of a water system rendered to residential real estate and/or commercial real estate are subject to sales and use tax.

LEGAL DIVISION

October 12, 1989

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