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Ezel / Tax Rulings / CT
CT Ruling 90-77 Sales and Use Taxes 1990-12-20

Is a crane or trucking contract a taxable equipment rental when the company supplies the operator and controls how and when the equipment is used?

Short answer: No. Customers hired the company to complete specific transportation or rigging jobs, not to use its equipment. The company always supplied the truck driver or crane operator and retained complete control and discretion over when, how, and whether the equipment was used. Under Conn. Agencies Regs. § 12-426-25(d), the contract was for services rather than a lease of tangible personal property.

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This page answers the general question as of 1990. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1990
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 Ruling of the Connecticut Department of Revenue Services (DRS), typically issued to a specific taxpayer in response to that taxpayer's request and based on the specific facts presented and the Connecticut tax law in effect when it was issued. DRS may later declare a Ruling obsolete or supersede it by a subsequent Ruling, Policy Statement, or Announcement, so a taxpayer with different facts should not assume it still applies. Taxpayer-identifying details are redacted. Connecticut imposes its 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 your specific situation.
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.
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Plain-English summary

A company performed crane, rigging, hauling, and trucking jobs. It always supplied the driver or equipment operator, contracted to accomplish a specific job, and retained control over when, how, and whether the equipment was used.

DRS classified the arrangement as a service contract, not a lease of tangible personal property. Conn. Agencies Regs. § 12-426-25(d) treats operator-supplied equipment as a service when the owner keeps complete control and discretion over performance.

What this means for you

The practical control test matters more than the presence of expensive equipment. A bare rental where the customer controls the machine would present different facts.

Common questions

Who controlled the crane or truck? The service company, through its operator.

What did the customer buy? Completion of a specific transportation or rigging job, not possession or use of the equipment.

Citations and references

  • Conn. Agencies Regs. § 12-426-25(d).

Source

Original ruling text

Ruling 90-77, Crane and Rigging Services

Ruling 90-77

Crane and Rigging Services

FACTS:

Company is in the business of providing services such as crane work, "rigging" services, hauling services and trucking services. Company always furnishes a truck and driver for its transportation services and an operator with the crane or other equipment which it uses. Company retains control over all of the equipment as to when, how, and if it is to be used. Its customers contract for performance of specific jobs such as transportation or rigging of specific items as opposed to the use of Company's equipment.

ISSUE:

Whether, under the facts stated above, Company is performing a contract for services or is engaged in the rental of equipment.

RULING:

Company's contract is for the performance of services because it contracts to do a specific job and maintains control over how, when and if the equipment is used. Section 12-426-25 of the Regulation of Connecticut State Agencies provides rules for determining whether a contract will be one for services or a lease of tangible personal property. Section 12-426-25(d) states,

...[Where an operator is supplied with the equipment, the contract is entered into for a specific job or operation, and where the owner of the equipment through the operator retains complete control over the equipment and retains discretion as to when and how to perform, said contract will be one for services and not for lease.

LEGAL DIVISION

December 20, 1990

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