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General Assembly Substitute Bill No. 7177
January Session, 2019
AN ACT CONCERNING SH ORT-TERM RENTAL PROPERTI ES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2019) For the purposes of this 1
section and sections 2 to 4, inclusive, of this act: 2
(1) "Applicant" means a person who files an application with the 3
commissioner pursuant to section 2 of this act; 4
(2) "Commissioner" means the Commissioner of Consumer 5
Protection; 6
(3) "Dwelling unit" has the same meaning as provided in section 7
47a-1 of the general statutes; 8
(4) "Guest" means an individual, other than the owner, lessee, lessor, 9
sublessee or sublessor of a short-term rental property, who occupies a 10
short-term rental property pursuant to a short-term rental transaction; 11
(5) "Short-term rental operator" means the owner, lessee or 12
sublessee of a short-term rental property who offers the short-term 13
rental property for occupancy by a guest pursuant to a short-term 14
rental transaction; 15
(6) "Short-term rental platform" means any platform, including, but 16 Substitute Bill No. 7177
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not limited to, an Internet web site, that (A) allows a short-term rental 17
operator to offer a dwelling unit, or any portion thereof, for occupancy 18
as a short-term rental property, (B) allows a potential guest to arrange 19
payment for occupancy of a short-term rental property, whether such 20
guest pays directly to a short-term rental operator or through the 21
platform, and (C) allows the platform operator to derive revenues from 22
providing or maintaining the services described in this subdivision for 23
a short-term rental property; 24
(7) "Short-term rental property" means a dwelling unit, or any 25
portion thereof, in this state that is (A) the subject of a short-term rental 26
transaction, and (B) not a hotel, lodging house or bed and breakfast 27
establishment; and 28
(8) "Short-term rental transaction" means a transaction in which a 29
short-term rental operator offers a short-term rental property for 30
occupancy by a guest through a short-term rental platform for a period 31
of thirty consecutive calendar days or less. 32
Sec. 2. (NEW) (Effective July 1, 2019) (a) (1) Each short-term rental 33
operator or prospective short-term rental operator shall apply for a 34
license from the commissioner for each dwelling unit that such person 35
intends to operate as a short-term rental property on or after January 1, 36
2020. Each application for a license, or renewal of a license, pursuant to 37
this subsection shall be made on a form prescribed by the 38
commissioner. The commissioner shall require, as a precondition to 39
issuing or renewing a license pursuant to this subsection, that the 40
applicant submit to the commissioner, in a form and manner 41
prescribed by the commissioner, proof that the applicant: 42
(A) Maintains a property and casualty insurance policy that 43
contains the minimum provisions prescribed by the Insurance 44
Commissioner pursuant to section 5 of this act; 45
(B) Provided all notices required by section 3 of this act; and 46
(C) In the case of an application for renewal of a license under this 47 Substitute Bill No. 7177
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subsection: 48
(i) Maintained the insurance coverage described in subparagraph 49
(A) of this subdivision during the two years immediately preceding; 50
(ii) Paid any and all sales and use taxes due and payable to this 51
state, and any and all taxes due and payable to a municipality 52
pursuant to section 6 of this act, during the two years immediately 53
preceding; 54
(iii) Provided all notices required by section 3 of this act; and 55
(iv) Complied with the provisions of any ordinance enacted 56
pursuant to section 7 of this act during the two years immediately 57
preceding. 58
(2) Each license issued by the commissioner pursuant to this 59
subsection shall expire two years after its issuance. The commissioner 60
may refuse to issue or renew, or may suspend or revoke, any license 61
required by this section if the applicant for such license or renewal 62
engages in any conduct prohibited by this section. 63
(3) Not later than fifteen days after the commissioner issues or 64
renews a license pursuant to this subsection, the commissioner shall 65
send a notice, in a form and manner prescribed by the commissioner, 66
to the Commissioner of Revenue Services disclosing: 67
(A) The name of the applicant for such license or renewal; and 68
(B) The address of the licensed short-term rental property. 69
(b) If the commissioner refuses to issue or renew, or suspends or 70
revokes, a license pursuant to subsection (a) of this section, the 71
commissioner shall notify the applicant or short-term rental operator, 72
as applicable, of such decision, the grounds for such decision and of 73
such applicant's or short-term rental operator's right to request a 74
hearing not later than ten days after the date on which the 75 Substitute Bill No. 7177
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commissioner issued such notice to such applicant. If the applicant or 76
short-term rental operator requests a hearing within such ten-day 77
period, the commissioner shall conduct a hearing concerning such 78
refusal, suspension or revocation in accordance with the provisions of 79
chapter 54 of the general statutes concerning contested cases. The 80
applicant or short-term rental operator may appeal therefrom in 81
accordance with the provisions of section 4-183 of the general statutes. 82
(c) The Attorney General, at the request of the commissioner, is 83
authorized to apply in the name of this state to the Superior Court for 84
an order temporarily or permanently restraining and enjoining any 85
short-term rental operator from operating in violation of any provision 86
of sections 1 to 4, inclusive, of this act. 87
Sec. 3. (NEW) (Effective July 1, 2019) Not later than the day that an 88
applicant files an application with the commissioner pursuant to 89
section 2 of this act, the applicant shall send a notice, in a form and 90
manner prescribed by the commissioner, to the owner, lessor or 91
sublessor of the dwelling unit or short-term rental property that is the 92
subject of such application, and all owners, lessors, lessees, sublessors 93
and sublessees of abutting and adjacent dwelling units, disclosing: 94
(1) The name of such applicant; 95
(2) The address of such dwelling unit or short-term rental property; 96
and 97
(3) That such applicant has filed, or intends to file, such application. 98
Sec. 4. (NEW) (Effective July 1, 2019) The commissioner may adopt 99
regulations, in accordance with the provisions of chapter 54 of the 100
general statutes, to implement the provisions of sections 1 to 3, 101
inclusive, of this act. 102
Sec. 5. (NEW) (Effective July 1, 2019) The Insurance Commissioner 103
shall adopt regulations, in accordance with the provisions of chapter 104
54 of the general statutes, prescribing the minimum provisions to be 105 Substitute Bill No. 7177
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included in each property and casualty policy issued on or after the 106
effective date of such regulations covering a short-term rental 107
property, as defined in section 1 of this act. Such policy shall include 108
liability coverage of not less than one million dollars against claims for 109
bodily injury or death and property damage. 110
Sec. 6. (NEW) (Effective July 1, 2019) Any municipality may, by vote 111
of its legislative body or, in a municipality where the legislative body 112
is a town meeting, by vote of the board of selectmen, levy a tax on each 113
short-term rental operator operating one or more short-term rental 114
properties, as both terms are defined in section 1 of this act, within 115
such municipality, provided such tax shall not exceed an amount that 116
is equal to six per cent of such short-term rental operator's income 117
from all short-term rental transactions, as defined in section 1 of this 118
act, concerning such short-term rental properties during the tax year 119
for which such tax is levied. 120
Sec. 7. (NEW) (Effective July 1, 2019) Any municipality may, by vote 121
of its legislative body or, in a municipality where the legislative body 122
is a town meeting, by vote of the board of selectmen, limit the number 123
of days that guests may occupy a short-term rental property during a 124
calendar year. For the purposes of this section, "guest" and "short-term 125
rental property" have the same meaning as provided in section 1 of 126
this act. 127
Sec. 8. Section 12-407 of the general statutes is repealed and the 128
following is substituted in lieu thereof (Effective July 1, 2019, and 129
applicable to sales occurring on or after July 1, 2019): 130
(a) Whenever used in this chapter: 131
(1) "Person" means and includes any individual, firm, 132
copartnership, joint venture, association, association of persons 133
however formed, social club, fraternal organization, corporation, 134
limited liability company, foreign municipal electric utility as defined 135
in section 12-59, estate, trust, fiduciary, receiver, trustee, syndicate, the 136 Substitute Bill No. 7177
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United States, this state or any political subdivision thereof or any 137
group or combination acting as a unit, and any other individual or 138
officer acting under the authority of any court in this state. 139
(2) "Sale" and "selling" mean and include: 140
(A) Any transfer of title, exchange or barter, conditional or 141
otherwise, in any manner or by any means whatsoever, of tangible 142
personal property for a consideration; 143
(B) Any withdrawal, except a withdrawal pursuant to a transaction 144
in foreign or interstate commerce, of tangible personal property from 145
the place where it is located for delivery to a point in this state for the 146
purpose of the transfer of title, exchange or barter, conditional or 147
otherwise, in any manner or by any means whatsoever, of the property 148
for a consideration; 149
(C) The producing, fabricating, processing, printing or imprinting of 150
tangible personal property for a consideration for consumers who 151
furnish either directly or indirectly the materials used in the 152
producing, fabricating, processing, printing or imprinting, including, 153
but not limited to, sign construction, photofinishing, duplicating and 154
photocopying; 155
(D) The furnishing and distributing of tangible personal property 156
for a consideration by social clubs and fraternal organizations to their 157
members or others; 158
(E) The furnishing, preparing, or serving for a consideration of food, 159
meals or drinks; 160
(F) A transaction whereby the possession of property is transferred 161
but the seller retains the title as security for the payment of the price; 162
(G) A transfer for a consideration of the title of tangible personal 163
property which has been produced, fabricated or printed to the special 164
order of the customer, or of any publication, including, but not limited 165 Substitute Bill No. 7177
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to, sign construction, photofinishing, duplicating and photocopying; 166
(H) A transfer for a consideration of the occupancy of any room or 167
rooms in a hotel, lodging house, [or] bed and breakfast establishment 168
or short-term rental property for a period of thirty consecutive 169
calendar days or less; 170
(I) The rendering of certain services, as defined in subdivision (37) 171
of this subsection, for a consideration, exclusive of such services 172
rendered by an employee for the employer; 173
(J) The leasing or rental of tangible personal property of any kind 174
whatsoever, including, but not limited to, motor vehicles, linen or 175
towels, machinery or apparatus, office equipment and data processing 176
equipment, provided for purposes of this subdivision and the 177
application of sales and use tax to contracts of lease or rental of 178
tangible personal property, the leasing or rental of any motion picture 179
film by the owner or operator of a motion picture theater for purposes 180
of display at such theater shall not constitute a sale within the meaning 181
of this subsection; 182
(K) The rendering of telecommunications service, as defined in 183
subdivision (26) of this subsection, for a consideration on or after 184
January 1, 1990, exclusive of any such service rendered by an employee 185
for the employer of such employee, subject to the provisions related to 186
telecommunications service in accordance with section 12-407a; 187
(L) (i) The rendering of community antenna television service, as 188
defined in subdivision (27) of this subsection, for a consideration on or 189
after January 1, 1990, exclusive of any such service rendered by an 190
employee for the employer of such employee. For purposes of this 191
chapter, "community antenna television service" includes service 192
provided by a holder of a certificate of cable franchise authority 193
pursuant to section 16-331p, and service provided by a community 194
antenna television company issued a certificate of video franchise 195
authority pursuant to section 16-331e for any service area in which it 196 Substitute Bill No. 7177
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was not certified to provide community antenna television service 197
pursuant to section 16-331 on or before October 1, 2007; 198
(ii) The rendering of certified competitive video service, as defined 199
in subdivision (38) of this subsection, for consideration on or after 200
October 1, 2007, exclusive of any such service rendered by an 201
employee for the employer of such employee; 202
(M) The transfer for consideration of space or the right to use any 203
space for the purpose of storage or mooring of any noncommercial 204
vessel, exclusive of dry or wet storage or mooring of such vessel 205
during the period commencing on the first day of October in any year 206
to and including the thirty-first day of May of the next succeeding 207
year; 208
(N) The sale for consideration of naming rights to any place of 209
amusement, entertainment or recreation within the meaning of 210
subdivision (3) of section 12-540; 211
(O) The transfer for consideration of a prepaid telephone calling 212
service, as defined in subdivision (34) of this subsection, and the 213
recharge of a prepaid telephone calling service, provided, if the sale or 214
recharge of a prepaid telephone calling service does not take place at 215
the retailer's place of business and an item is shipped by the retailer to 216
the customer, the sale or recharge shall be deemed to take place at the 217
customer's shipping address, but, if such sale or recharge does not take 218
place at the retailer's place of business and no item is shipped by the 219
retailer to the customer, the sale or recharge shall be deemed to take 220
place at the customer's billing address or the location associated with 221
the customer's mobile telephone number; and 222
(P) The furnishing by any person, for a consideration, of space for 223
storage of tangible personal property when such person is engaged in 224
the business of furnishing such space, but "sale" and "selling" do not 225
mean or include the furnishing of space which is used by a person for 226
residential purposes. As used in this subparagraph, "space for storage" 227 Substitute Bill No. 7177
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means secure areas, such as rooms, units, compartments or containers, 228
whether accessible from outside or from within a building, that are 229
designated for the use of a customer, where the customer can store and 230
retrieve property, including self-storage units, mini-storage units and 231
areas by any other name to which the customer has either unlimited 232
free access or free access within reasonable business hours or upon 233
reasonable notice to the service provider to add or remove property, 234
but does not mean the rental of an entire building, such as a 235
warehouse. For purposes of this subparagraph, furnishing space for 236
storage shall not include general warehousing and storage, where the 237
warehouse typically handles, stores and retrieves a customer's 238
property using the warehouse's staff and equipment and does not 239
allow the customer free access to the storage space and shall not 240
include accepting specific items of property for storage, such as 241
clothing at a dry cleaning establishment or golf bags at a golf club. 242
(3) (A) "Retail sale" or "sale at retail" means and includes a sale for 243
any purpose other than resale in the regular course of business of 244
tangible personal property or a transfer for a consideration of the 245
occupancy of any room or rooms in a hotel, lodging house, [or] bed 246
and breakfast establishment or short-term rental property for a period 247
of thirty consecutive calendar days or less, or the rendering of any 248
service described in subdivision (2) of this subsection. The delivery in 249
this state of tangible personal property by an owner or former owner 250
thereof or by a factor, if the delivery is to a consumer pursuant to a 251
retail sale made by a retailer not engaged in business in this state, is a 252
retail sale in this state by the person making the delivery. Such person 253
shall include the retail selling price of the property in such person's 254
gross receipts. 255
(B) "Retail sale" or "sale at retail" does not include any sale of any 256
tangible personal property, where, no later than one hundred twenty 257
days after the original sale, the original purchaser sells or becomes 258
contractually obligated to sell such property to a retailer who is 259
contractually obligated to lease such property back to such original 260 Substitute Bill No. 7177
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purchaser in a lease that is taxable under this chapter or the sale of 261
such property by the original purchaser to the retailer who is 262
contractually obligated to lease such property back to such original 263
purchaser in a lease that is taxable under this chapter. If the original 264
purchaser has paid sales or use tax on the original sale of such 265
property to the original purchaser, such original purchaser may (i) 266
claim a refund of such tax under the provisions of section 12-425, upon 267
presentation of proof satisfactory to the commissioner that the mutual 268
contractual obligations described in this subparagraph were 269
undertaken no later than one hundred twenty days after the original 270
sale and that such tax was paid to the original retailer on the original 271
sale and was remitted to the commissioner by such original retailer or 272
by such original purchaser, or (ii) issue at the time of such original sale 273
or no later than one hundred twenty days thereafter a certificate, in the 274
form prescribed by the commissioner, to the original retailer certifying 275
that the mutual contractual obligations described in this subparagraph 276
have been undertaken. If such certificate is issued to the original 277
retailer at the time of the original sale, no tax on the original sale shall 278
be collected by the original retailer from the original purchaser. If the 279
certificate is issued after the time of the original sale but no later than 280
one hundred twenty days thereafter, the original retailer shall refund 281
to the original purchaser the tax collected on the original sale and, if 282
the original retailer has previously remitted the tax to the 283
commissioner, the original retailer may either treat the amount so 284
refunded as a credit against the tax due on the return next filed under 285
this chapter, or claim a refund under section 12-425. If such certificate 286
is issued no later than one hundred twenty days after the time of the 287
original sale but the tangible personal property originally purchased is 288
not, in fact, subsequently leased by the original purchaser, such 289
original purchaser shall be liable for and be required to pay the tax due 290
on the original sale. 291
(4) "Storage" includes any keeping or retention in this state for any 292
purpose except sale in the regular course of business or subsequent use 293
solely outside this state of tangible personal property purchased from 294 Substitute Bill No. 7177
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a retailer. 295
(5) "Use" includes the exercise of any right or power over tangible 296
personal property incident to the ownership of that property, except 297
that it does not include the sale of that property in the regular course 298
of business. 299
(6) "Storage" and "use" do not include (A) keeping, retaining or 300
exercising any right or power over tangible personal property shipped 301
or brought into this state for the purpose of subsequently transporting 302
it outside the state for use thereafter solely outside the state, or for the 303
purpose of being processed, fabricated or manufactured into, attached 304
to or incorporated into, other tangible personal property to be 305
transported outside the state and thereafter used solely outside the 306
state, or (B) keeping, retaining or exercising any right or power over 307
tangible personal property acquired by the customer of a commercial 308
printer while such property is located at the premises of the 309
commercial printer in this state pursuant to a contract with such 310
printer for printing and distribution of printed material if the 311
commercial printer could have acquired such property without 312
application of tax under this chapter. 313
(7) "Purchase" and "purchasing" means and includes: (A) Any 314
transfer, exchange or barter, conditional or otherwise, in any manner 315
or by any means whatsoever, of tangible personal property or of the 316
occupancy of any room or rooms in a hotel, lodging house, [or] bed 317
and breakfast establishment or short-term rental property for a period 318
of thirty consecutive calendar days or less for a consideration; (B) a 319
transaction whereby the possession of property is transferred but the 320
seller retains the title as security for the payment of the price; (C) a 321
transfer for a consideration of tangible personal property which has 322
been produced, fabricated or printed to the special order of the 323
customer, or of any publication; (D) when performed outside this state 324
or when the customer gives a resale certificate pursuant to section 12-325
410, the producing, fabricating, processing, printing or imprinting of 326
tangible personal property for a consideration for consumers who 327 Substitute Bill No. 7177
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furnish either directly or indirectly the materials used in the 328
producing, fabricating, processing, printing or imprinting; (E) the 329
acceptance or receipt of any service described in any of the 330
subparagraphs of subdivision (2) of this subsection; (F) any leasing or 331
rental of tangible personal property. Wherever in this chapter 332
reference is made to the purchase or purchasing of tangible personal 333
property, it shall be construed to include purchases as described in this 334
subsection. 335
(8) (A) "Sales price" means the total amount for which tangible 336
personal property is sold by a retailer, the total amount of rent for 337
which occupancy of a room is transferred by an operator, the total 338
amount for which any service described in subdivision (2) of this 339
subsection is rendered by a retailer or the total amount of payment or 340
periodic payments for which tangible personal property is leased by a 341
retailer, valued in money, whether paid in money or otherwise, which 342
amount is due and owing to the retailer or operator and, subject to the 343
provisions of subdivision (1) of section 12-408, as amended by this act, 344
whether or not actually received by the retailer or operator, without 345
any deduction on account of any of the following: (i) The cost of the 346
property sold; (ii) the cost of materials used, labor or service cost, 347
interest charged, losses or any other expenses; (iii) for any sale 348
occurring on or after July 1, 1993, any charges by the retailer to the 349
purchaser for shipping or delivery, notwithstanding whether such 350
charges are separately stated in a written contract, or on a bill or 351
invoice rendered to such purchaser or whether such shipping or 352
delivery is provided by the retailer or a third party. The provisions of 353
subparagraph (A) (iii) of this subdivision shall not apply to any item 354
exempt from taxation pursuant to section 12-412. Such total amount 355
includes any services that are a part of the sale; except as otherwise 356
provided in subparagraph (B)(v) or (B)(vi) of this subdivision, any 357
amount for which credit is given to the purchaser by the retailer, and 358
all compensation and all employment-related expenses, whether or not 359
separately stated, paid to or on behalf of employees of a retailer of any 360
service described in subdivision (2) of this subsection. 361 Substitute Bill No. 7177
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(B) "Sales price" does not include any of the following: (i) Cash 362
discounts allowed and taken on sales; (ii) any portion of the amount 363
charged for property returned by purchasers, which upon rescission of 364
the contract of sale is refunded either in cash or credit, provided the 365
property is returned within ninety days from the date of purchase; (iii) 366
the amount of any tax, not including any manufacturers' or importers' 367
excise tax, imposed by the United States upon or with respect to retail 368
sales whether imposed upon the retailer or the purchaser; (iv) the 369
amount charged for labor rendered in installing or applying the 370
property sold, provided such charge is separately stated and exclusive 371
of such charge for any service rendered within the purview of 372
subparagraph (I) of subdivision (37) of this subsection; (v) unless the 373
provisions of subdivision (4) of section 12-430 or of section 12-430a are 374
applicable, any amount for which credit is given to the purchaser by 375
the retailer, provided such credit is given solely for property of the 376
same kind accepted in part payment by the retailer and intended by 377
the retailer to be resold; (vi) the full face value of any coupon used by a 378
purchaser to reduce the price paid to a retailer for an item of tangible 379
personal property, whether or not the retailer will be reimbursed for 380
such coupon, in whole or in part, by the manufacturer of the item of 381
tangible personal property or by a third party; (vii) the amount 382
charged for separately stated compensation, fringe benefits, workers' 383
compensation and payroll taxes or assessments paid to or on behalf of 384
employees of a retailer who has contracted to manage a service 385
recipient's property or business premises and renders management 386
services described in subparagraph (I) or (J) of subdivision (37) of this 387
subsection, provided, the employees perform such services solely for 388
the service recipient at its property or business premises and "sales 389
price" shall include the separately stated compensation, fringe benefits, 390
workers' compensation and payroll taxes or assessments paid to or on 391
behalf of any employee of the retailer who is an officer, director or 392
owner of more than five per cent of the outstanding capital stock of the 393
retailer. Determination whether an employee performs services solely 394
for a service recipient at its property or business premises for purposes 395
of this subdivision shall be made by reference to such employee's 396 Substitute Bill No. 7177
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activities during the time period beginning on the later of the 397
commencement of the management contract, the date of the 398
employee's first employment by the retailer or the date which is six 399
months immediately preceding the date of such determination; (viii) 400
the amount charged for separately stated compensation, fringe 401
benefits, workers' compensation and payroll taxes or assessments paid 402
to or on behalf of (I) a leased employee, or (II) a worksite employee by 403
a professional employer organization pursuant to a professional 404
employer agreement. For purposes of this subparagraph, an employee 405
shall be treated as a leased employee if the employee is provided to the 406
client at the commencement of an agreement with an employee leasing 407
organization under which at least seventy-five per cent of the 408
employees provided to the client at the commencement of such initial 409
agreement qualify as leased employees pursuant to Section 414(n) of 410
the Internal Revenue Code of 1986, or any subsequent corresponding 411
internal revenue code of the United States, as from time to time 412
amended, or the employee is added to the client's workforce by the 413
employee leasing organization subsequent to the commencement of 414
such initial agreement and qualifies as a leased employee pursuant to 415
Section 414(n) of said Internal Revenue Code of 1986 without regard to 416
subparagraph (B) of paragraph (2) thereof. A leased employee, or a 417
worksite employee subject to a professional employer agreement, shall 418
not include any employee who is hired by a temporary help service 419
and assigned to support or supplement the workforce of a temporary 420
help service's client; (ix) any amount received by a retailer from a 421
purchaser as the battery deposit that is required to be paid under 422
subsection (a) of section 22a-245h; the refund value of a beverage 423
container that is required to be paid under subsection (a) of section 424
22a-244; or a deposit that is required by law to be paid by the 425
purchaser to the retailer and that is required by law to be refunded to 426
the purchaser by the retailer when the same or similar tangible 427
personal property is delivered as required by law to the retailer by the 428
purchaser, if such amount is separately stated on the bill or invoice 429
rendered by the retailer to the purchaser; and (x) the amount charged 430
for separately stated compensation, fringe benefits, workers' 431 Substitute Bill No. 7177
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compensation and payroll taxes or assessments paid to a media payroll 432
services company, as defined in this subsection. 433
(9) (A) "Gross receipts" means the total amount of the sales price 434
from retail sales of tangible personal property by a retailer, the total 435
amount of the rent from transfers of occupancy of rooms by an 436
operator, the total amount of the sales price from retail sales of any 437
service described in subdivision (2) of this subsection by a retailer of 438
services, or the total amount of payment or periodic payments from 439
leases or rentals of tangible personal property by a retailer, valued in 440
money, whether received in money or otherwise, which amount is due 441
and owing to the retailer or operator and, subject to the provisions of 442
subdivision (1) of section 12-408, as amended by this act, whether or 443
not actually received by the retailer or operator, without any deduction 444
on account of any of the following: (i) The cost of the property sold; 445
however, in accordance with such regulations as the Commissioner of 446
Revenue Services may prescribe, a deduction may be taken if the 447
retailer has purchased property for some other purpose than resale, 448
has reimbursed the retailer's vendor for tax which the vendor is 449
required to pay to the state or has paid the use tax with respect to the 450
property, and has resold the property prior to making any use of the 451
property other than retention, demonstration or display while holding 452
it for sale in the regular course of business. If such a deduction is taken 453
by the retailer, no refund or credit will be allowed to the retailer's 454
vendor with respect to the sale of the property; (ii) the cost of the 455
materials used, labor or service cost, interest paid, losses or any other 456
expense; (iii) for any sale occurring on or after July 1, 1993, except for 457
any item exempt from taxation pursuant to section 12-412, any charges 458
by the retailer to the purchaser for shipping or delivery, 459
notwithstanding whether such charges are separately stated in the 460
written contract, or on a bill or invoice rendered to such purchaser or 461
whether such shipping or delivery is provided by the retailer or a third 462
party. The total amount of the sales price includes any services that are 463
a part of the sale; all receipts, cash, credits and property of any kind; 464
except as otherwise provided in subparagraph (B)(v) or (B)(vi) of this 465 Substitute Bill No. 7177
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subdivision, any amount for which credit is allowed by the retailer to 466
the purchaser; and all compensation and all employment-related 467
expenses, whether or not separately stated, paid to or on behalf of 468
employees of a retailer of any service described in subdivision (2) of 469
this subsection. 470
(B) "Gross receipts" do not include any of the following: (i) Cash 471
discounts allowed and taken on sales; (ii) any portion of the sales price 472
of property returned by purchasers, which upon rescission of the 473
contract of sale is refunded either in cash or credit, provided the 474
property is returned within ninety days from the date of sale; (iii) the 475
amount of any tax, not including any manufacturers' or importers' 476
excise tax, imposed by the United States upon or with respect to retail 477
sales whether imposed upon the retailer or the purchaser; (iv) the 478
amount charged for labor rendered in installing or applying the 479
property sold, provided such charge is separately stated and exclusive 480
of such charge for any service rendered within the purview of 481
subparagraph (I) of subdivision (37) of this subsection; (v) unless the 482
provisions of subdivision (4) of section 12-430 or of section 12-430a are 483
applicable, any amount for which credit is given to the purchaser by 484
the retailer, provided such credit is given solely for property of the 485
same kind accepted in part payment by the retailer and intended by 486
the retailer to be resold; (vi) the full face value of any coupon used by a 487
purchaser to reduce the price paid to the retailer for an item of tangible 488
personal property, whether or not the retailer will be reimbursed for 489
such coupon, in whole or in part, by the manufacturer of the item of 490
tangible personal property or by a third party; (vii) the amount 491
charged for separately stated compensation, fringe benefits, workers' 492
compensation and payroll taxes or assessments paid to or on behalf of 493
employees of a retailer who has contracted to manage a service 494
recipient's property or business premises and renders management 495
services described in subparagraph (I) or (J) of subdivision (37) of this 496
subsection, provided the employees perform such services solely for 497
the service recipient at its property or business premises and "gross 498
receipts" shall include the separately stated compensation, fringe 499 Substitute Bill No. 7177
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benefits, workers' compensation and payroll taxes or assessments paid 500
to or on behalf of any employee of the retailer who is an officer, 501
director or owner of more than five per cent of the outstanding capital 502
stock of the retailer. Determination whether an employee performs 503
services solely for a service recipient at its property or business 504
premises for purposes of this subdivision shall be made by reference to 505
such employee's activities during the time period beginning on the 506
later of the commencement of the management contract, the date of the 507
employee's first employment by the retailer or the date which is six 508
months immediately preceding the date of such determination; (viii) 509
the amount charged for separately stated compensation, fringe 510
benefits, workers' compensation and payroll taxes or assessments paid 511
to or on behalf of (I) a leased employee, or (II) a worksite employee by 512
a professional employer organization pursuant to a professional 513
employer agreement. For purposes of this subparagraph, an employee 514
shall be treated as a leased employee if the employee is provided to the 515
client at the commencement of an agreement with an employee leasing 516
organization under which at least seventy-five per cent of the 517
employees provided to the client at the commencement of such initial 518
agreement qualify as leased employees pursuant to Section 414(n) of 519
the Internal Revenue Code of 1986, or any subsequent corresponding 520
internal revenue code of the United States, as from time to time 521
amended, or the employee is added to the client's workforce by the 522
employee leasing organization subsequent to the commencement of 523
such initial agreement and qualifies as a leased employee pursuant to 524
Section 414(n) of said Internal Revenue Code of 1986 without regard to 525
subparagraph (B) of paragraph (2) thereof. A leased employee, or a 526
worksite employee subject to a professional employer agreement, shall 527
not include any employee who is hired by a temporary help service 528
and assigned to support or supplement the workforce of a temporary 529
help service's client; (ix) the amount received by a retailer from a 530
purchaser as the battery deposit that is required to be paid under 531
subsection (a) of section 22a-256h; the refund value of a beverage 532
container that is required to be paid under subsection (a) of section 533
22a-244 or a deposit that is required by law to be paid by the purchaser 534 Substitute Bill No. 7177
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to the retailer and that is required by law to be refunded to the 535
purchaser by the retailer when the same or similar tangible personal 536
property is delivered as required by law to the retailer by the 537
purchaser, if such amount is separately stated on the bill or invoice 538
rendered by the retailer to the purchaser; and (x) the amount charged 539
for separately stated compensation, fringe benefits, workers' 540
compensation and payroll taxes or assessments paid to a media payroll 541
services company, as defined in this subsection. 542
(10) "Business" includes any activity engaged in by any person or 543
caused to be engaged in by any person with the object of gain, benefit 544
or advantage, either direct or indirect. 545
(11) "Seller" includes every person engaged in the business of selling 546
tangible personal property or rendering any service described in any of 547
the subparagraphs of subdivision (2) of this subsection, the gross 548
receipts from the retail sale of which are required to be included in the 549
measure of the sales tax and every operator as defined in subdivision 550
(18) of this subsection. 551
(12) "Retailer" includes: 552
(A) Every person engaged in the business of making sales at retail or 553
in the business of making retail sales at auction of tangible personal 554
property owned by the person or others; 555
(B) Every person engaged in the business of making sales for 556
storage, use or other consumption or in the business of making sales at 557
auction of tangible personal property owned by the person or others 558
for storage, use or other consumption; 559
(C) Every operator, as defined in subdivision (18) of this subsection; 560
(D) Every seller rendering any service described in subdivision (2) 561
of this subsection; 562
(E) Every person under whom any salesman, representative, 563 Substitute Bill No. 7177
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peddler or canvasser operates in this state, or from whom such 564
salesman, representative, peddler or canvasser obtains the tangible 565
personal property that is sold; 566
(F) Every person with whose assistance any seller is enabled to 567
solicit orders within this state; 568
(G) Every person making retail sales from outside this state to a 569
destination within this state who engages in regular or systematic 570
solicitation of sales of tangible personal property in this state (i) by the 571
display of advertisements on billboards or other outdoor advertising in 572
this state, (ii) by the distribution of catalogs, periodicals, advertising 573
flyers or other advertising by means of print, radio or television media, 574
or (iii) by mail, telegraphy, telephone, computer data base, cable, optic, 575
microwave, Internet or other communication system, for the purpose 576
of effecting retail sales of tangible personal property, provided such 577
person has gross receipts of at least two hundred fifty thousand dollars 578
and made two hundred or more retail sales from outside this state to 579
destinations within this state during the twelve-month period ended 580
on the September thirtieth immediately preceding the monthly or 581
quarterly period with respect to which such person's liability for tax 582
under this chapter is determined; 583
(H) Any person owned or controlled, either directly or indirectly, by 584
a retailer engaged in business in this state which is the same as or 585
similar to the line of business in which such person so owned or 586
controlled is engaged; 587
(I) Any person owned or controlled, either directly or indirectly, by 588
the same interests that own or control, either directly or indirectly, a 589
retailer engaged in business in this state which is the same as or similar 590
to the line of business in which such person so owned or controlled is 591
engaged; 592
(J) Any assignee of a person engaged in the business of leasing 593
tangible personal property to others, where leased property of such 594 Substitute Bill No. 7177
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person which is subject to taxation under this chapter is situated 595
within this state and such assignee has a security interest, as defined in 596
subdivision (35) of subsection (b) of section 42a-1-201, in such 597
property; 598
(K) Every person making retail sales of items of tangible personal 599
property from outside this state to a destination within this state who 600
repairs or services such items, under a warranty, in this state, either 601
directly or indirectly through an agent, independent contractor or 602
subsidiary; 603
(L) Every person making sales of tangible personal property or 604
services through an agreement with another person located in this 605
state under which such person located in this state, for a commission 606
or other consideration that is based upon the sale of tangible personal 607
property or services by the retailer, directly or indirectly refers 608
potential customers, whether by a link on an Internet web site or 609
otherwise, to the retailer, provided the cumulative gross receipts from 610
sales by the retailer to customers in the state who are referred to the 611
retailer by all such persons with this type of an agreement with the 612
retailer, is in excess of two hundred fifty thousand dollars during the 613
preceding four quarterly periods ending on the last day of March, 614
June, September and December; and 615
(M) Any marketplace facilitator, as defined in section 12-408e. 616
(13) "Tangible personal property" means personal property which 617
may be seen, weighed, measured, felt or touched or which is in any 618
other manner perceptible to the senses including canned or prewritten 619
computer software. Tangible personal property includes the 620
distribution, generation or transmission of electricity. 621
(14) "In this state" or "in the state" means within the exterior limits of 622
the state of Connecticut and includes all territory within these limits 623
owned by or ceded to the United States of America. 624
(15) (A) "Engaged in business in the state" means and, to the extent 625 Substitute Bill No. 7177
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not prohibited by the Constitution of the United States, includes, but 626
shall not be limited to, the following acts or methods of transacting 627
business: (i) Selling in this state, or any activity in this state in 628
connection with selling in this state, tangible personal property for use, 629
storage or consumption within the state; (ii) engaging in the transfer 630
for a consideration of the occupancy of any room or rooms in a hotel, 631
lodging house, [or] bed and breakfast establishment or short-term 632
rental property for a period of thirty consecutive calendar days or less; 633
(iii) rendering in this state any service described in any of the 634
subparagraphs of subdivision (2) of this subsection; (iv) maintaining, 635
occupying or using, permanently or temporarily, directly or indirectly, 636
through a subsidiary or agent, by whatever name called, any office, 637
place of distribution, sales or sample room or place, warehouse or 638
storage point or other place of business or having any representative, 639
agent, salesman, canvasser or solicitor operating in this state for the 640
purpose of selling, delivering or taking orders; (v) notwithstanding the 641
fact that retail sales are made from outside this state to a destination 642
within this state, engaging in regular or systematic solicitation of sales 643
of tangible personal property in this state by the display of 644
advertisements on billboards or other outdoor advertising in this state, 645
by the distribution of catalogs, periodicals, advertising flyers or other 646
advertising by means of print, radio or television media, or by mail, 647
telegraphy, telephone, computer data base, cable, optic, microwave, 648
Internet or other communication system, for the purpose of effecting 649
retail sales of tangible personal property, provided at least two 650
hundred fifty thousand dollars of gross receipts are received and two 651
hundred or more retail sales from outside this state to destinations 652
within this state are made during the twelve-month period ended on 653
the September thirtieth immediately preceding the monthly or 654
quarterly period with respect to which liability for tax under this 655
chapter is determined; (vi) being owned or controlled, either directly 656
or indirectly, by a retailer engaged in business in this state which is the 657
same as or similar to the line of business in which the retailer so owned 658
or controlled is engaged; (vii) being owned or controlled, either 659
directly or indirectly, by the same interests that own or control, either 660 Substitute Bill No. 7177
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directly or indirectly, a retailer engaged in business in this state which 661
is the same as or similar to the line of business in which the retailer so 662
owned or controlled is engaged; (viii) being the assignee of a person 663
engaged in the business of leasing tangible personal property to others, 664
where leased property of such person is situated within this state and 665
such assignee has a security interest, as defined in subdivision (35) of 666
subsection (b) of section 42a-1-201, in such property; (ix) 667
notwithstanding the fact that retail sales of items of tangible personal 668
property are made from outside this state to a destination within this 669
state, repairing or servicing such items, under a warranty, in this state, 670
either directly or indirectly through an agent, independent contractor 671
or subsidiary; and (x) selling tangible personal property or services 672
through an agreement with a person located in this state, under which 673
such person located in this state, for a commission or other 674
consideration that is based upon the sale of tangible personal property 675
or services by the retailer, directly or indirectly refers potential 676
customers, whether by a link on an Internet web site or otherwise, to 677
the retailer, provided the cumulative gross receipts from sales by the 678
retailer to customers in the state who are referred to the retailer by all 679
such persons with this type of agreement with the retailer is in excess 680
of two hundred fifty thousand dollars during the four preceding four 681
quarterly periods ending on the last day of March, June, September 682
and December. 683
(B) A retailer who has contracted with a commercial printer for 684
printing and distribution of printed material shall not be deemed to be 685
engaged in business in this state because of the ownership or leasing 686
by the retailer of tangible or intangible personal property located at the 687
premises of the commercial printer in this state, the sale by the retailer 688
of property of any kind produced or processed at and shipped or 689
distributed from the premises of the commercial printer in this state, 690
the activities of the retailer's employees or agents at the premises of the 691
commercial printer in this state, which activities relate to quality 692
control, distribution or printing services performed by the printer, or 693
the activities of any kind performed by the commercial printer in this 694 Substitute Bill No. 7177
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state for or on behalf of the retailer. 695
(C) A retailer not otherwise engaged in business in the state who 696
purchases fulfillment services carried on in this state by a person other 697
than an affiliated person, or who owns tangible personal property 698
located on the premises of an unaffiliated person other than a 699
marketplace facilitator, as defined in section 12-408e, performing 700
fulfillment services for such retailer, shall not be deemed to be engaged 701
in business in this state. For purposes of this subparagraph, (i) persons 702
are affiliated persons with respect to each other where one of such 703
persons has an ownership interest of more than five per cent, whether 704
direct or indirect, in the other, or where an ownership interest of more 705
than five per cent, whether direct or indirect, is held in each of such 706
persons by another person or by a group of other persons who are 707
affiliated persons with respect to each other, and (ii) "fulfillment 708
services" means services that are performed by a person on its 709
premises on behalf of a purchaser of such services and that involve the 710
receipt of orders from the purchaser of such services or an agent 711
thereof, which orders are to be filled by the person from an inventory 712
of products that are offered for sale by the purchaser of such services, 713
and the shipment of such orders outside this state to customers of the 714
purchaser of such services. 715
(D) A retailer not otherwise engaged in business in this state that 716
participates in a trade show or shows at the convention center, as 717
defined in subdivision (3) of section 32-600, shall not be deemed to be 718
engaged in business in this state, regardless of whether the retailer has 719
employees or other staff present at such trade shows, provided the 720
retailer's activity at such trade shows is limited to displaying goods or 721
promoting services, no sales are made, any orders received are sent 722
outside this state for acceptance or rejection and are filled from outside 723
this state, and provided further that such participation is not more 724
than fourteen days, or part thereof, in the aggregate during the 725
retailer's income year for federal income tax purposes. 726
(16) "Hotel" means any building regularly used and kept open as 727 Substitute Bill No. 7177
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such for the feeding and lodging of guests where any person who 728
conducts himself properly and who is able and ready to pay for such 729
services is received if there are accommodations for such person and 730
which derives the major portion of its operating receipts from the 731
renting of rooms and the sale of food. "Hotel" includes any apartment 732
hotel wherein apartments are rented for fixed periods of time, 733
furnished or unfurnished, while the keeper of such hotel supplies food 734
to the occupants thereof, if required, but does not include a bed and 735
breakfast establishment or short-term rental property. 736
(17) "Lodging house" means any building or portion of a building, 737
other than a hotel, an apartment hotel, [or] a bed and breakfast 738
establishment or a short-term rental property, in which persons are 739
lodged for hire with or without meals, including, but not limited to, 740
any motel, motor court, motor inn, tourist court, furnished residence or 741
similar accommodation; provided the terms "hotel", "apartment hotel", 742
"lodging house", [and "bed and breakfast"] "bed and breakfast 743
establishment" and "short-term rental property" shall not be construed 744
to include: (A) Privately owned and operated convalescent homes, 745
residential care homes, homes for the infirm, indigent or chronically ill; 746
(B) religious or charitable homes for the aged, infirm, indigent or 747
chronically ill; (C) privately owned and operated summer camps for 748
children; (D) summer camps for children operated by religious or 749
charitable organizations; (E) lodging accommodations at educational 750
institutions; or (F) lodging accommodations at any facility operated by 751
and in the name of any nonprofit charitable organization, provided the 752
income from such lodging accommodations at such facility is not 753
subject to federal income tax. 754
(18) "Operator" means any person operating a hotel, lodging house, 755
[or] bed and breakfast establishment or short-term rental property in 756
the state, including, but not limited to, the owner or proprietor of such 757
premises, lessee, sublessee, mortgagee in possession, licensee or any 758
other person otherwise operating such hotel, lodging house, [or] bed 759
and breakfast establishment or short-term rental property. 760 Substitute Bill No. 7177
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(19) "Occupancy" means the use or possession, or the right to the 761
use or possession, of any room or rooms in a hotel, lodging house, [or] 762
bed and breakfast establishment or short-term rental property, or the 763
right to the use or possession of the furnishings or the services and 764
accommodations accompanying the use and possession of such room 765
or rooms, for the first period of not more than thirty consecutive 766
calendar days. 767
(20) "Room" means any room or rooms of any kind in any part or 768
portion of a hotel, lodging house, [or] bed and breakfast establishment 769
or short-term rental property let out for use or possession for lodging 770
purposes. 771
(21) "Rent" means the consideration received for occupancy and any 772
meals included with such occupancy, valued in money, whether 773
received in money or otherwise, including all receipts, cash, credits 774
and property or services of any kind or nature, and also any amount 775
for which credit is allowed by the operator to the occupant, without 776
any deduction therefrom whatsoever. 777
(22) "Certificated air carrier" means a person issued a certificate or 778
certificates by the Federal Aviation Administration pursuant to Title 779
14, Chapter I, Subchapter G, Part 121, 135, 139 or 141 of the Code of 780
Federal Regulations or the Civil Aeronautics Board pursuant to Title 781
14, Chapter II, Subchapter A, Parts 201 to 208, inclusive, and 298 of the 782
Code of Federal Regulations, as such regulations may hereafter be 783
amended or reclassified. 784
(23) "Aircraft" means aircraft, as the term is defined in section 15-34. 785
(24) "Vessel" means vessel, as the term is defined in section 15-127. 786
(25) "Licensed marine dealer" means a marine dealer, as the term is 787
defined in section 15-141, who has been issued a marine dealer's 788
certificate by the Commissioner of Energy and Environmental 789
Protection. 790 Substitute Bill No. 7177
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(26) (A) "Telecommunications service" means the electronic 791
transmission, conveyance or routing of voice, image, data, audio, video 792
or any other information or signals to a point or between or among 793
points. "Telecommunications service" includes such transmission, 794
conveyance or routing in which computer processing applications are 795
used to act on the form, code or protocol of the content for purposes of 796
transmission, conveyance or routing without regard to whether such 797
service is referred to as a voice over Internet protocol service or is 798
classified by the Federal Communications Commission as enhanced or 799
value added. "Telecommunications service" does not include (i) value-800
added nonvoice data services, (ii) radio and television audio and video 801
programming services, regardless of the medium, including the 802
furnishing of transmission, conveyance or routing of such services by 803
the programming service provider. Radio and television audio and 804
video programming services shall include, but not be limited to, cable 805
service as defined in 47 USC 522(6), audio and video programming 806
services delivered by commercial mobile radio service providers, as 807
defined in 47 CFR 20, and video programming service by certified 808
competitive video service providers, (iii) any telecommunications 809
service (I) rendered by a company in control of such service when 810
rendered for private use within its organization, or (II) used, allocated 811
or distributed by a company within its organization, including in such 812
organization affiliates, as defined in section 33-840, for the purpose of 813
conducting business transactions of the organization if such service is 814
purchased or leased from a company rendering telecommunications 815
service and such purchase or lease is subject to tax under this chapter, 816
(iv) access or interconnection service purchased by a provider of 817
telecommunications service from another provider of such service for 818
purposes of rendering such service, provided the purchaser submits to 819
the seller a certificate attesting to the applicability of this exclusion, 820
upon receipt of which the seller is relieved of any tax liability for such 821
sale so long as the certificate is taken in good faith by the seller, (v) 822
data processing and information services that allow data to be 823
generated, acquired, stored, processed or retrieved and delivered by 824
an electronic transmission to a purchaser where such purchaser's 825 Substitute Bill No. 7177
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primary purpose for the underlying transaction is the processed data 826
or information, (vi) installation or maintenance of wiring equipment 827
on a customer's premises, (vii) tangible personal property, (viii) 828
advertising, including, but not limited to, directory advertising, (ix) 829
billing and collection services provided to third parties, (x) Internet 830
access service, (xi) ancillary services, and (xii) digital products 831
delivered electronically, including, but not limited to, software, music, 832
video, reading materials or ring tones. 833
(B) For purposes of the tax imposed under this chapter (i) gross 834
receipts from the rendering of telecommunications service shall 835
include any subscriber line charge or charges as required by the 836
Federal Communications Commission and any charges for access 837
service collected by any person rendering such service unless 838
otherwise excluded from such gross receipts under this chapter, and 839
such gross receipts from the rendering of telecommunications service 840
shall also include any charges for vertical service, for the installation or 841
maintenance of wiring equipment on a customer's premises, and for 842
directory assistance service; (ii) gross receipts from the rendering of 843
telecommunications service shall not include any local charge for calls 844
from public or semipublic telephones; and (iii) gross receipts from the 845
rendering of telecommunications service shall not include any charge 846
for calls purchased using a prepaid telephone calling service, as 847
defined in subdivision (34) of this subsection. 848
(27) "Community antenna television service" means (A) the one-way 849
transmission to subscribers of video programming or information by 850
cable, fiber optics, satellite, microwave or any other means, and 851
subscriber interaction, if any, which is required for the selection of 852
such video programming or information, and (B) noncable 853
communications service, as defined in section 16-1, unless such 854
noncable communications service is purchased by a cable network as 855
that term is used in subsection (k) of section 12-218. 856
(28) "Hospital" means a hospital included within the definition of 857
health care facilities or institutions under section 19a-630 and licensed 858 Substitute Bill No. 7177
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as a short-term general hospital by the Department of Public Health, 859
but does not include (A) any hospital which, on January 30, 1997, is 860
within the class of hospitals licensed by the department as children's 861
general hospitals, or (B) a short-term acute hospital operated 862
exclusively by the state other than a short-term acute hospital operated 863
by the state as a receiver pursuant to chapter 920. 864
(29) "Patient care services" means therapeutic and diagnostic 865
medical services provided by the hospital to inpatients and outpatients 866
including tangible personal property transferred in connection with 867
such services. 868
(30) "Another state" or "other state" means any state of the United 869
States or the District of Columbia excluding the state of Connecticut. 870
(31) "Professional employer agreement" means a written contract 871
between a professional employer organization and a service recipient 872
whereby the professional employer organization agrees to provide at 873
least seventy-five per cent of the employees at the service recipient's 874
worksite, which contract provides that such worksite employees are 875
intended to be permanent employees rather than temporary 876
employees, and employer responsibilities for such worksite 877
employees, including hiring, firing and disciplining, are allocated 878
between the professional employer organization and the service 879
recipient. 880
(32) "Professional employer organization" means any person that 881
enters into a professional employer agreement with a service recipient 882
whereby the professional employer organization agrees to provide at 883
least seventy-five per cent of the employees at the service recipient's 884
worksite. 885
(33) "Worksite employee" means an employee, the employer 886
responsibilities for which, including hiring, firing and disciplining, are 887
allocated, under a professional employer agreement, between a 888
professional employer organization and a service recipient. 889 Substitute Bill No. 7177
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(34) "Prepaid telephone calling service" means the right to 890
exclusively purchase telecommunications service, that must be paid for 891
in advance and that enables the origination of calls using an access 892
number or authorization code, or both, whether manually or 893
electronically dialed, provided the remaining amount of units of 894
service that have been prepaid shall be known on a continuous basis. 895
(35) "Canned or prewritten software" means all software, other than 896
custom software, that is held or existing for general or repeated sale, 897
license or lease. Software initially developed as custom software for in-898
house use and subsequently sold, licensed or leased to unrelated third 899
parties shall be considered canned or prewritten software. 900
(36) "Custom software" means a computer program prepared to the 901
special order of a single customer. 902
(37) "Services" for purposes of subdivision (2) of this subsection, 903
means: 904
(A) Computer and data processing services, including, but not 905
limited to, time, programming, code writing, modification of existing 906
programs, feasibility studies and installation and implementation of 907
software programs and systems even where such services are rendered 908
in connection with the development, creation or production of canned 909
or custom software or the license of custom software; 910
(B) Credit information and reporting services; 911
(C) Services by employment agencies and agencies providing 912
personnel services; 913
(D) Private investigation, protection, patrol work, watchman and 914
armored car services, exclusive of (i) services of off-duty police officers 915
and off-duty firefighters, and (ii) coin and currency services provided 916
to a financial services company by or through another financial 917
services company. For purposes of this subparagraph, "financial 918
services company" has the same meaning as provided under 919 Substitute Bill No. 7177
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subparagraphs (A) to (H), inclusive, of subdivision (6) of subsection (a) 920
of section 12-218b; 921
(E) Painting and lettering services; 922
(F) Photographic studio services; 923
(G) Telephone answering services; 924
(H) Stenographic services; 925
(I) Services to industrial, commercial or income-producing real 926
property, including, but not limited to, such services as management, 927
electrical, plumbing, painting and carpentry, p rovided 928
income-producing property shall not include property used 929
exclusively for residential purposes in which the owner resides and 930
which contains no more than three dwelling units, or a housing facility 931
for low and moderate income families and persons owned or operated 932
by a nonprofit housing organization, as defined in subdivision (29) of 933
section 12-412; 934
(J) Business analysis, management, management consulting and 935
public relations services, excluding (i) any environmental consulting 936
services, (ii) any training services provided by an institution of higher 937
education licensed or accredited by the Board of Regents for Higher 938
Education or Office of Higher Education pursuant to sections 10a-35a 939
and 10a-34, respectively, and (iii) on and after January 1, 1994, any 940
business analysis, management, management consulting and public 941
relations services when such services are rendered in connection with 942
an aircraft leased or owned by a certificated air carrier or in connection 943
with an aircraft which has a maximum certificated take-off weight of 944
six thousand pounds or more; 945
(K) Services providing "piped-in" music to business or professional 946
establishments; 947
(L) Flight instruction and chartering services by a certificated air 948 Substitute Bill No. 7177
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carrier on an aircraft, the use of which for such purposes, but for the 949
provisions of subdivision (4) of section 12-410 and subdivision (12) of 950
section 12-411, as amended by this act, would be deemed a retail sale 951
and a taxable storage or use, respectively, of such aircraft by such 952
carrier; 953
(M) Motor vehicle repair services, including any type of repair, 954
painting or replacement related to the body or any of the operating 955
parts of a motor vehicle; 956
(N) Motor vehicle parking, including the provision of space, other 957
than metered space, in a lot having thirty or more spaces, excluding (i) 958
space in a parking lot owned or leased under the terms of a lease of not 959
less than ten years' duration and operated by an employer for the 960
exclusive use of its employees, (ii) space in municipally operated 961
railroad parking facilities in municipalities located within an area of 962
the state designated as a severe nonattainment area for ozone under 963
the federal Clean Air Act or space in a railroad parking facility in a 964
municipality located within an area of the state designated as a severe 965
nonattainment area for ozone under the federal Clean Air Act owned 966
or operated by the state on or after April 1, 2000, (iii) space in a 967
seasonal parking lot provided by an entity subject to the exemption set 968
forth in subdivision (1) of section 12-412, and (iv) space in a 969
municipally owned parking lot; 970
(O) Radio or television repair services; 971
(P) Furniture reupholstering and repair services; 972
(Q) Repair services to any electrical or electronic device, including, 973
but not limited to, equipment used for purposes of refrigeration or 974
air-conditioning; 975
(R) Lobbying or consulting services for purposes of representing the 976
interests of a client in relation to the functions of any governmental 977
entity or instrumentality; 978 Substitute Bill No. 7177
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(S) Services of the agent of any person in relation to the sale of any 979
item of tangible personal property for such person, exclusive of the 980
services of a consignee selling works of art, as defined in subsection (b) 981
of section 12-376c, or articles of clothing or footwear intended to be 982
worn on or about the human body other than (i) any special clothing 983
or footwear primarily designed for athletic activity or protective use 984
and which is not normally worn except when used for the athletic 985
activity or protective use for which it was designed, and (ii) jewelry, 986
handbags, luggage, umbrellas, wallets, watches and similar items 987
carried on or about the human body but not worn on the body, under 988
consignment, exclusive of services provided by an auctioneer; 989
(T) Locksmith services; 990
(U) Advertising or public relations services, including layout, art 991
direction, graphic design, mechanical preparation or production 992
supervision, not related to the development of media advertising or 993
cooperative direct mail advertising; 994
(V) Landscaping and horticulture services; 995
(W) Window cleaning services; 996
(X) Maintenance services; 997
(Y) Janitorial services; 998
(Z) Exterminating services; 999
(AA) Swimming pool cleaning and maintenance services; 1000
(BB) Miscellaneous personal services included in industry group 729 1001
in the Standard Industrial Classification Manual, United States Office 1002
of Management and Budget, 1987 edition, or U.S. industry 532220, 1003
812191, 812199 or 812990 in the North American Industrial 1004
Classification System United States Manual, United States Office of 1005
Management and Budget, 1997 edition, exclusive of (i) services 1006 Substitute Bill No. 7177
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rendered by massage therapists licensed pursuant to chapter 384a, and 1007
(ii) services rendered by an electrologist licensed pursuant to chapter 1008
388; 1009
(CC) Any repair or maintenance service to any item of tangible 1010
personal property including any contract of warranty or service related 1011
to any such item; 1012
(DD) Business analysis, management or managing consulting 1013
services rendered by a general partner, or an affiliate thereof, to a 1014
limited partnership, provided (i) the general partner, or an affiliate 1015
thereof, is compensated for the rendition of such services other than 1016
through a distributive share of partnership profits or an annual 1017
percentage of partnership capital or assets established in the limited 1018
partnership's offering statement, and (ii) the general partner, or an 1019
affiliate thereof, offers such services to others, including any other 1020
partnership. As used in this subparagraph "an affiliate of a general 1021
partner" means an entity which is directly or indirectly owned fifty per 1022
cent or more in common with a general partner; 1023
(EE) Notwithstanding the provisions of section 12-412, except 1024
subdivision (87) of said section 12-412, patient care services, as defined 1025
in subdivision (29) of this subsection by a hospital, except that "sale" 1026
and "selling" does not include such patient care services for which 1027
payment is received by the hospital during the period commencing 1028
July 1, 2001, and ending June 30, 2003; 1029
(FF) Health and athletic club services, exclusive of (i) any such 1030
services provided without any additional charge which are included in 1031
any dues or initiation fees paid to any such club, which dues or fees 1032
are subject to tax under section 12-543, and (ii) any such services 1033
provided by a municipality or an organization that is described in 1034
Section 501(c) of the Internal Revenue Code of 1986, or any subsequent 1035
corresponding internal revenue code of the United States, as from time 1036
to time amended; 1037 Substitute Bill No. 7177
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(GG) Motor vehicle storage services, including storage of motor 1038
homes, campers and camp trailers, other than the furnishing of space 1039
as described in subparagraph (P) of subdivision (2) of this subsection; 1040
(HH) Packing and crating services, other than those provided in 1041
connection with the sale of tangible personal property by the retailer of 1042
such property; 1043
(II) Motor vehicle towing and road services, other than motor 1044
vehicle repair services; 1045
(JJ) Intrastate transportation services provided by livery services, 1046
including limousines, community cars or vans, with a driver. Intrastate 1047
transportation services shall not include transportation by taxicab, 1048
motor bus, ambulance or ambulette, scheduled public transportation, 1049
nonemergency medical transportation provided under the Medicaid 1050
program, paratransit services provided by agreement or arrangement 1051
with the state or any political subdivision of the state, dial-a-ride 1052
services or services provided in connection with funerals; 1053
(KK) Pet grooming and pet boarding services, except if such services 1054
are provided as an integral part of professional veterinary services, 1055
and pet obedience services; 1056
(LL) Services in connection with a cosmetic medical procedure. For 1057
purposes of this subparagraph, "cosmetic medical procedure" means 1058
any medical procedure performed on an individual that is directed at 1059
improving the individual's appearance and that does not meaningfully 1060
promote the proper function of the body or prevent or treat illness or 1061
disease. "Cosmetic medical procedure" includes, but is not limited to, 1062
cosmetic surgery, hair transplants, cosmetic injections, cosmetic soft 1063
tissue fillers, dermabrasion and chemical peel, laser hair removal, laser 1064
skin resurfacing, laser treatment of leg veins and sclerotherapy. 1065
"Cosmetic medical procedure" does not include reconstructive surgery. 1066
"Reconstructive surgery" includes any surgery performed on abnormal 1067
structures caused by or related to congenital defects, developmental 1068 Substitute Bill No. 7177
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abnormalities, trauma, infection, tumors or disease, including 1069
procedures to improve function or give a more normal appearance; 1070
(MM) Manicure services, pedicure services and all other nail 1071
services, regardless of where performed, including airbrushing, fills, 1072
full sets, nail sculpting, paraffin treatments and polishes; 1073
(NN) Spa services, regardless of where performed, including body 1074
waxing and wraps, peels, scrubs and facials; and 1075
(OO) Car wash services, including coin-operated car washes. 1076
(38) "Media payroll services company" means a retailer whose 1077
principal business activity is the management and payment of 1078
compensation, fringe benefits, workers' compensation, payroll taxes or 1079
assessments to individuals providing services to an eligible production 1080
company pursuant to section 12-217jj. 1081
(39) "Certified competitive video service" means video 1082
programming service provided through wireline facilities, a portion of 1083
which are located in the public right-of-way, without regard to 1084
delivery technology, including Internet protocol technology. "Certified 1085
competitive video service" does not include any video programming 1086
provided by a commercial mobile service provider, as defined in 47 1087
USC 332(d); any video programming provided as part of community 1088
antenna television service; any video programming provided as part 1089
of, and via, a service that enables users to access content, information, 1090
electronic mail or other services over the Internet. 1091
(40) "Directory assistance" means an ancillary service of providing 1092
telephone number information or address information. 1093
(41) "Vertical service" means an ancillary service that is offered in 1094
connection with one or more telecommunications services, offering 1095
advanced calling features that allow customers to identify callers and 1096
to manage multiple calls and call connections, including conference 1097
bridging services. 1098 Substitute Bill No. 7177
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(42) "Bed and breakfast establishment" means any private operator-1099
occupied house, other than a hotel, [or] lodging house or short-term 1100
rental property, with twelve or fewer rooms in which persons are 1101
lodged for hire and a full morning meal is included in the rent. 1102
(43) "Short-term rental property" means any dwelling unit, other 1103
than a hotel, lodging house or bed and breakfast establishment, in 1104
which a guest is lodged for hire, with or without meals, pursuant to a 1105
short-term rental transaction. For the purposes of this subdivision, 1106
"dwelling unit", "guest" and "short-term rental transaction" have the 1107
same meanings as provided in section 1 of this act. 1108
(b) Wherever in this chapter reference is made to the sale of tangible 1109
personal property or services, it shall be construed to include sales 1110
described in subdivision (2) of subsection (a) of this section, except as 1111
may be specifically provided to the contrary. 1112
Sec. 9. Section 12-408 of the general statutes is repealed and the 1113
following is substituted in lieu thereof (Effective July 1, 2019, and 1114
applicable to sales occurring on or after July 1, 2019): 1115
(1) (A) For the privilege of making any sales, as defined in 1116
subdivision (2) of subsection (a) of section 12-407, as amended by this 1117
act, at retail, in this state for a consideration, a tax is hereby imposed 1118
on all retailers at the rate of six and thirty-five-hundredths per cent of 1119
the gross receipts of any retailer from the sale of all tangible personal 1120
property sold at retail or from the rendering of any services 1121
constituting a sale in accordance with subdivision (2) of subsection (a) 1122
of section 12-407, as amended by this act, except, in lieu of said rate of 1123
six and thirty-five-hundredths per cent, the rates provided in 1124
subparagraphs (B) to (H), inclusive, of this subdivision; 1125
(B) (i) At a rate of fifteen per cent with respect to each transfer of 1126
occupancy, from the total amount of rent received by a hotel or 1127
lodging house for the first period not exceeding thirty consecutive 1128
calendar days; 1129 Substitute Bill No. 7177
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(ii) At a rate of eleven per cent with respect to each transfer of 1130
occupancy, from the total amount of rent received by a bed and 1131
breakfast establishment for the first period not exceeding thirty 1132
consecutive calendar days; 1133
(iii) At a rate of five per cent with respect to each transfer of 1134
occupancy to a guest, as defined in section 1 of this act, from the total 1135
amount of rent received by a short-term rental operator, as defined in 1136
section 1 of this act, for the first period not exceeding thirty 1137
consecutive calendar days; 1138
(C) With respect to the sale of a motor vehicle to any individual who 1139
is a member of the armed forces of the United States and is on full-time 1140
active duty in Connecticut and who is considered, under 50 App USC 1141
574, a resident of another state, or to any such individual and the 1142
spouse thereof, at a rate of four and one-half per cent of the gross 1143
receipts of any retailer from such sales, provided such retailer requires 1144
and maintains a declaration by such individual, prescribed as to form 1145
by the commissioner and bearing notice to the effect that false 1146
statements made in such declaration are punishable, or other evidence, 1147
satisfactory to the commissioner, concerning the purchaser's state of 1148
residence under 50 App USC 574; 1149
(D) (i) With respect to the sales of computer and data processing 1150
services occurring on or after July 1, 2001, at the rate of one per cent, 1151
and (ii) with respect to sales of Internet access services, on and after 1152
July 1, 2001, such services shall be exempt from such tax; 1153
(E) (i) With respect to the sales of labor that is otherwise taxable 1154
under subparagraph (C) or (G) of subdivision (2) of subsection (a) of 1155
section 12-407, as amended by this act, on existing vessels and repair or 1156
maintenance services on vessels occurring on and after July 1, 1999, 1157
such services shall be exempt from such tax; 1158
(ii) With respect to the sale of a vessel, a motor for a vessel or a 1159
trailer used for transporting a vessel, at the rate of two and ninety-1160 Substitute Bill No. 7177
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nine-hundredths per cent, except that the sale of a vessel shall be 1161
exempt from such tax if such vessel is docked in this state for sixty or 1162
fewer days in a calendar year; 1163
(F) With respect to patient care services for which payment is 1164
received by the hospital on or after July 1, 1999, and prior to July 1, 1165
2001, at the rate of five and three-fourths per cent and on and after July 1166
1, 2001, such services shall be exempt from such tax; 1167
(G) With respect to the rental or leasing of a passenger motor 1168
vehicle for a period of thirty consecutive calendar days or less, at a rate 1169
of nine and thirty-five-hundredths per cent; 1170
(H) With respect to the sale of (i) a motor vehicle for a sales price 1171
exceeding fifty thousand dollars, at a rate of seven and three-fourths 1172
per cent on the entire sales price, (ii) jewelry, whether real or imitation, 1173
for a sales price exceeding five thousand dollars, at a rate of seven and 1174
three-fourths per cent on the entire sales price, and (iii) an article of 1175
clothing or footwear intended to be worn on or about the human body, 1176
a handbag, luggage, umbrella, wallet or watch for a sales price 1177
exceeding one thousand dollars, at a rate of seven and three-fourths 1178
per cent on the entire sales price. For purposes of this subparagraph, 1179
"motor vehicle" has the meaning provided in section 14-1, but does not 1180
include a motor vehicle subject to the provisions of subparagraph (C) 1181
of this subdivision, a motor vehicle having a gross vehicle weight 1182
rating over twelve thousand five hundred pounds, or a motor vehicle 1183
having a gross vehicle weight rating of twelve thousand five hundred 1184
pounds or less that is not used for private passenger purposes, but is 1185
designed or used to transport merchandise, freight or persons in 1186
connection with any business enterprise and issued a commercial 1187
registration or more specific type of registration by the Department of 1188
Motor Vehicles; 1189
(I) The rate of tax imposed by this chapter shall be applicable to all 1190
retail sales upon the effective date of such rate, except that a new rate 1191
which represents an increase in the rate applicable to the sale shall not 1192 Substitute Bill No. 7177
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apply to any sales transaction wherein a binding sales contract without 1193
an escalator clause has been entered into prior to the effective date of 1194
the new rate and delivery is made within ninety days after the effective 1195
date of the new rate. For the purposes of payment of the tax imposed 1196
under this section, any retailer of services taxable under subdivision 1197
(37) of subsection (a) of section 12-407, as amended by this act, who 1198
computes taxable income, for purposes of taxation under the Internal 1199
Revenue Code of 1986, or any subsequent corresponding internal 1200
revenue code of the United States, as from time to time amended, on 1201
an accounting basis which recognizes only cash or other valuable 1202
consideration actually received as income and who is liable for such 1203
tax only due to the rendering of such services may make payments 1204
related to such tax for the period during which such income is 1205
received, without penalty or interest, without regard to when such 1206
service is rendered; 1207
(J) (i) For calendar quarters ending on or after September 30, 2019, 1208
the commissioner shall deposit into the regional planning incentive 1209
account, established pursuant to section 4-66k, six and seven-tenths 1210
per cent of the amounts received by the state from the tax imposed 1211
under [subparagraph (B)] subparagraphs (B)(i) and (B)(ii) of this 1212
subdivision and ten and seven-tenths per cent of the amounts received 1213
by the state from the tax imposed under subparagraph (G) of this 1214
subdivision; 1215
(ii) For calendar quarters ending on or after September 30, 2018, the 1216
commissioner shall deposit into the Tourism Fund established under 1217
section 10-395b ten per cent of the amounts received by the state from 1218
the tax imposed under [subparagraph (B)] subparagraphs (B)(i) and 1219
(B)(ii) of this subdivision; 1220
(K) For calendar months commencing on or after July 1, 2021, the 1221
commissioner shall deposit into the municipal revenue sharing 1222
account established pursuant to section 4-66l seven and nine-tenths per 1223
cent of the amounts received by the state from the tax imposed under 1224
subparagraph (A) of this subdivision; and 1225 Substitute Bill No. 7177
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(L) (i) For calendar months commencing on or after July 1, 2017, the 1226
commissioner shall deposit into the Special Transportation Fund 1227
established under section 13b-68 seven and nine-tenths per cent of the 1228
amounts received by the state from the tax imposed under 1229
subparagraph (A) of this subdivision; 1230
(ii) For calendar months commencing on or after July 1, 2018, but 1231
prior to July 1, 2019, the commissioner shall deposit into the Special 1232
Transportation Fund established under section 13b-68 eight per cent of 1233
the amounts received by the state from the tax imposed under 1234
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1235
vehicle; 1236
(iii) For calendar months commencing on or after July 1, 2019, but 1237
prior to July 1, 2020, the commissioner shall deposit into the Special 1238
Transportation Fund established under section 13b-68 thirty-three per 1239
cent of the amounts received by the state from the tax imposed under 1240
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1241
vehicle; 1242
(iv) For calendar months commencing on or after July 1, 2020, but 1243
prior to July 1, 2021, the commissioner shall deposit into the Special 1244
Transportation Fund established under section 13b-68 fifty-six per cent 1245
of the amounts received by the state from the tax imposed under 1246
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1247
vehicle; 1248
(v) For calendar months commencing on or after July 1, 2021, but 1249
prior to July 1, 2022, the commissioner shall deposit into the Special 1250
Transportation Fund established under section 13b-68 seventy-five per 1251
cent of the amounts received by the state from the tax imposed under 1252
subparagraphs (A) and (H) of this subdivision on the sale of a motor 1253
vehicle; [and] 1254
(vi) For calendar months commencing on or after July 1, 2022, the 1255
commissioner shall deposit into the Special Transportation Fund 1256 Substitute Bill No. 7177
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established under section 13b-68 one hundred per cent of the amounts 1257
received by the state from the tax imposed under subparagraphs (A) 1258
and (H) of this subdivision on the sale of a motor vehicle; [.] and 1259
(vii) For calendar months commencing on or after July 1, 2019, the 1260
commissioner shall deposit into the Housing Trust Fund established 1261
under section 8-336o fifty per cent of the amounts received by the state 1262
from the tax imposed under subparagraph (B)(iii) of this subdivision. 1263
(2) (A) Reimbursement for the tax hereby imposed shall be collected 1264
by the retailer from the consumer and such tax reimbursement, termed 1265
"tax" in this and the following subsections, shall be paid by the 1266
consumer to the retailer and each retailer shall collect from the 1267
consumer the full amount of the tax imposed by this chapter or an 1268
amount equal as nearly as possible or practicable to the average 1269
equivalent thereof. Such tax shall be a debt from the consumer to the 1270
retailer, when so added to the original sales price, and shall be 1271
recoverable at law in the same manner as other debts except as 1272
provided in section 12-432a. The amount of tax reimbursement, when 1273
so collected, shall be deemed to be a special fund in trust for the state 1274
of Connecticut. 1275
(B) Whenever such tax, payable by the consumer (i) with respect to 1276
a charge account or credit sale occurring on or after July 1, 1984, is 1277
remitted by the retailer to the commissioner and such sale as an 1278
account receivable is determined to be worthless and is actually 1279
written off as uncollectible for federal income tax purposes, or (ii) to a 1280
retailer who computes taxable income, for purposes of taxation under 1281
the Internal Revenue Code of 1986, or any subsequent corresponding 1282
internal revenue code of the United States, as from time to time 1283
amended, on the cash basis method of accounting with respect to a sale 1284
occurring on or after July 1, 1989, is remitted by the retailer to the 1285
commissioner and such sale as an account receivable is determined to 1286
be worthless, the amount of such tax remitted may be credited against 1287
the tax due on the sales tax return filed by the retailer for the monthly 1288
or quarterly period, whichever is applicable, next following the period 1289 Substitute Bill No. 7177
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in which such amount is actually so written off, but in no event shall 1290
such credit be allowed later than three years following the date such 1291
tax is remitted, unless the credit relates to a period for which a waiver 1292
is given pursuant to subsection (g) of section 12-415. The commissioner 1293
shall, by regulations adopted in accordance with chapter 54, provide 1294
standards for proving any such claim for credit. If any account with 1295
respect to which such credit is allowed is thereafter collected by the 1296
retailer in whole or in part, the amount so collected shall be included 1297
in the sales tax return covering the period in which such collection 1298
occurs. The tax applicable in any such case shall be determined in 1299
accordance with the rate of sales tax in effect at the time of the original 1300
sale. 1301
(C) (i) Any person required to collect tax in accordance with this 1302
subsection who demonstrates to the satisfaction of the Commissioner 1303
of Revenue Services by July first of any year that, in any two quarterly 1304
periods as described in section 12-414, within the most recent four 1305
consecutive quarterly periods, such person was a materialman as such 1306
term is used in chapter 847, who has at least fifty per cent of such 1307
person's sales of building materials to contractors, subcontractors or 1308
repairmen for the improvement of real property, and is authorized by 1309
said chapter to file a mechanic's lien upon such real property and 1310
improvement shall, with respect to such sales made through the 1311
quarterly period ending the succeeding June thirtieth, collect tax due 1312
on such sales, and on sales to such contractors, subcontractors or 1313
repairmen of services described in subdivision (2) of subsection (a) of 1314
section 12-407, as amended by this act, with respect to such building 1315
materials, for such purpose and made during such July first through 1316
June thirtieth period, at the time and to the extent that such person 1317
receives the receipts from, or consideration for, such sales from such 1318
contractors, subcontractors or repairmen, provided if such person 1319
receives a portion of such receipts or consideration, such person shall 1320
collect the tax due on such portion at the time the portion is received. 1321
The taxes imposed by this chapter on such receipts and consideration 1322
shall be deemed imposed, solely for purposes of determining when 1323 Substitute Bill No. 7177
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such person is required to collect and pay over such taxes to the 1324
commissioner under section 12-414, when such person has received 1325
payment of such receipts or consideration in money, or money's worth, 1326
from such contractor, subcontractor or repairman. A contractor, 1327
subcontractor or repairman who purchases building materials or 1328
services from such person pursuant to this subparagraph shall, at the 1329
time such contractor, subcontractor or repairman pays any portion of 1330
the purchase price, pay to the person the tax due on the portion of the 1331
purchase price so paid. 1332
(ii) In the event that a materialman described in this subparagraph 1333
factors any portion of such materialman's receivables, such 1334
materialman shall be deemed to have received payment of such 1335
receipts or consideration in money or money's worth, from the 1336
contractor, subcontractor or repairman and shall be required to pay 1337
over tax on such sale with the next return due, with a credit against 1338
such tax for any tax already paid over with respect to such sale. Any 1339
such amount of tax paid over shall be on account of the tax required to 1340
be collected on the sale to which it relates and such materialman may 1341
take a credit against any tax paid by such contractor, subcontractor or 1342
repairman in the future on such sale, to ensure that tax paid over with 1343
respect to such sale does not exceed the amount of tax imposed on 1344
such sale as if the entire purchase price had been paid at the time of 1345
sale. 1346
(iii) A materialman described in this subparagraph who has not 1347
collected the tax due on the full purchase price for a sale described in 1348
this subparagraph from a contractor, subcontractor or repairman 1349
within one year from the date of such sale, shall pay over to the 1350
commissioner the tax due on any balance of such full purchase price 1351
with such materialman's return for the period which includes the date 1352
which is one year after the date of such sale. 1353
(iv) The commissioner may assess additional tax due with respect to 1354
a sale described in this subparagraph not later than three years from 1355
the date the tax is required to be paid over to the commissioner 1356 Substitute Bill No. 7177
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pursuant to this subparagraph, and in the case of a wilfully false or 1357
fraudulent return with intent to evade the tax, or where no return has 1358
been filed such taxpayer shall be subject to the provisions of section 12-1359
428. 1360
(D) In the case of a sale by a producer or wholesaler of newspapers 1361
to a vendor who is not otherwise required to obtain a permit under 1362
this chapter, such producer or wholesaler shall collect the sales tax on 1363
such newspapers at the point of transfer to such vendor. Such tax shall 1364
be based on the stated retail price of such newspapers. Such vendor 1365
may add an amount to the price of the newspapers equal to the 1366
amount paid as sales tax to the producer or wholesaler and such 1367
vendor shall not be required to remit such amount to the state. 1368
(3) For the purpose of adding and collecting the tax imposed by this 1369
chapter, or an amount equal as nearly as possible or practicable to the 1370
average equivalent thereof, by the retailer from the consumer the 1371
following bracket system shall be in force and effect as follows: 1372
T1 Amount of Sale Amount of Tax
T2 $0.00 to $0.07 inclusive No Tax
T3 .08 to .23 inclusive 1 cent
T4 .24 to .39 inclusive 2 cents
T5 .40 to .55 inclusive 3 cents
T6 .56 to .70 inclusive 4 cents
T7 .71 to .86 inclusive 5 cents
T8 .87 to 1.02 inclusive 6 cents
T9 1.03 to 1.18 inclusive 7 cents
On all sales above $1.18, the tax shall be computed at the rate of six 1373
and thirty-five-hundredths per cent. 1374
(4) No retailer shall advertise or hold out or state to the public or to 1375
any consumer, directly or indirectly, that the tax or any part thereof 1376
will be assumed or absorbed by the retailer or that it will not be added 1377 Substitute Bill No. 7177
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to the sales price of the property sold or that, if added, it or any part 1378
thereof will be refunded. Under the provisions of this section, 1379
however, a retailer may advertise the sale of tangible personal 1380
property by any of the following methods: By stating the sales price 1381
alone without reference to the tax; by stating separately the sales price 1382
and the amount of tax to be collected thereon; by stating the sales price 1383
"plus tax" or "exclusive of tax" or by stating a sales price which 1384
includes the tax, together with the words "tax included" or "tax incl."; 1385
provided the retailer in the case of all such sales shall maintain his 1386
records to show separately the actual price of such sales and the 1387
amount of the tax paid thereon; and provided such retailer, if 1388
requested, shall furnish the consumer with a sales slip or other like 1389
evidence of the sale, showing the tax separately computed thereon. 1390
Any person violating any provision of this subsection shall be fined 1391
five hundred dollars for each offense. 1392
(5) No retailer shall exhibit or display on his premises any notice, 1393
sign or other advertising matter tending to mislead the public in 1394
connection with the imposition or collection of the tax. The 1395
Commissioner of Revenue Services may approve a form of notice for 1396
the purpose of explaining the operation of the tax. 1397
(6) The Commissioner of Revenue Services shall adopt regulations, 1398
in accordance with chapter 54, establishing a procedure for 1399
determination of qualifications with respect to the reduced rate of sales 1400
tax in the case of certain sales of motor vehicles to members of the 1401
armed forces as provided in subsection (1) of this section. 1402
(7) For purposes of the tax imposed by this chapter, with respect to 1403
toll telephone service paid by inserting coins in coin-operated 1404
telephones, the tax shall be computed to the nearest multiple of five 1405
cents, except if the tax is midway between multiples of five cents, the 1406
next higher multiple shall apply. 1407
Sec. 10. Section 12-411 of the general statutes is repealed and the 1408
following is substituted in lieu thereof (Effective July 1, 2019, and 1409 Substitute Bill No. 7177
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applicable to sales occurring on or after July 1, 2019): 1410
(1) (A) An excise tax is hereby imposed on the storage, acceptance, 1411
consumption or any other use in this state of tangible personal 1412
property purchased from any retailer for storage, acceptance, 1413
consumption or any other use in this state, the acceptance or receipt of 1414
any services constituting a sale in accordance with subdivision (2) of 1415
subsection (a) of section 12-407, as amended by this act, purchased 1416
from any retailer for consumption or use in this state, or the storage, 1417
acceptance, consumption or any other use in this state of tangible 1418
personal property which has been manufactured, fabricated, 1419
assembled or processed from materials by a person, either within or 1420
without this state, for storage, acceptance, consumption or any other 1421
use by such person in this state, to be measured by the sales price of 1422
materials, at the rate of six and thirty-five-hundredths per cent of the 1423
sales price of such property or services, except, in lieu of said rate of six 1424
and thirty-five-hundredths per cent; 1425
(B) (i) At a rate of fifteen per cent of the rent paid to a hotel or 1426
lodging house for the first period not exceeding thirty consecutive 1427
calendar days; 1428
(ii) At a rate of eleven per cent of the rent paid to a bed and 1429
breakfast establishment for the first period not exceeding thirty 1430
consecutive calendar days; 1431
(iii) At a rate of five per cent of the rent paid to a short-term rental 1432
operator, as defined in section 1 of this act, for the first period not 1433
exceeding thirty consecutive calendar days; 1434
(C) With respect to the storage, acceptance, consumption or use in 1435
this state of a motor vehicle purchased from any retailer for storage, 1436
acceptance, consumption or use in this state by any individual who is a 1437
member of the armed forces of the United States and is on full-time 1438
active duty in Connecticut and who is considered, under 50 App USC 1439
574, a resident of another state, or to any such individual and the 1440 Substitute Bill No. 7177
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spouse of such individual at a rate of four and one-half per cent of the 1441
sales price of such vehicle, provided such retailer requires and 1442
maintains a declaration by such individual, prescribed as to form by 1443
the commissioner and bearing notice to the effect that false statements 1444
made in such declaration are punishable, or other evidence, 1445
satisfactory to the commissioner, concerning the purchaser's state of 1446
residence under 50 App USC 574; 1447
(D) (i) With respect to the acceptance or receipt in this state of labor 1448
that is otherwise taxable under subparagraph (C) or (G) of subdivision 1449
(2) of subsection (a) of section 12-407, as amended by this act, on 1450
existing vessels and repair or maintenance services on vessels 1451
occurring on and after July 1, 1999, such services shall be exempt from 1452
such tax; 1453
(ii) (I) With respect to the storage, acceptance or other use of a vessel 1454
in this state, at the rate of two and ninety-nine-hundredths per cent, 1455
except that such storage, acceptance or other use shall be exempt from 1456
such tax if such vessel is docked in this state for sixty or fewer days in 1457
a calendar year; 1458
(II) With respect to the storage, acceptance or other use of a motor 1459
for a vessel or a trailer used for transporting a vessel in this state, at the 1460
rate of two and ninety-nine-hundredths per cent; 1461
(E) (i) With respect to the acceptance or receipt in this state of 1462
computer and data processing services purchased from any retailer for 1463
consumption or use in this state occurring on or after July 1, 2001, at 1464
the rate of one per cent of such services, and (ii) with respect to the 1465
acceptance or receipt in this state of Internet access services, on and 1466
after July 1, 2001, such services shall be exempt from such tax; 1467
(F) With respect to the acceptance or receipt in this state of patient 1468
care services purchased from any retailer for consumption or use in 1469
this state for which payment is received by the hospital on or after July 1470
1, 1999, and prior to July 1, 2001, at the rate of five and three-fourths 1471 Substitute Bill No. 7177
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per cent and on and after July 1, 2001, such services shall be exempt 1472
from such tax; 1473
(G) With respect to the rental or leasing of a passenger motor 1474
vehicle for a period of thirty consecutive calendar days or less, at a rate 1475
of nine and thirty-five-hundredths per cent; 1476
(H) With respect to the acceptance or receipt in this state of (i) a 1477
motor vehicle for a sales price exceeding fifty thousand dollars, at a 1478
rate of seven and three-fourths per cent on the entire sales price, (ii) 1479
jewelry, whether real or imitation, for a sales price exceeding five 1480
thousand dollars, at a rate of seven and three-fourths per cent on the 1481
entire sales price, and (iii) an article of clothing or footwear intended to 1482
be worn on or about the human body, a handbag, luggage, umbrella, 1483
wallet or watch for a sales price exceeding one thousand dollars, at a 1484
rate of seven and three-fourths per cent on the entire sales price. For 1485
purposes of this subparagraph, "motor vehicle" has the meaning 1486
provided in section 14-1, but does not include a motor vehicle subject 1487
to the provisions of subparagraph (C) of this subdivision, a motor 1488
vehicle having a gross vehicle weight rating over twelve thousand five 1489
hundred pounds, or a motor vehicle having a gross vehicle weight 1490
rating of twelve thousand five hundred pounds or less that is not used 1491
for private passenger purposes, but is designed or used to transport 1492
merchandise, freight or persons in connection with any business 1493
enterprise and issued a commercial registration or more specific type 1494
of registration by the Department of Motor Vehicles; 1495
(I) (i) For calendar quarters ending on or after September 30, 2019, 1496
the commissioner shall deposit into the regional planning incentive 1497
account, established pursuant to section 4-66k, six and seven-tenths 1498
per cent of the amounts received by the state from the tax imposed 1499
under [subparagraph (B)] subparagraphs (B)(i) and (B)(ii) of this 1500
subdivision and ten and seven-tenths per cent of the amounts received 1501
by the state from the tax imposed under subparagraph (G) of this 1502
subdivision; 1503 Substitute Bill No. 7177
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(ii) For calendar quarters ending on or after September 30, 2018, the 1504
commissioner shall deposit into the Tourism Fund established under 1505
section 10-395b ten per cent of the amounts received by the state from 1506
the tax imposed under [subparagraph (B)] subparagraphs (B)(i) and 1507
(B)(ii) of this subdivision; 1508
(J) For calendar months commencing on or after July 1, 2021, the 1509
commissioner shall deposit into said municipal revenue sharing 1510
account seven and nine-tenths per cent of the amounts received by the 1511
state from the tax imposed under subparagraph (A) of this 1512
subdivision; and 1513
(K) (i) For calendar months commencing on or after July 1, 2017, the 1514
commissioner shall deposit into said Special Transportation Fund 1515
seven and nine-tenths per cent of the amounts received by the state 1516
from the tax imposed under subparagraph (A) of this subdivision; 1517
(ii) For calendar months commencing on or after July 1, 2018, but 1518
prior to July 1, 2019, the commissioner shall deposit into the Special 1519
Transportation Fund established under section 13b-68 eight per cent of 1520
the amounts received by the state from the tax imposed under 1521
subparagraphs (A) and (H) of this subdivision on the acceptance or 1522
receipt in this state of a motor vehicle; 1523
(iii) For calendar months commencing on or after July 1, 2019, but 1524
prior to July 1, 2020, the commissioner shall deposit into the Special 1525
Transportation Fund established under section 13b-68 thirty-three per 1526
cent of the amounts received by the state from the tax imposed under 1527
subparagraphs (A) and (H) of this subdivision on the acceptance or 1528
receipt in this state of a motor vehicle; 1529
(iv) For calendar months commencing on or after July 1, 2020, but 1530
prior to July 1, 2021, the commissioner shall deposit into the Special 1531
Transportation Fund established under section 13b-68 fifty-six per cent 1532
of the amounts received by the state from the tax imposed under 1533
subparagraphs (A) and (H) of this subdivision on the acceptance or 1534 Substitute Bill No. 7177
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receipt in this state of a motor vehicle; 1535
(v) For calendar months commencing on or after July 1, 2021, but 1536
prior to July 1, 2022, the commissioner shall deposit into the Special 1537
Transportation Fund established under section 13b-68 seventy-five per 1538
cent of the amounts received by the state from the tax imposed under 1539
subparagraphs (A) and (H) of this subdivision on the acceptance or 1540
receipt in this state of a motor vehicle; [and] 1541
(vi) For calendar months commencing on or after July 1, 2022, the 1542
commissioner shall deposit into the Special Transportation Fund 1543
established under section 13b-68 one hundred per cent of the amounts 1544
received by the state from the tax imposed under subparagraphs (A) 1545
and (H) of this subdivision on the acceptance or receipt in this state of 1546
a motor vehicle; [.] and 1547
(vii) For calendar months commencing on or after July 1, 2019, the 1548
commissioner shall deposit into the Housing Trust Fund established 1549
under section 8-336o fifty per cent of the amounts received by the state 1550
from the tax imposed under subparagraph (B)(iii) of this subdivision. 1551
(2) Every person storing, accepting, consuming or otherwise using 1552
in this state services or tangible personal property purchased from a 1553
retailer for storage, acceptance, consumption or any other use in this 1554
state and every person storing, accepting, consuming or otherwise 1555
using in this state tangible personal property which has been 1556
manufactured, fabricated, assembled or processed from materials 1557
purchased from a retailer by such person, either within or without this 1558
state, for storage, acceptance, consumption or any other use by such 1559
person in this state is liable for the tax. Such person's liability is not 1560
extinguished until the tax has been paid to this state, except that a 1561
receipt from a retailer engaged in business in this state or from a 1562
retailer who is authorized by the commissioner, under such 1563
regulations as the commissioner may prescribe, to collect the tax and 1564
who is, for the purposes of this chapter relating to the use tax, 1565
regarded as a retailer engaged in business in this state, given to the 1566 Substitute Bill No. 7177
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purchaser pursuant to subdivision (3) of this section is sufficient to 1567
relieve the purchaser from further liability for the tax to which the 1568
receipt refers. 1569
(3) Every retailer engaged in business in this state and making sales 1570
of services or of tangible personal property for storage, acceptance, 1571
consumption or any other use in this state, not exempted under this 1572
chapter, shall, at the time of making a sale or, if the storage, 1573
acceptance, consumption or other use is not then taxable hereunder, at 1574
the time the storage, acceptance, consumption or use becomes taxable, 1575
collect the use tax from the purchaser and give to the purchaser a 1576
receipt therefor in the manner and form prescribed by the 1577
commissioner. For the purpose of uniformity of tax collection by the 1578
retailer the tax brackets set forth in subdivision (3) of section 12-408, as 1579
amended by this act, pertaining to the sales tax shall be employed in 1580
the computation of the tax imposed by this section. 1581
(4) The tax required to be collected by the retailer constitutes a debt 1582
owed to the retailer by the person purchasing tangible personal 1583
property or services from such retailer. The amount of tax, when so 1584
collected, shall be deemed to be a special fund in trust for the state of 1585
Connecticut. 1586
(5) The provisions of subdivision (4) of section 12-408, as amended 1587
by this act, pertaining to the sales tax shall apply with equal force to 1588
the use tax. 1589
(6) The tax required to be collected by the retailer from the 1590
purchaser shall be displayed separately from the list price, the price 1591
advertised in the premises, the marked price, or other price on the 1592
sales check or other proof of sales. 1593
(7) Any person violating the provisions of subdivision (3), (5) or (6) 1594
of this section shall be fined five hundred dollars for each offense. 1595
(8) Every retailer selling services or tangible personal property for 1596
storage, acceptance, consumption or any other use in this state shall 1597 Substitute Bill No. 7177
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register with the commissioner and give the name and address of all 1598
agents operating in this state, the location of all distribution or sales 1599
houses or offices or other places of business in this state and such other 1600
information as the commissioner may require. 1601
(9) For the purpose of the proper administration of this chapter and 1602
to prevent evasion of the use tax and the duty to collect the use tax, it 1603
shall be presumed that services or tangible personal property sold by 1604
any person for delivery in this state is sold for storage, acceptance, 1605
consumption or other use in this state until the contrary is established. 1606
The burden of proving the contrary is upon the person who makes the 1607
sale unless such person takes from the purchaser a certificate to the 1608
effect that the services or property is purchased for resale. 1609
(10) The certificate relieves the person selling the services or 1610
property from the burden of proof only if taken in good faith from a 1611
person who is engaged in the business of selling services or tangible 1612
personal property and who holds the permit provided for by section 1613
12-409 and who, at the time of purchasing the services or tangible 1614
personal property, intends to sell it in the regular course of business or 1615
is unable to ascertain at the time of purchase whether the service or 1616
property will be sold or will be used for some other purpose. 1617
(11) The certificate shall be signed by and bear the name and 1618
address of the purchaser, shall indicate the number of the permit 1619
issued to the purchaser and shall indicate the general character of the 1620
service or tangible personal property sold by the purchaser in the 1621
regular course of business. The certificate shall be substantially in such 1622
form as the commissioner may prescribe. 1623
(12) (A) If a purchaser who gives a certificate makes any storage or 1624
use of the service or property other than retention, demonstration or 1625
display while holding it for sale in the regular course of business, the 1626
storage or use is taxable as of the time the service or property is first so 1627
stored or used. 1628 Substitute Bill No. 7177
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(B) Notwithstanding the provisions of subparagraph (A) of this 1629
subdivision, any storage or use by a certificated air carrier of an aircraft 1630
for purposes other than retention, demonstration or display while 1631
holding it for sale in the regular course of business shall not be deemed 1632
a taxable storage or use by such carrier as of the time the aircraft is first 1633
stored or used by such carrier, irrespective of the classification of such 1634
aircraft on the balance sheet of such carrier for accounting and tax 1635
purposes. 1636
(13) It shall be presumed that tangible personal property shipped or 1637
brought to this state by the purchaser was purchased from a retailer 1638
for storage, use or other consumption in this state. 1639
(14) (A) For the purpose of the proper administration of this chapter 1640
and to prevent evasion of the use tax, a purchase of any service 1641
described in subdivision (37) of subsection (a) of section 12-407, as 1642
amended by this act, shall be considered a purchase for resale only if 1643
the service to be resold is an integral, inseparable component part of a 1644
service described in said subdivision that is to be subsequently sold by 1645
the purchaser to an ultimate consumer. The purchaser of the service 1646
for resale shall maintain, in such form as the commissioner requires, 1647
records that substantiate: (i) From whom the service was purchased 1648
and to whom the service was sold; (ii) the purchase price of the service; 1649
and (iii) the nature of the service to demonstrate that the service was 1650
an integral, inseparable component part of a service described in 1651
subdivision (37) of subsection (a) of section 12-407, as amended by this 1652
act, that was subsequently sold to a consumer. 1653
(B) Notwithstanding the provisions of subparagraph (A) of this 1654
subdivision, no purchase of a service described in subdivision (37) of 1655
subsection (a) of section 12-407, as amended by this act, by a purchaser 1656
shall be considered a purchase for resale if such service is to be 1657
subsequently sold by the purchaser to an ultimate consumer that is 1658
affiliated with the purchaser in the manner described in subparagraph 1659
(A) of subdivision (62) of section 12-412. 1660 Substitute Bill No. 7177
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(15) For the purpose of the proper administration of this chapter 1661
and to prevent evasion of the use tax, no purchase of any service by a 1662
purchaser shall be considered a purchase for resale if such service is to 1663
be subsequently sold by the purchaser, without change, to an ultimate 1664
consumer that is affiliated with the purchaser in the manner described 1665
in subparagraph (A) of subdivision (62) of section 12-412. 1666
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2019 New section
Sec. 2 July 1, 2019 New section
Sec. 3 July 1, 2019 New section
Sec. 4 July 1, 2019 New section
Sec. 5 July 1, 2019 New section
Sec. 6 July 1, 2019 New section
Sec. 7 July 1, 2019 New section
Sec. 8 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-407
Sec. 9 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-408
Sec. 10 July 1, 2019, and
applicable to sales
occurring on or after July
1, 2019
12-411
Statement of Legislative Commissioners:
In Section 2(a)(2) and (a)(3)(A), "or renewal" was added for clarity and
consistency; and in Section 5, "each" was substituted for "all" and
"policy" was substituted for "policies" for consistency, and "such term
is" was deleted to eliminate redundant language.
INS Joint Favorable Subst.