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Typically, the gross receipts of contractors are not subject to sales or use tax. However, in Connecticut, real property contractors are considered to be retailers of services and must collect sales tax on their taxable services.
§12-407(2)(i)(I)-1. GENERAL RULES: The gross receipts from paving, painting or staining, wallpapering, roofing, siding and exterior sheet metal work provided in the renovation and repair of residential property are treated as sales subject to the Sales and Use Taxes Act as of October 1, 1991.
A contractor's labor is not subject to sales or use tax if performed in conjunction with new construction (with some exceptions), owner-occupied residential property (with some exceptions. Overall, from a sales tax compliance perspective, Connecticut is a fairly easy state in which to comply.
More Definitions of New residential construction Residential construction shall not be construed to include improvements, repairs, maintenance or any rehabilitation of existing units. New residential construction means any new building that houses one or more dwelling units.
Property is taxable, this exempts the service charge for new construction (since such property is not existing). NOTE: On new construction, materials are still subject to sales tax on purchase by the contractor. ? The construction of an entirely new building is exempt.
Connecticut requires that a Notice of Intent to lien be served for those who do not have a direct agreement with the owner for the work or materials/services provided. A Notice of intent to lien must be served after work has commenced but no later than 90 days after work has ceased.
Tax-exempt goods Some goods are exempt from sales tax under Connecticut law. Examples include bicycle helmets, most non-prepared food items, medicines, and some medical devices and supplies.
GENERAL RULES: The gross receipts from paving, painting or staining, wallpapering, roofing, siding and exterior sheet metal work provided in the renovation and repair of residential property are treated as sales subject to the Sales and Use Taxes Act as of October 1, 1991.