STATE OF CONNECTICUT
Substitute Bill No. 6605 Page 1
LCO No.
General Assembly
January Session, A.D., 1993
AN ACT PROMOTING SIMPLICITY IN THE DETERMINATION OF THE MEASURE
OF SALES AND USE TAXES AND THE OWNERSHIP OF SALES TAXES COLLECTED
BY A RETAILER FROM RETAIL CUSTOMERS.
Be it enacted by the Senate and House of Representatives in
General Assembly convened:
Section 1. Subsections (8) and (9) of section 12-407 of the
general statutes are repealed and the following is substituted in
lieu thereof:
(8) "Sales price" means the total amount for which tangible
personal property is sold, the total amount of rent received for
occupancy or the total amount received for any service rendered
on or after July 1, 1975, or the total amount of payment or
periodic payments received for leasing or rental of tangible
personal property for the term of any such lease or rental
occurring on or after July 1, 1975, valued in money, whether paid
in money or otherwise, without any deduction on account of any of
the following: (a) The cost of the property sold; (b) the cost of
materials used, labor or service cost, interest charged, losses
or any other expenses; [(c) the cost of transportation of the
property prior to its purchase] (c) ANY CHARGES BY THE SELLER TO
THE PURCHASER FOR SHIPPING OR DELIVERY, NOTWITHSTANDING WHETHER
SUCH CHARGES ARE SEPARATELY STATED IN A WRITTEN CONTRACT, OR ON A
BILL OR INVOICE RENDERED TO SUCH PURCHASER OR WHETHER SUCH
SHIPPING OR DELIVERY IS PROVIDED BY THE SELLER OR A THIRD PARTY.
Such total amounts include all of the following: (a) Any services
that are a part of the sale; (b) any amount for which credit is
given to the purchaser by the seller; (c) all compensation and
all employment related expenses, whether or not separately
stated, paid to or on behalf of employees of a retailer of any
service described in subdivision (i) of subsection (2) of this
section. "Sales price" does not include any of the following: (a)
Cash discounts allowed and taken on sales; (b) any portion of the
amount charged for property returned by customers, which upon
rescission of the contract of sale is refunded either in cash or
credit, provided the property is returned within ninety days from
the date of purchase; (c) the amount of any tax, not including
any manufacturers' or importers' excise tax, imposed by the
United States upon or with respect to retail sales whether
imposed upon the retailer or the consumer; [(d) transportation
charges separately stated, if the transportation occurs after the
purchase of the property is made; (e)] (d) the amount charged for
labor rendered in installing or applying the property sold,
provided such charge is separately stated and exclusive of such
charge for any service rendered within the purview of
subparagraph (I) of subdivision (i) of subsection (2) of this
section; [(f)] (e) the amount charged for separately stated
compensation, fringe benefits, workers' compensation and payroll
taxes or assessments paid to or on behalf of employees of a
retailer who has contracted to manage a service recipient's
property or business premises and renders management services
described in subdivision (i) of subsection (2) of this section,
provided (A) the employees perform such services solely for the
service recipient at its property or business premises and (B)
"sales price" shall include the separately stated compensation,
fringe benefits, workers' compensation and payroll taxes or
assessments paid to or on behalf of any employee of the retailer
who is an officer, director or owner of more than five per cent
of the outstanding capital stock of the retailer. Determination
whether an employee performs services solely for a service
recipient at its property or business premises for purposes of
this subdivision shall be made by reference to such employee's
activities during the time period beginning on the later of the
commencement of the management contract, the date of the
employee's first employment by the retailer or the date which is
six months immediately preceding the date of such determination.
(9) "Gross receipts" means the total amount of the sales
price, of the retail sales of retailers, or the total amount of
the rent received for occupancy or the total amount received for
any service rendered on or after July 1, 1975, or the total
amount of payment or periodic payments received for leasing or
rental of tangible personal property for the term of any such
lease or rental occurring on or after July 1, 1975, valued in
money, whether received in money or otherwise, without any
deduction on account of any of the following: (a) The cost of the
property sold; however, in accordance with such regulations as
the commissioner of revenue services may prescribe, a deduction
may be taken if the retailer has purchased property for some
other purpose than resale, has reimbursed his vendor for tax
which the vendor is required to pay to the state or has paid the
use tax with respect to the property, and has resold the property
prior to making any use of the property other than retention,
demonstration or display while holding it for sale in the regular
course of business. If such a deduction is taken by the retailer,
no refund or credit will be allowed to his vendor with respect to
the sale of the property; (b) the cost of the materials used,
labor or service cost, interest paid, losses or any other
expense; [(c) the cost of transportation of the property prior to
its sale to the purchaser] (c) ANY CHARGES BY THE SELLER TO THE
PURCHASER FOR SHIPPING OR DELIVERY, NOTWITHSTANDING WHETHER SUCH
CHARGES ARE SEPARATELY STATED IN THE WRITTEN CONTRACT, OR ON A
BILL OR INVOICE RENDERED TO SUCH PURCHASER OR WHETHER SUCH
SHIPPING OR DELIVERY IS PROVIDED BY THE SELLER OR A THIRD PARTY.
The total amount of the sales price includes all of the
following: (a) Any services that are a part of the sale; (b) all
receipts, cash, credits and property of any kind; (c) any amount
for which credit is allowed by the seller to the purchaser; (d)
all compensation and all employment related expenses, whether or
not separately stated, paid to or on behalf of employees of a
retailer of any service described in subdivision (i) of
subsection (2) of this section. "Gross receipts" do not include
any of the following: (a) Cash discounts allowed and taken on
sales; (b) any portion of the sales price of property returned by
customers, which upon rescission of the contract of sale is
refunded either in cash or credit, provided the property is
returned within ninety days from the date of sale; (c) the amount
of any tax, not including any manufacturers' or importers' excise
tax, imposed by the United States upon or with respect to retail
sales whether imposed upon the retailer or the consumer; [(d)
transportation charges separately stated, if the transportation
occurs after the sale of the property is made to the purchaser;
(e)] (d) the amount charged for labor rendered in installing or
applying the property sold, provided such charge is separately
stated and exclusive of such charge for any service rendered
within the purview of subparagraph (I) of subdivision (i) of
subsection (2) of this section; [(f)] (e) the amount charged for
separately stated compensation, fringe benefits, workers'
compensation and payroll taxes or assessments paid to or on
behalf of employees of a retailer who has contracted to manage a
service recipient's property or business premises and renders
management services described in subdivision (i) of subsection
(2) of this section, provided (A) the employees perform such
services solely for the service recipient at its property or
business premises and (B) "gross receipts" shall include the
separately stated compensation, fringe benefits, workers'
compensation and payroll taxes or assessments paid to or on
behalf of any employee of the retailer who is an officer,
director or owner of more than five per cent of the outstanding
capital stock of the retailer. Determination whether an employee
performs services solely for a service recipient at its property
or business premises for purposes of this subdivision shall be
made by reference to such employee's activities during the time
period beginning on the later of the commencement of the
management contract, the date of the employee's first employment
by the retailer or the date which is six months immediately
preceding the date of such determination.
Sec. 2. Subsection (1) of section 12-411 of the general
statutes is repealed and the following is substituted in lieu
thereof:
(1) An excise tax is hereby imposed on the storage,
acceptance, consumption or any other use in this state of
tangible personal property purchased from any retailer for
storage, acceptance, consumption or any other use in this state,
the acceptance or receipt of any services constituting a sale in
accordance with subdivisions (i) to (l), inclusive, of subsection
(2) of section 12-407, or, the storage, acceptance, consumption
or any other use in this state of tangible personal property
which has been manufactured, fabricated, assembled or processed
from materials by a person, either within or without this state,
for storage, acceptance, consumption or any other use by such
person in this state, TO BE MEASURED BY THE SALES PRICE OF
MATERIALS, at the rate of six per cent of the sales price of the
property or the consideration paid for any such services, except,
in lieu of said rate of six per cent, (A) at a rate of five and
one-half per cent of the sales price of any repair or replacement
parts exclusively for use in machinery, as defined in subsection
(34) of section 12-412, used directly in a manufacturing or
agricultural production process, (B) at a rate of four and
one-half per cent of the sales price of any motor vehicle sold to
any person who is a member of the armed forces of the United
States and is on full-time active duty in Connecticut but whose
permanent residence is in another state, (C) at a rate of twelve
per cent of the rent paid for occupancy of any room or rooms in a
hotel or lodging house for the first period of not exceeding
thirty consecutive calendar days, and (D) with respect to the
storage, acceptance, consumption or use in this state of vessels
purchased from any retailer for storage, acceptance, consumption
or any other use in this state by any resident of another state,
at a rate which is the lesser of: (i) Six per cent of the sales
price thereof or (ii) the percentage of such sales price that is
payable as a use tax by purchasers making purchases in the
purchaser's state of residence, provided the retailer requires
and maintains an affidavit or other evidence, satisfactory to the
commissioner, concerning the purchaser's state of residence.
Sec. 3. Section 12-412c of the general statutes is repealed
and the following is substituted in lieu thereof:
(a) On [and] OR after July 1, 1986, the sale of a new mobile
manufactured home, AND ON OR AFTER JULY 1, 1993, THE SALE OF A
NEW MODULAR OR PREFABRICATED HOME, from a manufacturer shall be
subject to sales [tax] AND USE TAXES under this chapter, except
that for purposes of said [tax] TAXES the sales price of such new
mobile manufactured home OR NEW MODULAR OR PREFABRICATED HOME
shall be deemed to be seventy per cent of the manufacturer's
sales price applicable with respect to such sale. For the purpose
of this subsection, "mobile manufactured home" means a home at
least twelve feet in width, which cannot proceed under its own
power, which is towed or placed on flatbed trucks to be taken to
its destination and which requires a limited duration oversize
load permit in order to be transported on the highways of this
state, AND A "NEW MODULAR OR PREFABRICATED HOME" MEANS A MODULAR
OR PREFABRICATED HOME, AS DEFINED IN SECTION 21-85 WHICH HAS NOT
BEEN PREVIOUSLY SOLD OR OCCUPIED AS A DWELLING UNIT.
(b) On [and] OR after July 1, 1986, the resale of any mobile
manufactured home located in a mobile manufactured home park
licensed pursuant to chapter 412 or located on a single-family
lot as a permitted nonconforming use or as otherwise permitted by
the zoning regulations of the municipality in which the home is
located, AND ON OR AFTER JULY 1, 1993, THE RESALE OF ANY MODULAR
HOME, shall be exempt from the sales [tax] AND USE TAXES imposed
by this chapter and shall be taxed as a conveyance of realty in
accordance with the provisions of chapter 223.
Sec. 4. Subsection (2) of section 12-408 of the general
statutes is repealed and the following is substituted in lieu
thereof:
(2) Reimbursement for the tax hereby imposed shall be
collected by the retailer from the consumer and such tax
reimbursement, termed "tax" in this and the following
subsections, shall be paid by the consumer to the retailer and
each retailer shall collect from the consumer the full amount of
the tax imposed by this chapter or an amount equal as nearly as
possible or practicable to the average equivalent thereof. Such
tax shall be a debt from the consumer to the retailer, when so
added to the original sales price, and shall be recoverable at
law in the same manner as other debts except as provided in
section 12-432a. THE AMOUNT OF TAX REIMBURSEMENT, WHEN SO
COLLECTED, SHALL BE DEEMED TO BE A SPECIAL FUND IN TRUST FOR THE
STATE OF CONNECTICUT. Whenever such tax, payable by the consumer
(A) with respect to a charge account or credit sale occurring on
or after July 1, 1984, is remitted by the retailer to the
commissioner and such sale as an account receivable is determined
to be worthless and is actually written off as uncollectible for
federal income tax purposes or (B) to a retailer who computes
taxable income, for purposes of taxation under the Internal
Revenue Code of 1986, or any subsequent corresponding internal
revenue code of the United States, as from time to time amended,
on the cash basis method of accounting with respect to a sale
occurring on or after July 1, 1989, is remitted by the retailer
to the commissioner and such sale as an account receivable is
determined to be worthless, the amount of such tax remitted may
be credited against the tax due on the sales tax return filed by
the retailer for the monthly or quarterly period, whichever is
applicable, next following the period in which such amount is
actually so written off, but in no event shall such credit be
allowed later than three years following the date such tax is
remitted. The commissioner shall, by regulations adopted in
accordance with chapter 54, provide standards for proving any
such claim for credit. If any account with respect to which such
credit is allowed is thereafter collected by the retailer in
whole or in part, the amount so collected shall be included in
the sales tax return covering the period in which such collection
occurs. The tax applicable in any such case shall be determined
in accordance with the rate of sales tax in effect at the time of
the original sale.
Sec. 5. Subsection (4) of section 12-411 of the general
statutes is repealed and the following is substituted in lieu
thereof:
(4) The tax required to be collected by the retailer
constitutes a debt owed [by] TO the retailer [to this state] BY
THE PERSON PURCHASING TANGIBLE PERSONAL PROPERTY OR SERVICES FROM
SUCH RETAILER. THE AMOUNT OF TAX, WHEN SO COLLECTED, SHALL BE
DEEMED TO BE A SPECIAL FUND IN TRUST FOR THE STATE OF
CONNECTICUT.
Sec. 6. This act shall take effect from its passage and
sections 1 to 3, inclusive, shall be applicable to sales
occurring on and after July 1, 1993.
FIN COMMITTEE VOTE: YEA 27 NAY 10 JFS