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This Ruling has been obsoleted by AN 94(4)

Ruling 90-57



Which portion of the construction activities performed on a shopping mall which involves the addition of square footage above and below the mall's existing structure as well as the construction of new parking areas, roadways and walkways performed on the premises constitute new construction so that the services rendered are not subject to the sales and use tax pursuant to Section 12-407(2)(i)(I) of the Connecticut General Statutes and Section 12-426-26(c) of the Regulations of Connecticut State Agencies.


  1. The existing roof of the mall will be removed and additional square footage will be built in an area approximately nine feet upward from the original roof. A new roof will be constructed along with a new partial floor. Because of different roof elevations where the roof is being removed, approximately 75 percent of the new floor will be outside the existing building line and 25 percent will be within the existing building line.
  2. There will be total destruction of the existing ground floor. The ground below the original floor will be excavated and a new foundation will be constructed below the original floor resulting in the creation of additional square footage beneath the existing mall. The ground slab of the existing building is at an elevation of RL-17 and the new foundation will be at an elevation RL-13 as set forth on the blueprints.
  3. Existing parking lots, roadways and walkways in certain areas adjacent to the mall will be totally demolished. The ground beneath these existing parking lots, roadways and walkways will be excavated to the new lower level of the mall. New parking lots, roadways and walkways will be constructed.


As a general principle, the addition of new square footage outside the existing shell of an existing building constitutes new construction.

  1. The construction work performed in the approximate nine foot area above the existing roof is considered to be new construction. The service charges for the construction performed within that area and the installation of the new roof are not taxable. The construction costs of the new partial floor can be allocated according to the construction performed within and without the existing building line so that the construction costs can be allocated between new construction (75 percent) and renovations (25 percent).
  2. The construction work performed below the original ground slab is considered to be new construction. In order to allocate costs between new construction and renovation, reference to the elevation levels as shown on the blueprints is appropriate under these circumstances. All construction above the elevation of RL-17, which marked the original ground slab, is deemed to be renovation because it occurs within an existing building. All construction at RL-17 and below will be deemed new construction.
  3. The construction of new parking lots, roadways and walkways is considered to be new construction and is not taxable. Excavation services to the real estate performed as part of this construction are not subject to sales and use tax. Labor charges for the total demolition and destruction of parking lots, roadways and walkways are not taxable provided the demolition and destruction is part of the construction contract for the building of new parking lots, roadways and walkways.


July 23, 1990