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PS 94(6)

Refuse Removal Companies

This publication has been superseded by PS 99(5)

PURPOSE: This Policy Statement announces a clarification of the policy of the Department with regard to the imposition of sales and use taxes on purchases and sales by refuse removal companies.

EFFECTIVE DATE: Effective for sales occurring on and after the date of issuance of this Policy Statement.

BACKGROUND: In the past, refuse removal companies have been permitted to exclude from their charges separately stated dump fees that had been paid by them, even if the refuse removal services with respect to which the dump fees were paid were related to existing commercial, industrial or income-producing real property. A letter was issued by the Department in January of 1990 that limited the exclusion for dump fees to instances when the refuse removal company was able to specifically identify the customer to whom the dump fee pertained, but this letter was not disseminated by the Department to all refuse removal companies.

STATUTORY AUTHORITY: Conn. Gen. Stat. § 12-407(2)(i)(I); Conn. Agencies Regs. § 12-407(2)(i)(I)-1.

TAXABILITY OF CHARGES OF REFUSE REMOVAL COMPANIES: Refuse removal services, including carting, hauling and disposal, are taxable under Conn. Gen. Stat. § 12-407(2)(i)(I) as services to existing industrial, commercial or income-producing real property (see also Conn. Agencies Regs. § 12-407(2)(i)(I)-1(g)). Therefore, refuse removal services rendered to residential real property or in connection with the construction of new industrial, commercial or income-producing real property are not taxable.

Dump fees, whether charged by a municipal or privately-owned dump and whether charged to refuse removal companies or to property owners who bring their own trash to the dump, are not subject to tax.

However, when such fees are passed on to customers of refuse removal companies, dump fees may not be excluded from charges for taxable refuse removal services, because such fees are part of the cost of doing business of the refuse removal company.

Where a privately-owned dump and a refuse removal business are operated by the same company, its charges for accepting refuse at its dump from persons who are not customers of its refuse removal services are not taxable. However, if such a company includes its own dump fees in the charges for its refuse removal services, such fees must be included in the measure of tax for its refuse removal services.

Refuse removal services rendered to condominium complexes that are not entirely owner-occupied are taxable in the same proportion that the number of non-owner occupied units bears to the number of owner occupied units (see Conn. Agencies Regs. § 12-407(2)(i)(I)-1(f)). The percentage of non-owner occupied units is established by using CERT-103.

Because services rendered in the voluntary evaluation, prevention, treatment, containment or removal of hazardous waste or other contaminants of air, water or soil are excluded from tax under Conn. Gen. Stat. § 12-407(2)(i)(I) as amended by 1994 Conn. Pub. Acts 4, § 13 (May Spec. Sess.), charges for refuse removal services rendered in connection with such activities are not taxable.

"Hazardous waste" is defined in Conn. Gen. Stat. § 22a-115 as:

Any waste material, except by-product material, source material or special nuclear material, as defined in section 22a-151, which may pose a present or potential hazard to human health or the environment when improperly disposed of, treated, stored, transported, or otherwise managed, including (A) hazardous waste identified in accordance with Section 3001 of the federal Resource Conservation and Recovery Act of 1976 (42 USC 6901 et seq.), (B) hazardous waste identified by regulation by the department of environmental protection and (C) polychlorinated biphenyls in concentrations greater than fifty parts per million.

TAXABILITY OF CHARGES FOR PROPERTY PROVIDED BY REFUSE REMOVAL COMPANIES: The primary purpose of refuse removal companies in purchasing dumpsters or other containers is to use them in rendering their services. Because refuse removal companies are not in the business of reselling dumpsters or other refuse containers, they must pay tax on their purchases of such containers. Fees designated by a refuse removal company as being for dumpsters or other containers it provides to customers are taxable as being for refuse removal services.

However, because compactor units generally require permanent installation at a customer's premises, charges for such units by a refuse removal company are taxable as the leasing or rental of tangible personal property under Conn. Gen. Stat. § 12-407(2)(j), and the refuse removal company may purchase the units without tax on a resale basis.

REFUSE REMOVAL SERVICES PERFORMED FOR CONTRACTORS WORKING ON EXEMPT PROJECTS: Refuse removal services performed for contractors working on projects for exempt organizations or governmental entities may be purchased on a resale basis as provided in Conn. Agencies Regs. § 12-426-18(b), which permits such contractors to make tax-free purchases of services "to be physically incorporated in and become a permanent part of the projects being performed" under the exempt contract. The tax on the resale of such services then is extinguished because of the exemptions for exempt organizations or governmental entities provided under Conn. Gen. Stat. § 12-412.

EFFECT ON OTHER DOCUMENTS: The second paragraph of Ruling No. 90-37 is superseded by this Policy Statement. In addition, any correspondence from the Department that conflicts with this Policy Statement may no longer be relied upon for sales occurring on or after the effective date of this Policy Statement.

EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. Unlike a Letter Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts but it may be referred to for general guidance by taxpayers. Unlike a Special Notice, it does not announce a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions. 

PS 94(6)
Sales and use taxes
Issued: 11/29/94