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Ruling 89-191


This Ruling has been obsoleted by AN 94(3)

You have inquired as to whether the services rendered by X Company are subject to the sales and use tax under Conn. Gen. Stat. §12-407(2)(i)(F), as amended by Public Act No. 89-251.

To summarize your letter, X Company designs stand-by electrical generating systems that produce electrical power in the event there is a power failure. The telephone company installs X Company's systems in buildings that house telephone switching systems. X Company's systems are typically placed into existing buildings, although a new building is involved in some cases. The major portion of X Company's work involves the production of plans and specifications for the stand-by generating system itself. A minor portion of the work involves plans for physical modification of the building into which the unit will be placed.

It is our opinion that all of the work performed by X Company with respect to the design of the generator system itself is not subject to the sales tax, because the work relates to the design of a piece of equipment and not to a building. However, that portion of the engineering services that involve the design of the building into which the generating equipment is placed would be subject to tax. Such services should be separately stated on X Company's bills to its clients.


November 6, 1989