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This Ruling has been obsoleted by AN 94(4)

Ruling 89-209


Company X provides management services to partnerships that own housing projects in Connecticut. Such services are taxable pursuant to section 12-407(2(i)(I) of the Connecticut General Statutes. It is your position that Company X should be relieved of having to collect the sales tax on its services to the owners-partnerships pursuant to section 12-412(29) of the Connecticut General Statutes and section 12-426-26(f) and (h) of the Regulations of Connecticut State Agencies. These provisions, however, do not exempt the partnerships from having to pay the tax nor Company X from having to collect and remit such tax.

Section 12-412(29) of the Connecticut General Statutes does not apply in determining whether Company X's services are exempted from the sales tax. That exemption relates specifically to tangible personal property purchased for use in the operation of a low-income housing facility by a nonprofit housing organization. The partnerships are purchasing services rather than tangible personal property from Company X. Additionally, the partnerships, absent evidence of their nonprofit and section 501(c)(3) status, do not qualify as a nonprofit housing organization.

Regulations describing exceptions to the tax on services to income producing property does not provide relief to Company X. Evidence that the partnerships meet the requirements in section 12-426-26(f)(1) and (2) of the Regulations of Connecticut State Agencies has not been presented and with respect to section 12-426-26(h) of the Regulations of Connecticut State Agencies, the services provided by Company X are to the owners-partnerships, not the State of Connecticut.

For the aforementioned reasons, Company X will not be relieved of collecting and remitting the tax on its management services.


November 14, 1989