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This Ruling has been superseded by PS 94(3)

Ruling 90-1

Utility Exemption - Manufacturing

The issue presented to us is whether take-out pizza and pizza delivery businesses qualify for the exemption from the sales tax on the purchase of electricity pursuant to Conn. Gen. Stat. §12-412(3), as amended by Public Act No. 89-251, on the grounds that they are manufacturers or fabricators of a finished product to be sold.

We believe that your reliance on the case of Ziperstein v. Tax Commissioner, 178 Conn. 493 (1979), as legal support for your position is misplaced in view of the fact that the case was decided under regulations which were subsequently repealed.

The current regulations pertinent to the issue (Conn. Agencies Regs. §12-426-11b) define the terms "manufacturing", "manufacturing production process" and "industrial plant." Thus, in order to gain an exemption from the sales tax on the purchase of electricity, the taxpayer must have manufacturing as its main purpose and be generally recognized as an industrial plant.

It is our opinion that the taxpayer does not meet this burden. Take-out pizza and pizza delivery establishments are in the business of preparing and furnishing meals for immediate consumption on a take-out basis. They are not considered to be manufacturers or fabricators, nor is their place of business considered to be an industrial plant. It should also be noted that such businesses are not permitted to buy their equipment on a manufacturer's exemption certificate.

For the above stated reasons, the Department hereby rules that take-out pizza and pizza delivery businesses do not qualify for an exemption from the sales tax on the purchase of electricity.


January 8, 1990