Ruling 89-208
Landscaping
This Ruling has been obsoleted by AN 94(4)
The following represents general guidance with respect to the taxability of the services described herein.
Case #1.
The business is a sole proprietorship servicing new homeowners. The business consists of a service whereby the owner will clear a wooded lot prior to the building of a residence. There are situations when the owner will clear the lot directly for a single owner or clear a tract of land for a contractor which will ultimately become building sites for residential homes. Landclearing involves cutting down trees and underbrush and removing same so that the building contractor can construct new homes that will be sold to individuals. There is no activity involving anything commercial.
Where the services provided by a sole proprietorship consist solely of clearing wooded lots to enable the new construction of residential homes, such service is considered to be part of the new construction.
Section 12-426-26c of the Regulations of Connecticut State Agencies states that services rendered in the construction of new property are not subject to sales tax. Therefore, based on the facts you presented, the services of this sole proprietorship will not be subject to tax.
Case #2.
The business is a sole proprietorship. The activity is excavation. The owner does sewer excavation (laterals) septic systems, grading and general excavation. He services homeowners and does some work for a contractor, sometimes on commercial property (new or existing) sewer hookups, sewer repairs and in some cases, foundation backfill.
The service of excavation is a taxable service when rendered to industrial, commercial and income-producing property. However, such service, when performed in the new construction of real property, whether commercial or residential is not subject to tax pursuant to section 12-426-26c of the Regulations of Connecticut State Agencies. If, however, renovations are being performed on commercial, industrial or income-producing property that requires reconstruction or alterations to the existing septic system, such services will be taxable.
LEGAL DIVISION
November 13, 1989