Connecticut State Department of Revenue Services

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Ruling 90-70

Leasing Tangible Personal Property

ISSUE:

Whether companies in the business of leasing tangible personal property can exclude insurance charges from their gross receipts when charging sales tax.

RULING:

Section 12-426-25(c) of the Regulations of Connecticut State Agencies states, "Gross receipts shall not include the cost of gasoline or insurance charges when such amounts are separately stated and the lessee has the option to either accept the lessor's insurance offer or to procure other coverage."

In order to exclude insurance charges from their gross receipts, companies in the business of leasing tangible personal property must follow the requirements set forth in Regulations Section 12-426-25(c) by separately stating the insurance charges.

LEGAL DIVISION

December 20, 1990