SN 2004(3)

2004 Legislative Changes Affecting Sales and Use Taxes

Effective January 1, 2002:

Coin and Currency Services: Sales of coin and currency services provided to a financial service company by or through another financial service company are excluded from taxable private investigation, protection, patrol work, watchman, and armored car services. For purposes of this exclusion, a financial service company has the same meaning as provided in Conn. Gen. Stat. §12-218b(a)(6)(A)-(H):

• Any corporation or other business entity registered under the laws of any state as a bank holding company or registered under the federal Bank Holding Company Act of 1956, as amended, or registered as a savings and loan holding company under the federal National Housing Act, as amended;
• A national bank organized and existing as a national bank association under the provisions of the National Bank Act, 12 USC Section 21 et seq.;
• A savings association or federal savings bank, as defined in the Federal Deposit Insurance Act, 12 USC 1813(b)(1);
• Any bank, banking association, trust company, savings and loan association, or thrift institution incorporated or organized under the laws of any state, or any other corporation or other business entity, the deposits or accounts of which are insured under the Federal Deposit Insurance Act or by the Federal Deposit Insurance Corporation;
• Any corporation organized under the provisions of 12 USC 611 to 631;
• Any foreign bank that has an agency or branch, as defined in 12 USC 3101;
• A credit union organized under the laws of any state the loan assets of which exceed fifty million dollars as of the first day of its income year; and
• A production credit association organized under the federal Farm Credit Act of 1933, all of whose stock held by the Federal Production Credit Corporation has been retired.

Policy Statement 98(5), Sales and Use Tax Refund Policy, provides guidance on requesting refunds. In brief, the Department of Revenue Services (DRS) will accept refund claims filed by retailers on behalf of their purchasers, when the retailers can prove that they have collected the tax from the purchasers and remitted it to DRS, and when the retailers refund the tax to their purchasers.

DRS will accept refund claims filed by purchasers:

• When purchasers have self-assessed use tax and have not paid sales tax to retailers; or
• When purchasers have paid sales tax to retailers, have receipts from the retailers showing the tax was paid, and submit copies of Form AU-524, Assignment of Retailer’s Rights for Refund, signed by retailers to which they paid tax, certifying that tax was collected from the purchasers and remitted to DRS, and that the retailers waive their right to claim refunds of the same amounts.

Clean Alternative Fuel Vehicles and Equipment: The exemptions for motor vehicles powered by clean alternative fuel, conversion equipment to convert vehicles to use clean alternative fuel, and equipment incorporated into or used in a compressed natural gas or hydrogen filling or electric recharging station remain in effect through July 1, 2008.

Sales to and by For-Profit Hospitals: An exemption is added for sales of tangible personal property and services to an acute care, for-profit hospital operating as such on July 1, 2004, for purposes of the hospital in connection with constructing and equipping any facility of the hospital for which a certificate of need was filed before and is pending on July 1, 2004.  This replaces the exemption added by 2003 Conn. Pub. Acts 6, §54 (June 30 Spec. Sess.) for sales of medical equipment and supplies for patient care to and by acute care for-profit hospitals, which was to have been effective for sales occurring on and after July 1, 2005.

Tax Collection Reporting: Certain retailers, as described below, making sales as defined in the Sales and Use Taxes Act, including but not limited to sales of tangible personal property, leases of tangible personal property, sales of taxable services, sales of meals, or transfers of room occupancy, are required to make an additional report annually to DRS. Those retailers:

• Have two or more places of business for which a Sales and Use Tax Permit (seller’s permit) is required and have been issued two or more seller’s permits; and
• Have places of business located in two or more Connecticut towns.

On the additional annual report, those retailers must provide a breakdown by Connecticut town of the sales tax they collected for each calendar quarter.

Example 2: A retailer has two places of business in Hartford and a place of business in Wethersfield, and has been issued a seller’s permit for all three locations. DRS has permitted this retailer to file one Form OS-114 covering all three locations for each taxable period. In its annual report, this retailer will report a breakdown by calendar quarter of the sales tax collected at its Wethersfield location and the total sales tax collected at its two Hartford locations.

The filing requirements for sales and use taxes returns remain unchanged.

, Sales and Use Taxes on Sales of Magazines and Newspapers, is obsoleted with respect to sales occurring on and after July 1, 2004.