Conn. Agencies Regs. § 12-426-25 - Leasing and rental of tangible personal property
(a)
General rule. The rental or leasing of tangible personal property
for a consideration in this state is a sale and is subject to the tax. The
lessor is a retailer who must register with the Commissioner of Revenue
Services for a permit and collect the tax. The tax is imposed upon the gross
receipts from the rental or leasing of tangible personal property. Such
retailers shall pay the taxes so collected in the manner and form as other
retailers licensed to sell tangible personal property. A lessee may issue a
resale certificate to a lessor only in those cases where the lessee has
qualified with this department as a lessor and the property is being leased
solely for sub-leasing purposes.
(b)
Transitional rules. The tax
applies to all leases of tangible personal property existing on July 1, 1975.
No credit against the tax is given for any sales or use tax paid by the lessor
on such property purchased prior to July 1, 1975. The tax is imposed on the
total amount of rental payments received on or after July 1, 1975. The rental
is deemed received when it is due and owing. The lessor must collect and pay
the tax on the total amount of payment or periodic payments received for
leasing or rental of tangible personal property for any term on or after July
1, 1975 whether or not such amount is prepaid and received prior to said
date.
(c) "Gross receipts" shall
include the total amount of payment, royalties or periodic payments received
for the leasing or rental of tangible personal property. Said amount shall
include all charges including but not limited to maintenance and service
contracts, cancellation charges, installation service and transportation
charges for delivery to the lessee, whether or not such amounts are separately
stated. 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.
(d) Gross receipts do not
include the amount charged for the operator where the lessor supplies an
operator for the leased property if the amount charged is for the compensation
of the operator, is reasonable and is segregated in the invoice. A reasonable
charge is one based upon the prevailing rate in the area. However, where an
operator is supplied with the equipment, the contract is entered into for a
specific job or operation, and where the owner of the equipment through the
operator retains complete control over the equipment and retains discretion as
to when and how to perform, said contract will be one for services and not for
lease.
(e) Tangible personal
property purchased exclusively for lease or rental is purchased for resale and
a resale certificate may be issued therefor. Said certificate may be issued in
the purchase of parts and accessories used directly in the rental or leasing or
used in the reair of the leased property. Where the property is purchased in
part for lease and in part for the use of the lessor, it may not be purchased
on a resale certificate and the vendor must collect the tax on the purchase
price. The tax must also be collected on any subsequent lease of the
property.
(f) The rental of safe
deposit boxes, food lockers, storage or baggage lockers are not rental of
personalty but rental of storage space and not subject to tax. Charges for
chartering of buses, boats, airplanes and limousines are not subject to tax,
where the owner maintains complete control over the conveyance.
(g) Rental of equipment to contractors
engaged in work on exempt projects is subject to the tax.
(h) A lease is considered to be consummated
in this state and subject to the tax where delivery of the tangible personal
property is taken within the state or the property is leased with the intent to
use it in the State of Connecticut and the property is so used. The tax does
not apply where delivery is taken outside the state and the property is used
exclusively outside the State of Connecticut.
Notes
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