Connecticut Administrative Code › Title 12 - Taxation › 410(5) - Enumerated Services › Section 12-410(5)-1 - Resale of services

Current through July 10, 2024
(a)
When a
			 resale certificate may be used
.
(1) As
			 used in this section, a "primary service provider" means a service provider
			 that purchases a service from a secondary service provider in order to render
			 its own taxable service to either another service provider or to an ultimate
			 consumer. A "secondary service provider" means a service provider that renders
			 the service being purchased by a primary service provider.
(2) A primary service provider may issue a
			 resale certificate to a secondary service provider for the purchase of a
			 service described in section
			 12-407(2)(i)
			 of the general statutes from the secondary service provider if the primary
			 service provider intends to transfer the service as an integral, inseparable
			 component part of a service described in said section
			 12-407(2)(i)
			 which is to be subsequently sold by the primary service provider either to
			 another service provider or to an ultimate consumer. A resale certificate may
			 be used in such circumstances even if the ultimate consumer is an entity whose
			 purchases are exempt from sales and use taxes or if the benefit of the services
			 rendered to the ultimate consumer will be realized outside Connecticut. A
			 service shall be considered an integral, inseparable component part of a
			 service described in said section
			 12-407(2)(i)
			 if the service purchased by a primary service provider from a secondary service
			 provider is essential to complete the performance of the primary service
			 provider's service and without which such provider's service could not be
			 rendered.
Example 1
: C brings his motor vehicle to D, a
				motor vehicle repair shop, for repairs to the vehicle's air conditioner. D
				sends the automobile to E, an automotive air conditioner specialist. D may
				purchase the repair services of E on a resale basis because D will resell the
				repair services to C.
Example 2
: F, a property management company
				providing taxable services to industrial, commercial or income-producing real
				property, contracts with G, a protective services company, for watchman
				services to guard the property that F manages. F may purchase the protective
				services from G on a resale basis because such services are an integral,
				inseparable component part of the property management services that F provides
				to ultimate consumers.
Example 3
: H, a property management company
				providing taxable services to industrial, commercial or income-producing real
				property contracts with J, a retailer of janitorial services. In order to
				render its services to H, J obtains janitorial employees from K, a temporary
				personnel agency. H may purchase the janitorial services of J on a resale
				basis; in addition, J may purchase the personnel services of K on a resale
				basis as long as the personnel will be used solely to fulfill J's obligations
				under its contract with H.
(3) When a service of a secondary service
			 provider is purchased on a resale basis by a primary service provider,
			 collection of tax is not required until the ultimate consumer is charged by the
			 primary service provider. The primary service provider may issue a resale
			 certificate to the secondary service provider in lieu of paying the tax at that
			 time, in which case the primary service provider shall maintain records that
			 substantiate (A) from whom the service was purchased and to whom the service
			 was sold, (B) the purchase price of the service and (C) the nature of the
			 service, to demonstrate that the services purchased from the secondary service
			 provider were an integral, inseparable component part of a service described in
			 section
			 12-407(2)(i)
			 of the general statutes which was subsequently sold by the primary service
			 provider to an ultimate consumer. The primary service provider need not
			 separately state the charge by the secondary service provider to the primary
			 service provider for the services rendered by the secondary service provider on
			 the bill to the ultimate consumer.
A secondary service provider may accept a resale certificate
				only if it is taken in good faith from the primary service provider. Such
				certificate shall be deemed to be taken in good faith if the service purchased
				is one that the secondary service provider could reasonably assume would be
				resold without change by the primary service provider or would be resold by the
				primary service provider as an integral, inseparable component part of a
				service also enumerated in section
				12-407(2)(i)
				of the general statutes.