Connecticut Changes Sales Tax Exemption for Some Environmental Work

In 1991, the CT Department of Revenue Services (CT DRS) incorporated a ruling that provided architectural and engineering services with an exemption from the 1989 Sales & Use Tax law. In June 2011, the CT DRS sent a letter to many environmental professionals regarding a sales tax increase and the removal of exemption under Sec. 88 of Public Act 11-6, “Containment or removal of hazardous waste or other contaminants."

In that letter, the CT DRS states:  "Effective July 1, 2011, the exclusion from sales tax for services rendered in the voluntary evaluation, prevention, treatment, containment or removal of hazardous waste or other contaminants of air, water or soil is repealed.  Therefore, as of that date, these services when rendered in connection with industrial, commercial or income producing real property are subject to sales and use tax."  The letter also states: “Effective July 1, 2011, the general sales and use tax rate increases from 6% to 6.35%.

Copy of the CT DRS letter:   http://www.epoc.org/Resources/Documents/DRSLetter6-21-11.pdf

ACEC/CT has taken the position that although the exemption for “…services rendered in the voluntary evaluation, prevention, treatment, containment or removal of hazardous waste…” has been removed from the 1991 DRS ruling, the language exempting “architectural and building engineering services” from Sales & Use Tax is still in effect. 

Both ACEC/CT and Environmental Professionals' Organization of Connecticut (EPOC)have requested clarification from the CT DRS. We will post any further information, but meanwhile we suggest you contact your tax professional for guidance.

With Thanks to ACEC/CT for this information.