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Connecticut Public Acts 1996

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Substitute Senate Bill No. 629

PUBLIC ACT NO. 96-232

AN ACT CONCERNING THE RATE OF THE SALES AND USE TAX ON REPAIR AND MAINTENANCE SERVICES ON VESSELS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (1) of section 12-408 of the general statutes, as amended by section 39 of public act 95-160, is repealed and the following is substituted in lieu thereof:

(1) For the privilege of making any sales as defined in subsection (2) of section 12-407, at retail, in this state for a consideration, a tax is hereby imposed on all retailers at the rate of six per cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail or from the rendering of any services constituting a sale in accordance with subsection (2) of section 12-407 except, in lieu of said rate of six per cent, (A) at a rate of five and one-half per cent of the gross receipts of any retailer from the sale of any repair or replacement parts exclusively for use in machinery, as defined in subsection (34) of section 12-412, used directly in a manufacturing or agricultural production process, (B) at a rate of twelve per cent with respect to each transfer of occupancy, from the total amount of rent received for such occupancy of any room or rooms in a hotel or lodging house for the first period not exceeding thirty consecutive calendar days, (C) at a rate of four and one-half per cent of the gross receipts of any retailer from the sale of any motor vehicle to any person who is a member of the armed forces of the United States and is on full-time active duty in Connecticut but whose permanent residence is in another state, (D) with respect to the sales of vessels to any resident of another state, at a rate which is the lesser of: (i) Six per cent of the gross receipts of any retailer from such sales or (ii) the percentage of such gross receipts that is payable as a sales tax by retailers engaged in business in the purchaser's state of residence, provided such retailer requires and maintains an affidavit or other evidence, satisfactory to the commissioner, concerning the purchaser's state of residence [and] (E) with respect to the sales of computer and data processing services occurring on or after July 1, 1997, and prior to July 1, 1998, at the rate of five per cent, on or after July 1, 1998, and prior to July 1, 1999, at the rate of four per cent, on or after July 1, 1999, and prior to July 1, 2000, at the rate of three per cent, on or after July 1, 2000, and prior to July 1, 2001, at the rate of two per cent, on and after July 1, 2001, and prior to July 1, 2002, at the rate of one per cent and on and after July 1, 2002, such services shall be exempt from such tax AND (F) WITH RESPECT TO THE SALES OF REPAIR OR MAINTENANCE SERVICES ON VESSELS AS DEFINED IN SECTION 15-127, AS AMENDED, OCCURRING ON OR AFTER JULY 1, 1997, AND PRIOR TO JULY 1, 1998, AT THE RATE OF FOUR PER CENT, ON OR AFTER JULY 1, 1998, AND PRIOR TO JULY 1, 1999, AT THE RATE OF TWO PER CENT AND ON AND AFTER JULY 1, 1999, SUCH SERVICES SHALL BE EXEMPT FROM SUCH TAX. The rate of tax imposed by this chapter shall be applicable to all retail sales upon the effective date of such rate, except that a new rate which represents an increase in the rate applicable to the sale shall not apply to any sales transaction wherein a binding sales contract without an escalator clause has been entered into prior to the effective date of the new rate and delivery is made within ninety days after the effective date of the new rate. For the purposes of payment of the tax imposed under this section, any retailer of services taxable under subdivision (i) of subsection (2) of section 12-407 who computes taxable income, for purposes of taxation under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, on an accounting basis which recognizes only cash or other valuable consideration actually received as income and who is liable for such tax only due to the rendering of such services may make payments related to such tax for the period during which such income is received, without penalty or interest, without regard to when such service is rendered.

Sec. 2. Subdivision (1) of section 12-411 of the general statutes is repealed and the following is substituted in lieu thereof:

(1) An excise tax is hereby imposed on the storage, acceptance, consumption or any other use in this state of tangible personal property purchased from any retailer for storage, acceptance, consumption or any other use in this state, the acceptance or receipt of any services constituting a sale in accordance with subdivisions (i) to (l), inclusive, of subsection (2) of section 12-407, or, the storage, acceptance, consumption or any other use in this state of tangible personal property which has been manufactured, fabricated, assembled or processed from materials by a person, either within or without this state, for storage, acceptance, consumption or any other use by such person in this state, to be measured by the sales price of materials, at the rate of six per cent of the sales price of the property or the consideration paid for any such services, except, in lieu of said rate of six per cent, (A) at a rate of five and one-half per cent of the sales price of any repair or replacement parts exclusively for use in machinery, as defined in subsection (34) of section 12-412, used directly in a manufacturing or agricultural production process, (B) at a rate of four and one-half per cent of the sales price of any motor vehicle sold to any person who is a member of the armed forces of the United States and is on full-time active duty in Connecticut but whose permanent residence is in another state, (C) at a rate of twelve per cent of the rent paid for occupancy of any room or rooms in a hotel or lodging house for the first period of not exceeding thirty consecutive calendar days, [and] (D) with respect to the storage, acceptance, consumption or use in this state of vessels purchased from any retailer for storage, acceptance, consumption or any other use in this state by any resident of another state, at a rate which is the lesser of: (i) Six per cent of the sales price thereof or (ii) the percentage of such sales price that is payable as a use tax by purchasers making purchases in the purchaser's state of residence, provided the retailer requires and maintains an affidavit or other evidence, satisfactory to the commissioner, concerning the purchaser's state of residence AND (E) WITH RESPECT TO THE SALES OF REPAIR OR MAINTENANCE SERVICES ON VESSELS AS DEFINED IN SECTION 15-127, AS AMENDED, OCCURRING ON OR AFTER JULY 1, 1997, AND PRIOR TO JULY 1, 1998, AT THE RATE OF FOUR PER CENT, ON OR AFTER JULY 1, 1998, AND PRIOR TO JULY 1, 1999, AT THE RATE OF TWO PER CENT AND ON AND AFTER JULY 1, 1999, SUCH SERVICES SHALL BE EXEMPT FROM SUCH TAX.

Sec. 3. This act shall take effect from its passage and shall be applicable to sales occurring on or after July 1, 1997.

Approved June 6, 1996. Effective June 6, 1996, and applicable as provided in section 3.

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