DRS: Ruling 2014-1, Sales & Use Tax, Propane Used in Home Generators

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

.pdf version

RULING NO. 2014-1

 

SALES AND USE TAXES

UTILITY EXEMPTION (GENERAL)

PROPANE USED IN HOME GENERATORS


FACTS:

 

A homeowner is purchasing a standby generator for his home, which he plans to fuel with propane from a tank to be installed on his property that will only supply the generator. 

 

ISSUES:

 

Whether the sale of propane gas to be used to operate a standby generator at a residential dwelling is subject to sales and use taxes.

 

RULINGS:

 

The sale of propane gas to be used to operate a generator at a residential dwelling is exempt from sales and use taxes.

 

DISCUSSION:

 

Sales of tangible personal property, including sales of propane gas, are generally subject to Connecticut Sales and Use Taxes.  See Conn. Gen. Stat. 12-407.  However, sales of propane gas for use in any residential dwelling are exempted by the provisions of Conn. Gen. Stat. 12-412(3)(A), which states in relevant part as follows:

 

The sale, furnishing or service of gas, including bottled gas, and electricity when delivered to consumers through mains, lines, pipes or bottles for use (i) in any residential dwelling . . . . Bottled gas as used in this subsection means L.P. (propane) gas.
 
See also Policy Statement 94(3.2), Gas and Electricity Purchased for Residential Use or for Use in Agricultural Production, in the Fabrication of Finished Products to Be Sold, or in an Industrial Manufacturing Plant. 

Unlike the exemption for fuel used for heating purposes, which is set forth in Conn. Gen. Stat. 12-412(16), the exemption for gas in Conn. Gen. Stat. 12-412(3)(A) does not specify that the gas must be used for a specific purpose at a residential dwelling in order to be eligible for exemption.  Thus, gas sold for use at a residential dwelling may be purchased exempt from sales and use tax, regardless of its use.
 
OFFICE OF COUNSEL
                                                                              December 18, 2014