Connecticut State Department of Revenue Services

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Ruling 90-62

Manufacturing / Accessory Tools

It is the Department's position that tools which come into direct contact with and are used in the fabrication of finished products to be sold are used directly in actual fabrication. Accordingly, "accessory tools" and "production machine tool holders" are exempt from sales tax under Section 12-412(18) of the Connecticut General Statutes. The Department considers tool holders to be accessory tools and, therefore, not subject to sales tax.

However, with respect to the sale of parts of such production machine tool holders, the Department does not consider such parts to be repair or replacement parts exclusively for use in production machinery. Therefore, such parts do not qualify for the reduced rate of 5.5% and must be taxed at the full 8% rate.

The Department treats the following items as machinery parts, not as tools or tool holders: turret tool adapters, split bushing adapters, spindle brakes, feeding fingers, stock stops and feed tube bushings. Thus, these items are purchased as repair or replacement parts and are taxable at the 5.5% rate. However, if they are purchased as a component part for the construction of a machine, they are taxed at the full 8% rate.

It is also a longstanding position of the Department that collects are not subject to the sales tax because they perform the same function as a chuck. Chucks are listed as an exempt accessory tool under Section 12-426-11b(a)(13) of the Regulations of Connecticut State Agencies.

The Department does not consider cam templates to be a tool used directly in the actual fabrication of a product to be sold. Therefore, they are subject to tax at the full 8% rate.

On the subject of "measuring" tools, it is the Department's position that tools, such as hand micrometers, are exempt when used directly in the actual fabrication of the product within the manufacturing production process. When used as inspection devices after the fabrication of the product, such items are taxable at the full 8% rate.

James F. Meehan
Commissioner

September 14, 1990