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Ruling 93-7, Sales and Use Taxes / Labor Rendered in Installing or Applying Tangible Personal Property

FACTS:

The Company sells mailboxes to residential customers. It offers its customers the option of having the mailboxes installed for an additional, separately stated fee. Installation involves the sinking of posts onto which the mailbox is then attached.

ISSUE:

Whether the Company's charges for labor rendered in installing tangible personal property are excluded from "gross receipts" and "sales price"--the measure of sales and use taxes--if the tangible personal property is installed into real property.

DISCUSSION:

Conn. Gen. Stat. § 12-407(8)(e) and (9)(e) exclude from the definitions of "sales price" and "gross receipts," respectively, charges for "labor rendered in installing ... the property sold, provided such charge is separately stated and exclusive of charges for any service rendered within the purview of [Conn. Gen. Stat. § 12-407(2)(i)(I)]."

"In construing a statute, no clause, sentence or word shall be treated as superfluous, void or insignificant unless there are compelling reasons why this principle cannot be followed." International Business Machines Corp. v. Brown, 167 Conn. 123, 134-135, 355 A.2d 236 (1974). "[Statutes should be construed so that no part of a legislative enactment is to be treated as insignificant and unnecessary, and there is a presumption of purpose behind every sentence, clause or phrase. State ex rel. Kennedy v. Frauwirth, 167 Conn. 165, 168, 355 A.2d 39; Charlton Press, Inc. v. Sullivan, 153 Conn. 103, 109, 214 A.2d 354." Doe v. Institute of Living, Inc., 175 Conn. 49, 58, 392 A.2d 491 (1978).

The services rendered in installing or applying tangible personal property may encompass services to real property; otherwise, the phrase "exclusive of charges for any service rendered within the purview of [Conn. Gen. Stat. § 12-407(2)(i)(I)]" is superfluous. It cannot be presumed that the General Assembly would enact pointless legislation.

RULING:

Charges for labor rendered in installing tangible personal property are included in "gross receipts" and "sales price"--the measure of sales and use taxes--if the tangible personal property is installed into industrial, commercial or income-producing real property, as defined in Conn. Agencies Regs. § 12-407(2)(i)(I)-1, and excluded from "gross receipts" and "sales price" if the tangible personal property is installed into real property other than industrial, commercial or income-producing real property.

LEGAL DIVISION

May 18, 1993