Sales Tax State Activity Update - July 2005

Lessors Get Relief in Connecticut

Effective July 1, 2005, a one-and-a-half percent surcharge will be imposed on the rental of machinery in the state by a rental company to a lessee if the rental period is less than 31 days. The surcharge is imposed on the total amount the rental company charges the lessee for the rental of the machinery. The surcharge is in addition to any tax applicable to such transaction and is included in the measure of taxable receipts.

Under this act, machinery is defined as heavy equipment without an operator that may be used for construction, mining, or forestry, including but not limited to bulldozers, earthmoving equipment, well-drilling machinery and equipment or cranes.

The surcharge is a reimbursement for rental companies paying Connecticut property taxes and Department of Motor Vehicle registration and titling fees. Any excess surcharge amounts collected over these costs will be remitted to the Commissioner of Revenue Services by February 15 of each year.

The full text can be accessed here.

(Connecticut Public Act 05-163(S.B. 1230), effective July 1, 2005) 07/05

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