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  Sales and Use Tax
    Direct Payment Permit

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  What if a contractor performs a job for a direct payment permit holder?
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  Q. What if a contractor performs a job for a direct payment permit holder?
  Answer
 

A. General contractors that enter into renovation construction contracts with direct payment permit holders must purchase materials and supplies to be installed or permanently placed in the projects without payment of tax. Subcontractors working on renovation projects must purchase materials and supplies to be installed or permanently placed in the projects without payment of tax. The general contractor must get a copy of the taxpayer's Form AU-621, Direct Payment Permit, and attach it to CERT-133, Contractor's Exempt Purchase Certificate for a Renovation Contract with a direct payment permit holder, to purchase materials and supplies for a renovation project without paying sales tax. The general contractor must provide copies of the direct payment permit to all subcontractors involved in the renovation project. Form AU-621 and CERT-133 may not be used for new construction contracts.

Subcontractors should continue to sell taxable renovation labor on resale to the contractors to which they are subcontracted using the Sales & Use Tax Resale Certificate.

The direct payment permit holder must self-assess use tax on all materials and supplies installed or permanently placed in the renovation construction project and on the renovation labor for the project.

(Updated: 2015)

This answer is intended to provide general information concerning a frequently asked question about a current position, policy, or practice associated with the taxes administered by the Connecticut Department of Revenue Services.  It may include an informal interpretation of Connecticut tax law by the Department of Revenue Services (DRS).  However, it is not intended to serve as a legal ruling.

 
 
 
  
 
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