Tax on Home Service and Repair Contracts in Connecticut

Jan 25th, 2017

The Connecticut Department of Revenue ruled on how to tax warranty contracts on real property.

Connecticut taxes services to industrial, commercial, or income-producing property. These include services to residential property rented to a tenant. Repair services to tangible personal property are also taxable. Services to residential real property occupied by its owner, however, are generally not taxable.

As a result, warranty contracts for income-producing property are taxable. Home warranty contracts for owner-occupied properties are not taxable. If a contract includes taxable services to tangible personal property, the seller can separately state and collect tax on charges for those services.