Will I have to pay "Sales Tax" on my driveway project??

Like most things when dealing with the State on Connecticut it is not a simply  "Yes" or "No" answer.

This is from the Building Contractors' Guide to Sales and Use Tax

Paving(See also Maintenance Services to Real Property)

Paving involves covering the ground with a hard smooth surface such as:

  •   asphalt macadam
  •   poured concrete tar

Paving includes the replacement of sections or the complete repaving of

  •  basketball courts tennis courts
  • driveways walks
  • parking areas

Paving does not include covering driveways, parking areas, and walks with materials such as crushed stone, crushed stone with oil, or gravel. However, these services are taxable when rendered to existing commercial, industrial, and income-producing property.

Paving services do include all preparatory work, where performed as part of the entire job, as well as the subsequent sealing or dressing of the pavement.

Initial Installation

Materials: The paving contractor pays tax on all purchases of materials including:

  • asphalt macadam
  • concrete tar

Labor: The contractor does not charge tax when a driveway, parking lot, or walk is paved for the first time. Therefore, if the contractor is putting in a driveway, parking lot, or walkway at a new construction site or paving for the first time an existing driveway, parking lot, or walkway originally constructed of dirt, loose stone, or gravel, the labor is not subject to tax on:

  •  New construction
  •  Owner-occupied residential property
  •  Existing commercial property
  •  Existing industrial property
  •  Existing income-producing property

Repair or Replacement (of an existing paved driveway, parking lot, or walkway)

Materials: The paving contractor pays tax on all materials purchased to repair or replace an existing paved driveway, parking lot, walkway, basketball court, or tennis court.

Labor: The contractor must charge tax on the labor to repair or replace existing pavement on:

  •  New construction of commercial, industrial, and
  •  Income-producing real property
  • Existing commercial property
  • Existing industrial property
  • Existing income-producing property

The contractor does not charge tax on the labor to repair or replace existing pavement on:

  • Owner-occupied residential property.

If you have any other question please feel free to call on our professional staff.