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Q:

WHY IS COMMERCIAL HEATING OIL SUBJECT TO STATE SALES TAX?

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Sale of heating fuel is currently exempt from the sales tax only if it is used in a residential dwelling or if at least 75% of the fuel for any building, location, or premise is used directly (1) in agricultural production, (2) for fabricating finished products for sale, or (3) in an industrial manufacturing plant (CGS 12-412 (16)). Thus, sale of any other heating oil for commercial purposes is subject to sales tax. The General Assembly first enacted the state sales tax in 1947. The original sales tax law exempted sales of fuel used exclusively for domestic purposes from the tax. Thus, the original 1947 sales tax applied to sales of fuel for commercial and industrial purposes ( 334i (p), 1947 Supplement to the Connecticut General Statutes). In 1971, the General Assembly specified that sale of gas and electricity, as well as fuel, for domestic purposes was tax-exempt (PA 8, June 1971 Special Session, 7). In 1974, the General Assembly limited the exemption to heating fuel but expanded ... more
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