1. (a) Presumption of taxability; resale certificate. For the purpose of the proper administration of this chapter and to prevent evasion of the sales tax it shall be presumed that all receipts are gross receipts that are subject to the tax until the contrary is established. The burden of proving that a sale of tangible personal property or service constituting a sale in accordance with subdivision (2) of subsection (a) of section 12-407 is not a sale at retail is upon the person who makes the sale unless such person takes in good faith from the purchaser a certificate to the effect that the property or service is purchased for resale.

2. (b) Effect of certificate. The certificate relieves the seller from the burden of proof only if taken in good faith from a person who is engaged in the business of selling tangible personal property or services constituting a sale in accordance with subdivision (2) of subsection (a) of section 12-407 and who holds the permit provided for in section 12-409 and who, at the time of purchasing the tangible personal property or service:

   1. (1) Intends to sell it in the regular course of business; (2) intends to utilize such personal property in the delivery of landscaping or horticulture services, provided the total sale price of all such landscaping and horticulture services are taxable under this chapter; or (3) is unable to ascertain at the time of purchase whether the property or service will be sold or will be used for some other purpose. The burden of establishing that a certificate is taken in good faith is on the seller. A certificate to the effect that property or service is purchased for resale taken from the purchaser by the seller shall be deemed to be taken in good faith if the tangible personal property or service purchased is similar to or of the same general character as property or service which the seller could reasonably assume would be sold by the purchaser in the regular course of business.
3. (c) Form of certificate. The certificate shall be signed by and bear the name and address of the purchaser, shall indicate the number of the permit issued to the purchaser and shall indicate the general character of the tangible personal property or service sold by the purchaser in the regular course of business. The certificate shall be substantially in such form as the commissioner prescribes.

4. (d) Liability of purchaser.

   1. (1) If a purchaser who gives a certificate makes any use of the service or property other than retention, demonstration or display while holding it for sale in the regular course of business, the use shall be deemed a retail sale by the purchaser as of the time the service or property is first used by the purchaser, and the cost of the service or property to the purchaser shall be deemed the gross receipts from such retail sale.
   2. (2) Notwithstanding the provisions of subdivision (1) of this subsection, any use by a certificated air carrier of an aircraft for purposes other than retention, demonstration or display while holding it for sale in the regular course of business shall not be deemed a retail sale by such carrier as of the time the aircraft is first used by such carrier, irrespective of the classification of such aircraft on the balance sheet of such carrier for accounting and tax purposes.

5. (e) Sale for resale.

   1. (1) For the purpose of the proper administration of this chapter and to prevent evasion of the sales tax, a sale of any service described in subdivision (37) of subsection (a) of section 12-407 shall be considered a sale for resale only if the service to be resold is an integral, inseparable component part of a service described in said subdivision that is to be subsequently sold by the purchaser to an ultimate consumer. The purchaser of the service for resale shall maintain, in such form as the commissioner requires, records that substantiate:

      1. (A) From whom the service was purchased and to whom the service was sold, (B) the purchase price of the service, and (C) the nature of the service to demonstrate that the services were an integral, inseparable component part of a service described in subdivision (37) of subsection (a) of section 12-407 that was subsequently sold to a consumer.
   2. (2) Notwithstanding the provisions of subdivision (1) of this subsection, no sale of a service described in subdivision (37) of subsection (a) of section 12-407 by a seller shall be considered a sale for resale if such service is to be subsequently sold by the purchaser to an ultimate consumer that is affiliated with the purchaser in the manner described in subparagraph (A) of subdivision (62) of section 12-412.

   3. (3) For purposes of subdivision (1) of this subsection, the sale of canned or prewritten computer software shall be considered a sale for resale if such software is subsequently sold, licensed or leased unaltered by the purchaser to an ultimate consumer. The purchaser of the software for resale shall maintain, in such form as the commissioner requires, records that substantiate:

      1. (A) From whom the software was purchased and to whom the software was sold, licensed or leased, (B) the purchase price of the software, and (C) the nature of the transaction with the ultimate consumer to demonstrate that the same software was provided unaltered to the ultimate consumer.

   4. (4) For purposes of subdivision (1) of this subsection, the sale of digital goods shall be considered a sale for resale if the digital goods are subsequently sold, licensed, leased, broadcast, transmitted, or distributed, in whole or in part, as an integral, inseparable component part of a digital good or service described in subdivision (26), (27), (37) or (39) of subsection (a) of section 12-407 by the purchaser of the digital goods to an ultimate consumer. The purchaser of the digital goods for resale shall maintain, in such form as the commissioner requires, records that substantiate:

      1. (A) From whom the digital goods were purchased and to whom the services described in subdivision (26), (27), (37) or (39) of subsection (a) of section 12-407 was sold, licensed, leased, broadcast, transmitted, or distributed, in whole or in part, (B) the purchase price of the digital goods, and (C) the nature of the transaction with the ultimate consumer.

   5. (5) For purposes of subdivision (1) of this subsection, the sale of services described in subdivision (37) of subsection (a) of section 12-407 shall be considered a sale for resale if such services are subsequently resold as an integral, inseparable component part of digital goods sold by the purchaser of the services to an ultimate consumer of the digital goods. The purchaser of the services described in subdivision (37) of subsection (a) of section 12-407 for resale shall maintain, in such form as the commissioner requires, records that substantiate:

      1. (A) From whom the services described in subdivision (37) of subsection (a) of section 12-407 were purchases and to whom the digital goods were sold, licensed, or leased, (B) the purchase prices of the services described in subdivision (37) of subsection (a) of section 12-407, and (C) the nature of the transaction with the ultimate consumer.
6. (f) Sales to certain affiliates. For the purpose of the proper administration of this chapter and to prevent evasion of the sales tax, no sale of any service by a seller shall be considered a sale for resale if such service is to be subsequently sold by the purchaser, without change, to an ultimate consumer that is affiliated with the purchaser in the manner described in subparagraph (A) of subdivision (62) of section 12-412.

(1949 Rev., S. 2094; P.A. 75-213, S. 24, 25, 53; P.A. 85-240, S. 3, 6; P.A. 88-6, S. 3; P.A. 90-148, S. 22, 34; June Sp. Sess. P.A. 91-3, S. 112, 168; May Sp. Sess. P.A. 92-17, S. 45, 59; P.A. 93-74, S. 64, 67; P.A. 94-21, S. 1, 2; P.A. 95-359, S. 10, 19; P.A. 97-243, S. 18, 67; P.A. 00-174, S. 5, 83; P.A. 02-103, S. 6; P.A. 03-225, S. 7; P.A. 18-26, S. 16; P.A. 19-117, S. 321; P.A. 22-110, S. 19; P.A. 24-151, S. 100.)

History: P.A. 75-213 included references to sale of “service” in Subsecs. (1) and (4) and deleted provision in Subsec. (4) re inclusion of rent charged rather than cost of property to purchaser in gross receipts; P.A. 85-240 amended Subsec. (4) to provide that aircraft held for sale by a certificated air carrier, if used for purposes other than retention, demonstration or display, shall not be deemed to have been sold at retail and subject to sales tax; P.A. 88-6 amended Subsec. (4)(b) by substituting “aircraft” for “airplane” wherever the latter word appears; P.A. 90-148 added Subsec. (5) describing conditions under which a sale of service shall be considered a sale for resale, effective July 1, 1990, and applicable to sales of service for resale on or after that date; June Sp. Sess. P.A. 91-3 amended Subsec. (2) to provide a standard for determining when a certificate to the effect that property is purchased for resale is taken in good faith by the seller; May Sp. Sess. P.A. 92-17 amended Subsec. (2) to include utilization of property in landscaping or horticultural services; P.A. 93-74 added Subsec. (6) re certificate of use for sales of commercial motor vehicles and motor buses to qualify for exemption from the sales tax, effective May 19, 1993, and applicable to sales occurring on and after January 1, 1994; P.A. 94-21 eliminated provision requiring the purchaser of the service for resale to separately state the service being resold and the cost thereof on the invoice and required the purchaser of the service for resale to maintain appropriate records concerning the service and its cost, effective May 2, 1994; P.A. 95-359 deleted Subdiv. (6) re exempt purchases under Sec. 12-412(82) and (83), effective July 13, 1995; P.A. 97-243 amended Subsecs. (1) and (2) to specify that all receipts are presumed to be gross receipts subject to tax and that burden of establishing that a certificate is taken on good faith is on the seller and to change the term horticultural to horticulture, effective June 24, 1997, and applicable to sales occurring on or after October 1, 1997; P.A. 00-174 amended Subsecs. (1) to (3), inclusive, to allow use of resale certificates in the case of sales of services, effective October 1, 2000, and applicable to sales made on or after that date; P.A. 02-103 made technical changes; P.A. 03-225 amended Subdiv. (5) by designating existing provisions as Subpara. (A) and making technical changes therein and added new Subdivs. (5)(B) and (6) to prohibit the setting up of a separate purchasing company to purchase enumerated services on resale for a group of affiliates, effective October 1, 2003, and applicable to sales occurring on or after that date; P.A. 18-26 amended Subdivs. (5) and (6) to delete “subsection (a) of” re Sec. 12-412(62), and further amended Subdiv. (5) to replace references to Sec. 12-407(a)(2)(I) with references to Sec. 12-407(37), and make technical and conforming changes; P.A. 19-117 amended Subdiv. (5) to add Subparas. (C) to (E) re sale of canned or prewritten computer software, digital goods and services described in Sec. 12-407(a)(37), respectively, effective October 1, 2019, and applicable to sales occurring on or after October 1, 2019; P.A. 22-110 redesignated existing Subdivs. (1) to (6) as Subsecs. (a) to (f) and made conforming changes; P.A. 24-151 made a technical change in Subsec. (e)(5).