Sec. 12-411b. Collection of use tax by certain state contractors.
Sec. 12-411b. Collection of use tax by certain state contractors. (a) For any
contract for provision of tangible personal property to the state entered into on or after
August 16, 2003, each department head, as defined in section 4-5, shall enter into an
agreement with the contractor pursuant to which such contractor shall agree, on its own
behalf and on behalf of each affiliate, as defined in subsection (d) of this section, of
such contractor, for the term of the state contract, to collect and remit to the state on
behalf of its customers any use tax due to the state under the provisions of this chapter
for items of tangible personal property sold by the contractor or by any of its affiliates
in the same manner as if the contractor and its affiliates were engaged in the business
of selling tangible personal property for use in this state and had sufficient nexus with
this state to be required to collect use tax due to the state.
(b) The following provisions shall apply to and be made part of any agreement
entered into pursuant to subsection (a) of this section:
(1) The contractor and its affiliates are not liable for use tax not paid to them by a
customer;
(2) A customer's payment of a use tax to the contractor or its affiliates relieves the
customer of liability for the use tax;
(3) The contractor and its affiliates shall remit all use taxes they collect from customers on or before the due date specified in the agreement, which may not be later than
the last day of the month next succeeding the end of a calendar quarter or other tax
collection period during which the tax was collected; and
(4) Any contractor or affiliate who fails to remit use taxes collected on behalf of its
customers by the due date specified in the agreement shall be subject to the interest and
penalties provided for persons required to collect sales tax under this chapter.
(c) Any agreement entered into under subsection (a) of this section may provide
that the contractor and its affiliates shall collect the use tax only on items that are subject
to the six per cent rate of tax.
(d) For purposes of this section, "affiliate" means any person, as defined in section
12-1, that controls, is controlled by, or is under common control with another person.
A person controls another person if the person owns, directly or indirectly, more than
ten per cent of the voting securities of the other person. For purposes of this subsection,
"voting security" means a security that confers upon the holder the right to vote for the
election of members of the board of directors or similar governing body of the business,
or that is convertible into, or entitles the holder to receive, upon its exercise, a security
that confers such a right to vote. "Voting security" includes a general partnership interest.
(June 30 Sp. Sess. P.A. 03-1, S. 105.)
History: June 30 Sp. Sess. P.A. 03-1 effective August 16, 2003, and applicable to sales occurring on or after July 1, 2003.