The Connecticut Department of Revenue Services issued a ruling stating that a company that provided goods as well as services was not entitled to take the benefit of the manufacturing exemption. The taxpayer manufactured its own asphalt, which it would either supply to its customers and the customers would apply themselves or the taxpayer would supply and apply the asphalt at the customer location. The situation that the taxpayer would merely supply the asphalt without application accounted for 20% of its total sales. The Department stated that the company would not qualify as a manufacturing plant for purposes of the manufacturing machinery exemption of Conn. Gen. Stat. Section 12-412(34) due to the fact that over 50% of the company’s sales resulted from the taxpayer supplying and applying the asphalt. The Department stated that since the taxpayer consumes the asphalt in rendering its paving services, the predominant purpose of the taxpayer creating the asphalt is not to create a product to be sold, but to create tangible personal property consumed in the rendering of services. Since this occurs in 80% of the sales transactions, the 50% qualifying rule does not apply, therefore, the manufacturing exemption is not applicable. (Ruling No. 2005-1, Connecticut Department of Revenue Services, January 13, 2005)