A recent ruling from the Connecticut Appellate Court has affirmed the tax-exempt status of certain equipment used by Broadridge Output Solutions, Inc. The decision, released on July 7, 2026, affects how businesses in Connecticut assess their tax obligations regarding manufacturing equipment. The ruling is particularly significant for companies that handle large-scale printing and mailing operations.
Broadridge Output Solutions, a company that processes electronic data and prepares printed documents for mailing, had challenged the town of South Windsor's tax assessments on its equipment for the years 2020 and 2021. The court's decision clarifies the criteria for tax exemptions under Connecticut law, particularly for machinery used in manufacturing processes.
The case originated from two tax appeals filed by Broadridge Output Solutions against the town of South Windsor, claiming that certain machines used in its printing process were exempt from personal property taxes. The trial court had previously ruled in favor of Broadridge, leading South Windsor to appeal the decision.
Broadridge Output Solutions is a company that specializes in converting electronic data into printed documents, such as credit card bills and utility statements, which are mailed to customers. The town of South Windsor had assessed taxes on various pieces of equipment used in this process, leading to the dispute. The trial court found that certain machines used for inserting and sorting documents were integral to the manufacturing process and thus qualified for tax exemption under Connecticut General Statutes § 12-81 (76).
The Connecticut Appellate Court, led by Chief Judge Cradle and Judges Elgo and Seeley, upheld the trial court's ruling. The court stated, "The defendant's claims did not challenge the trial court's conclusion that the machines were entitled to the tax exemption because their predominant function was integral to the manufacturing process of the printing equipment." This ruling confirms that the machines used by Broadridge for inserting and sorting documents are indeed exempt from taxation.
The court's opinion detailed the classification of Broadridge's equipment into four categories: printing equipment, inserting equipment, sorting/presorting equipment, and mailing equipment. The court noted that while the printing equipment was exempt, the mailing equipment was not, as it was deemed too far removed from the manufacturing process.
In its ruling, the court emphasized that for equipment to qualify for tax exemption, it must be used predominantly in the manufacturing process. The court explained, "There must be a change in form by the machinery... the taking of the bill, as it’s eventually produced from the information... creates something new." This distinction is crucial for businesses that rely on similar machinery for their operations.
The ruling has significant implications for businesses in Connecticut, particularly those involved in printing and mailing services. It sets a precedent for how equipment used in these industries is assessed for tax purposes. Companies may now have clearer guidance on what qualifies for tax exemption, potentially leading to lower tax liabilities for similar operations.
Going forward, businesses that utilize machinery for manufacturing processes can look to this ruling as a benchmark for understanding their tax obligations. The decision may encourage more companies to seek tax exemptions for their equipment if they can demonstrate that it plays an integral role in manufacturing.
The town of South Windsor may choose to appeal the ruling to the Connecticut Supreme Court, although details regarding any potential appeal were not available in the court filing. Additionally, Broadridge Output Solutions has filed tax appeals for the years 2022, 2023, and 2024, which are currently pending and may also be affected by this ruling.