Connecticut State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Connecticut, with full citations and the original source on every page.
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Is a non-stock cooperative housing corporation that has taxable income exempt from Connecticut's corporation business tax?
No — not if it has taxable income. A non-stock cooperative housing corporation CAN qualify as a 'cooperative housing corporation' under Conn. Gen. Stat. § 12-214(a)(5) and Conn. Agencies Regs. § 12-21…
Is customizing a customer's car with performance and body enhancements taxable in Connecticut as a repair, or as fabrication of the customer's property?
It's taxable, but as fabrication — not as a repair. A company added engine and body 'enhancements' (customization) to customers' vehicles, boosting their performance and value. DRS held this is NOT ta…
Does a Connecticut manufacturer owe use tax on product displays it buys, stocks with its goods, and gives free to retailers?
It depends on where the retailer is. A hardware maker bought empty product displays from an out-of-state supplier, stocked them with its hardware in Connecticut, and gave the stocked displays free to …
Does a for-profit medical lodging facility have to collect Connecticut room occupancy tax once it is licensed as a health care institution?
No -- once it is licensed. A for-profit 'Medical Hotel' provided short-term rooms, 24-hour nursing care and meals to patients recovering from procedures or treatments. It had a Certificate of Need (Co…
Is a company's on-line and archival data storage service a taxable computer and data processing service in Connecticut?
Partly. A division of a large out-of-state corporation stored Connecticut customers' data at out-of-state facilities, both on-line (customers access it from their own computers) and archival (data cop…
Is a crane or hydraulic excavator mounted on a truck chassis exempt from Connecticut sales tax as a 'commercial truck'?
Only if it mainly hauls freight. A company sold and leased cranes and hydraulic excavators mounted on truck chassis, each rated over 26,000 pounds and highway-capable. DRS held such a vehicle is exemp…
Are business management services a Connecticut company sells to out-of-state clients taxable when the clients do no business in Connecticut?
No. A Connecticut-headquartered parent corporation's only business was providing 'business analysis, management, management consulting and public relations services' (Conn. Gen. Stat. § 12-407(2)(i)(J…
Is assigning the unexpired term of a nonrenewable 99-year ground lease subject to Connecticut's real estate conveyance tax?
No. A tenant held a NONRENEWABLE 99-year ground lease of Connecticut land and had built a building on it that would revert, without payment, to the landlord when the lease ended. After the tenant defa…
Is an auto-parts locator service that gives customers access to a maintained database a taxable computer and data processing service in Connecticut?
Yes. An out-of-state company ran an auto-parts locator that let Connecticut insurers and salvage yards find parts either by logging into the company's mainframe database or by calling an '800' line wh…
When a building is gutted to its outer walls, are the construction services taxable renovation or exempt new construction in Connecticut?
Mostly untaxed new construction -- with one taxable exception. A company kept only the exterior walls of a former warehouse and built a new gabled skylight roof (adding cubic footage), new interior wa…
Is a satellite farm-data subscription a taxable computer service, are its ad transmissions taxable, and who owes tax on the receiving equipment?
A company beamed around-the-clock farm-market data (grain/livestock quotes, weather, news) by satellite to subscribers using company-owned receiving equipment, and also let 'information providers' sen…
Is separately-stated labor to install a product excluded from Connecticut sales tax when the product is attached to real property?
It depends on the type of real property. A company sold mailboxes and offered separately-stated installation (sinking a post, attaching the box). Conn. Gen. Stat. § 12-407(8)(e) and (9)(e) exclude sep…
Is a medical-claims processing and collection service a taxable computer service or business management service in Connecticut?
Neither -- it's not taxable. A company processed, managed and collected doctors' and hospitals' insurance and Medicare/Medicaid claims, retaining a percentage of what it collected as its fee, and it g…
Are a management company's nutrition and food-service charges to a nursing home taxable business management services in Connecticut?
It depends on who eats the meal. A management company ran a nonprofit nursing home's food service -- buying food as the home's agent, preparing and delivering meals, cleaning kitchen equipment, and ca…
Does a Connecticut DRS Ruling stop being reliable when the underlying law or regulation changes, even without notice from the Department?
Yes -- automatically. DRS held that one of its Rulings ceases to have any force and effect once the law or regulation it was based on changes, as of the effective date of that change and without any f…
When were a sales agent's fees subject to Connecticut sales tax on the sale of a business's tangible property?
Only in narrow circumstances -- and this ruling is now obsolete. A company introduced buyers and sellers of businesses and business assets for a contingent fee, without negotiating the deals. DRS held…
Can a Connecticut corporation deduct dividends it receives from a regulated investment company that aren't deductible on its federal return?
No -- but note this ruling has been REVOKED by Ruling 93-24, and DRS marks it 'not current ... for reference purposes only,' so do not rely on it. As originally issued, DRS held that a Connecticut cor…
Are an out-of-state software company's analysis, adaptation, training, and license fees taxable in Connecticut?
It splits. An out-of-state company sold a tool for developing custom software -- analyzing each customer's needs, adapting the program, licensing it, and offering maintenance and training. DRS held th…
Is encoding machinery a satellite broadcaster uses to make its own broadcast disks exempt Connecticut manufacturing machinery?
No -- it's taxable. A satellite broadcaster ran about 80 channels from a Connecticut facility. To beam a movie, it first used high-speed 'encoding' machinery to convert the movie from analog videotape…
How are hazardous-waste cleanup, remediation, and related site services taxed under Connecticut's services-to-real-property tax?
It splits several ways. A company cleaned up hazardous waste at industrial and commercial sites -- decontaminating facilities and running groundwater/soil remediation. Connecticut taxes services to in…
Are environmental and safety training and consulting services for a manufacturer taxable business management services in Connecticut?
It depends on whether it's training or consulting. A manufacturer that generates hazardous waste hired a provider for a mix of environmental and safety services. DRS split them under the business-mana…
Are a town's 'pay-as-you-throw' trash-bag fees a taxable sale of bags or a nontaxable intangible right to dispose of trash?
Not taxable to residents. A Connecticut town ran a 'pay-as-you-throw' program: residents' trash is collected only if placed in special town bags, distributed (at town hall or through retail-store agen…
Are wigs and hairpieces for disease-related hair loss exempt from Connecticut sales tax as prostheses?
No -- and note this ruling is OBSOLETE: DRS marks it 'not current … reference purposes only' and states it was 'obsoleted by AN 94(5),' so do not rely on it. As issued, DRS held that wigs and hairpiec…
Are a meat packer's feed, hay, and packaging materials exempt from Connecticut tax as materials used in fabrication?
Mostly no. A Connecticut meat-packing plant bought live horses, slaughtered and butchered them, and packaged the meat (mostly for export to Europe). DRS held that the butchering and cutting of carcass…
Which parts of a gas pipeline are tax-exempt 'materials used directly in the furnishing of gas,' and is building the pipeline a taxable service?
Partly exempt. An interstate gas-pipeline company bought the components of a new Connecticut pipeline. DRS split them: the PIPE and the VALVE ASSEMBLIES and CONNECTORS are 'materials used directly in …
Is managing the redevelopment of a vacant office complex into a leased multi-tenant property a taxable service in Connecticut?
Yes, taxable. A property-management company was hired to oversee turning a vacant office complex into a fully occupied, multi-tenant property -- developing a master plan, hiring the architect and cont…
Are an investment advisory firm's consulting fees subject to Connecticut sales tax, and does it matter whose investments the advice concerns?
It depends on whose investments the advice is really about. An investment advisory company asked whether its investment-consulting fees are subject to Connecticut sales and use tax. DRS held: (a) NOT …
Is a qualified REIT subsidiary a separate corporation for Connecticut corporation business tax, or is it merged into the REIT?
Both, in a sense. A qualified REIT subsidiary -- a wholly-owned subsidiary of a real estate investment trust that federal law disregards as a separate corporation under 26 U.S.C. § 856(i) -- is STILL …
Is number 2 heating oil used only for heating a taxable 'petroleum product' under Connecticut's petroleum products gross earnings tax?
Not taxable as a petroleum product. A petroleum refiner/distributor sold NUMBER 2 HEATING OIL (ASTM Specification D396-69) to a customer that used it only to HEAT things -- the interior of its commerc…
Are meals a charity buys to honor its volunteers exempt from Connecticut sales tax if the charity pays and takes no reimbursement?
Exempt. A charitable organization with a Connecticut exemption permit held an annual luncheon to honor and encourage its fundraising volunteers, paying entirely with its own funds by check and neither…
Is a members-only store's membership fee a nontaxable intangible right, or a taxable sale of the membership badge?
Not taxable. A members-only retail/wholesale store charged an annual membership fee for a badge that lets members enter the store and buy merchandise (the fee isn't credited toward purchases). DRS rul…
Is a company that only delivers other businesses' advertising -- without creating it -- providing a taxable advertising or public relations service?
Not taxable. A company delivered sponsors' advertising directly to households (people who had moved, newly engaged women, new parents, new U.S. citizens) -- presenting sales messages, imprinted advert…
Which direct-mail-firm charges are taxable in Connecticut -- the mailing service, the advertising, the printing, or the postage?
It depends on what the firm actually does. DRS addressed a direct mail firm in two situations. (a) PURE MAILING -- just sorting, folding, inserting, and mailing materials the client had printed elsewh…
Is selling advertising space in a periodically distributed trade directory taxable, or is it exempt 'media advertising'?
Exempt. A company published an annual directory of trade vendors (supplies and services for architects and contractors) and sold advertising space in it to those vendors, distributing the directory to…
Is each fund of a multi-fund regulated investment company (mutual fund) a separate corporation for Connecticut corporation business tax?
Each fund is treated as a separate corporation. A multi-fund regulated investment company (a RIC -- essentially a mutual fund with several 'series' funds) asked how Connecticut's corporation business …
Is delivering video programming to consumers by microwave or satellite a 'community antenna television service' subject to Connecticut sales tax?
Yes -- it is a 'community antenna television' (CATV) service. A company delivered video programming directly to consumers by microwave or satellite, with customers using descrambling equipment. DRS ru…
Is deeding land from co-tenants to their newly formed partnership a taxable contribution of partnership assets under Connecticut's conveyance tax?
Taxable. Three people held two parcels as tenants-in-common since 1983 and filed partnership tax returns, but didn't sign a formal partnership agreement until 1990 -- and that agreement described thei…
Does incorporating a farm void the individual farmer's tax exemption permit, and can the new corporation use the farmer's sales history to qualify?
Two traps. A farmer with a Connecticut Farmer Tax Exemption Permit planned to transfer his farm to a newly formed corporation in exchange for its stock. DRS ruled: (1) the transfer makes the farmer's …
Is a company that copies and sells certified hospital medical records selling taxable tangible personal property or an exempt service?
Taxable. A company copied certified hospital medical records and sold the copies to attorneys, insurers, peer-review organizations, government agencies, and individuals. DRS ruled this is a taxable SA…
When a hotel stay lasts more than 30 consecutive days, does Connecticut's room occupancy tax still apply to the first 30 days?
Historical rule -- this Ruling has since been OBSOLETED by Announcement 94(8) and no longer states current law, so confirm the current treatment before relying on it. A hotel agreed to provide lodging…
Are a mutual fund's exempt-interest dividends derived from Puerto Rico obligations subject to Connecticut's dividend and interest income tax?
Exempt -- but this concerns a Connecticut tax that no longer applies in this form (the ruling is obsoleted by AN 94(2), obsoleted in part by PA 94-4 § 13, and superseded in part by SN 95(17)), so trea…
Are charges for placing advertisements on the sides of trailer-trucks subject to Connecticut sales tax as advertising services?
Not taxable -- it counts as media advertising. A company charged for placing advertisements on the sides of its trailer-trucks. Connecticut taxes advertising services only when they are NOT related to…
Are a tax preparer's charges subject to Connecticut sales tax when it electronically files a client's return at no extra charge, even if the invoice does not separately state an e-filing charge?
Not taxable, on these facts. Electronic filing of a tax return is a taxable computer and data processing (CDP) service in Connecticut (Conn. Gen. Stat. § 12-407(2)(i)(A); TSSN-41), and when a preparer…
Is a company's survey research sampling service subject to Connecticut sales and use tax?
No -- not taxable. A company sold survey research sampling services: it drew random statistical samples from the demographic groups and geographic regions its clients specified (built from telephone l…
Must a parent company add back expenses connected to a dividend from its wholly-owned subsidiary when it has already reallocated all of its income and expenses to its subsidiaries?
No add-back on these specific facts -- and note DRS marks this Ruling 'not current,' so it is historical and highly fact-bound. A parent company filed a Connecticut combined corporation business tax (…
Is a service that retrieves motor vehicle records for customers -- using computers to match and transmit the data -- a taxable computer and data processing service in Connecticut?
Not a taxable computer service. A company retrieved motor vehicle driving records for its customers: it routed each request through a service bureau to the Connecticut DMV and returned the DMV's repor…
Is retipping a manufacturer's worn carbide saw blades a taxable repair service, or an exempt purchase of manufacturing tools?
Repair is taxable; a new blade is exempt -- but note this ruling is marked not current (obsoleted in part by AN 2000(8), clarified by Ruling 94-4), so confirm today's law. A kitchen-cabinet manufactur…
Are sales of surgical instruments and wound-closure supplies to doctors and veterinarians subject to Connecticut sales and use tax?
Taxable to doctors and vets; exempt only to nonprofit hospitals. A company sold surgical instruments and wound-closure supplies (staplers, clips, staples, suture materials, laparoscopic instruments). …
Were a nonprofit hospital's human-relations and organizational consulting services subject to Connecticut sales and use tax?
No under this historical ruling. A nonprofit charitable hospital's division advised public, private, and nonprofit organizations on workplace stress, wellness, morale, motivation, collaboration, commu…
May a Connecticut manufacturer buy air compressors tax-free when they eject parts from dies, sandblast finished products, and also power production machinery?
Yes, assuming the company qualified as a manufacturer. A compressor used to blow a part from a die and two compressors used primarily to sandblast parts in the final finishing stage qualified as machi…
Did Connecticut's former capital gains tax apply when an older retirement-plan participant elected federal transitional capital-gain treatment for a lump-sum distribution?
Yes under this historical ruling. A Connecticut resident who had reached age 50 before January 1, 1986 and elected Pub. L. No. 99-514 § 1122(h)(3) treatment for a qualified-plan lump-sum distribution …
Was a Connecticut S corporation shareholder's share of interest income subject to the former dividend and interest income tax when federally reported as nonseparately computed income?
No under this historical ruling. When the S corporation's interest income was properly reported for federal purposes as a nonseparately computed item, the resident shareholder's pro rata share was not…
Is on-site labor to relocate and install production machinery at a Connecticut customer's plant subject to sales tax?
No, if the installation labor is separately stated on the customer's bill. The trucking, hauling, crane, and rigging company removed and relocated floor lags, installed production machines on them, an…
Was hazardous-waste cleanup performed under a state environmental mandate considered 'voluntary' and excluded from Connecticut sales tax?
No under this historical ruling. The exclusion in Conn. Gen. Stat. § 12-407(2)(i)(I) applied only when a company acted solely on its own initiative. Cleanup following a federal or state agency mandate…
Were literary-agent fees taxable Connecticut sales-agent services when agents helped authors place manuscripts with publishers?
No. Literary agents represented authors in approaching publishers and were paid through retainers or commissions, but the manuscript was the author's intellectual product and was not tangible personal…
Does Connecticut real estate conveyance tax apply when a general partnership converts to a limited partnership and records a deed while remaining a continuing partnership?
No on these facts. The same partners kept the same profit, loss, and capital percentages; the same business continued; and the real property remained held by a partnership treated as continuing under …
Can a corporate merger involving a company that owns Connecticut real property trigger the controlling interest transfer tax even though the real estate passes by operation of law without a deed?
Yes. Shareholders acting in concert transferred more than 50% control of the disappearing corporation and received parent stock, notes, and cash. The Connecticut real property vested in the surviving …
Were an accounting firm's economic and financial litigation-support services taxable as business analysis or management consulting in Connecticut?
No under this historical ruling. The accounting firm reviewed case materials, researched financial and business data, formed expert opinions, prepared exhibits and testimony, and assisted attorneys wi…
Did an out-of-state manufacturer become subject to Connecticut corporation business tax by leasing promotional video machines to Connecticut retailers?
Yes. The machines' advertising, order-form, and out-of-state order-solicitation functions were protected solicitation-related activities under Public Law 86-272, and unrelated contractors' repair visi…
How did Connecticut historically tax services provided to condominium associations with both owner-occupied and leased units?
The 1990 ruling used three categories. Some services -- including landscaping, maintenance, janitorial, exterminating, design, locksmith, window cleaning, pool work, and tangible-property repair -- we…
Browse Connecticut rulings by topic
These are official tax letter rulings and advisory opinions issued by Connecticut's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.