Was the standalone creation of a freelance article taxable as consulting, public relations, advertising, or tangible personal property?

Note -- partially obsolete historical guidance. The source states that Announcement (AN) 94(4) obsoleted the ruling in part.

Plain-English summary

DRS defined consulting as advice about a client's business operations and said freelance article writing did not fit that definition.

Creating an article without further involvement in placing it in a publication or disseminating it to the public was not a public-relations service. DRS also said a freelance article was not taxable tangible personal property.

The standalone writing service therefore had no sales-tax consequence when provided to X Corporation's Hartford headquarters or its New York operating group.

What this means for you

The historical result was limited to article creation alone. AN 94(4) later obsoleted the ruling in part.

Common questions

Was freelance article creation consulting? No under the ruling.

Was it public relations? Not without placement or dissemination involvement.

Was the article taxable tangible personal property? No.

Did the result differ for the Hartford and New York client units? No.

Citations and references

• Conn. Gen. Stat. § 12-407(2)(i)(J) and (W), as cited in the ruling.
• Public Act No. 89-251, as cited in the ruling.
• Announcement (AN) 94(4) -- identified by the source as partly obsoleting this ruling.

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-151

Original ruling text

Ruling 89-151, Consulting

Ruling 89-151

Consulting

This Ruling has been obsoleted in part by  AN 94(4)

You have asked the Legal Division several questions as to whether your services as a freelance writer are subject to the sales and use tax under Public Act No. 89-251, which amended the language of Conn. Gen. Stat. §12-407(2)(i)(J) to tax "business analysis, management, consulting and public relations services," or under Conn. Gen. Stat. §12-407(2)(i)(W) as "advertising or public relations services."

Because the Department has defined "consulting" to mean the providing of advice on matters relating to the operations of a client's business, it is our opinion that the work of a freelance writer is not considered to be "consulting" within the scope of this definition.

The creation of a freelance article without further involvement in its placement in a publication or in its dissemination service to the public is not considered to be a public relations service by the Department.

The Department has previously taken the position that a freelance article is not tangible personal property subject to the sales tax.

Therefore, a service that involves solely the creation of a freelance article has no sales tax consequences under our current law. Thus, your services to X Corporation are not subject to the sales tax either when rendered to the worldwide headquarters office of X Corporation in Hartford, Connecticut or to its major operating group in New York.

LEGAL DIVISION

October 20, 1989