Ezel / Tax Rulings / CT
CT Ruling 89-158 Sales and Use Taxes 1989-10-26

Were sales, leases, or rentals transferring dominion and control of computer software subject to Connecticut sales and use tax?

Short answer: Yes under this historical ruling. DRS treated software as tangible personal property, included leasing within sales, and said transferring dominion and control was a taxable lease or rental rather than a computer or data-processing service. DRS says AN 94(10) partly obsoleted it.

Apply this to your situation

This page answers the general question as of 1989. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1989
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1989 Connecticut Department of Revenue Services Ruling reflecting the software, lease, rental, and computer-service rules then in effect. DRS says Announcement (AN) 94(10) obsoleted it in part. Its tangible-property and dominion-and-control classifications should not be assumed current for modern software delivery or licensing models. Connecticut imposes sales and use tax solely at the state level: there are no local or municipal sales taxes. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Note -- partially obsolete historical guidance. The source states that Announcement (AN) 94(10) obsoleted the ruling in part.

Plain-English summary

DRS treated sales of computer software as taxable sales of tangible personal property. The definition of sale and selling included leasing.

Transferring dominion and control of software for consideration was not treated as a computer or data-processing service. It was a taxable lease or rental of tangible personal property.

What this means for you

The historical ruling focused on dominion and control and tangible-property treatment. AN 94(10) later obsoleted the guidance in part.

Common questions

Were software sales taxable? Yes under the ruling.

Did sales include leasing? Yes.

Was a dominion-and-control transfer a computer service? No; DRS treated it as a taxable lease or rental.

Citations and references

  • Conn. Gen. Stat. § 12-407(2), as cited in the ruling.
  • Conn. Agencies Regs. § 12-426-27(b)(1) and § 12-426-25, as cited in the ruling.
  • Announcement (AN) 94(10) -- identified by the source as partly obsoleting this ruling.

Source

Original ruling text

Ruling 89-158, Software

Ruling 89-158

Software

T his Ruling has been obsoleted in part by   AN 94(10)

Please be advised that it is the Department's position that sales of computer software are sales of tangible personal property subject to Connecticut sales and use taxes. (As you are aware, "sale" and "selling" includes leasing; Conn. Gen. Stat. §12-407(2).) This point is emphasized in Conn. Agencies Regs. § 12-426-27(b)(1) ("The transfer of dominion and control of computer hardware and software for a consideration does not come within the purview of this section [dealing with computer and data processing services], since such transfer shall constitute a lease or rental of tangible personal property and be subject to tax under [Conn. Agencies Regs.] Section 12-426-25.").

LEGAL DIVISION

October 26, 1989

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