Ezel / Tax Rulings / CT
CT Ruling 89-247 Sales and Use Taxes 1989-11-29

Were model usage fees taxable, and could an advertising agency give the model agency a resale certificate?

Short answer: The model usage fees were taxable as an employment service. The advertising agency using the models was the ultimate consumer, had to pay sales tax on the model agency's fee, and could not issue a resale certificate.

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 applying the employment-service rules then in effect to model usage fees. The short text treats the advertising agency as the ultimate consumer of the model agency's service and does not describe the contracts, payment flow, or whether the ruling remains current; different staffing or agency arrangements may change the answer. 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)

Plain-English summary

DRS ruled that model usage fees were taxable as an employment service. The advertising agency using the models was the ultimate consumer of the model agency's services.

The advertising agency therefore had to pay sales tax on the model agency's fee and could not issue a resale certificate.

What this means for you

Under the historical ruling, an advertising agency could not treat the model agency's service as something it resold to its own client. It consumed the service and bore the tax.

Common questions

Were model usage fees taxable? Yes, as an employment service.

Who had to pay the tax? The agency using the models.

Could the advertising agency issue a resale certificate? No.

Citations and references

  • The published ruling cites no specific statute or regulation.

Source

Original ruling text

Ruling 89-247, Personnel Services

Model usage fees are subject to sales tax as an employment service. The agency using models is required to pay the sales tax on the model agency's fee. The advertising agency is the ultimate consumer of the model agency's services. As the ultimate consumer, it must pay the tax on such service and cannot issue a resale certificate.

TIMOTHY F. BANNON

COMMISSIONER

November 29, 1989

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