Were a consultant's survey-coordination and interview-oversight services for marketing research companies taxable under Connecticut Ruling 89-82?

Plain-English summary

Marketing research services were exempt, but the taxpayer did not provide those services under the ruling's facts. The taxpayer retained interviewing firms, wrote survey-performance instructions, and supervised the interviewing process for marketing research companies. Connecticut classified that work as taxable consulting.

The taxable sales price included both the consultant's hourly charges and reimbursed expenses. Services provided to out-of-state clients were not taxable when their sole benefit and use occurred outside Connecticut.

The official page says the information is not current and AN 94(4) obsoleted the ruling.

What this means for you

The historical ruling distinguished the exempt underlying marketing research from a separate consultant's coordination and oversight work. Because it is obsolete, current service classifications require current guidance.

Common questions

Did the marketing research exemption cover the consultant? No. The described coordination and oversight work was treated as consulting.

Were reimbursed expenses excluded from tax? No. They were included in the total taxable sales price.

What about work for out-of-state clients? It was not taxable when the sole benefit and use of the services occurred outside Connecticut.

Citations and references

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

Source

• Landing page: Connecticut DRS Rulings
• Ruling: Ruling 89-82

Original ruling text

Ruling 89-82, Consulting

This information is not current and is being provided for reference purposes only

This Ruling has been obsoleted by AN 94(4)

Marketing research services are exempt from the sales and use tax.

According to the information presented in your letter, you are hired by marketing research companies to contact and retain interviewing service firms, to write instructions pertaining to how the surveys will be performed and to oversee the interviewing process by contacting the interviewing service firms on a daily basis. You bill the marketing research companies for your services by the hour plus expenses. The interviewing service companies bill the marketing research firms directly for their services.

Based on the above set of facts, you render consulting services to marketing research companies that are taxable pursuant to section 12-407(2)(i)(J) of the Connecticut General Statutes, as amended by Public Act No. 89-251. The total sales price for your services, including reimbursable expenses are subject to sales or use tax.

The services you provide to out-of-state clients are not taxable when the sole benefit and use of the services inures outside the State of Connecticut.

LEGAL DIVISION

September 6, 1989