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Ezel / Tax Rulings / CT
CT Ruling 89-128 Sales and Use Taxes 1989-09-28

Were media-advertising receipts, including placement fees and development charges, subject to Connecticut sales and use tax?

Short answer: No. Total receipts for media-advertising services, including placement and development charges, were nontaxable. The agency was the consumer of incorporated graphic designs, artwork, and mechanicals and owed sales or use tax on those purchases.

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 media-advertising sales-and-use-tax provision then in effect. The ruling addresses total advertising receipts, placement fees, development charges, and the agency's purchases of tangible property incorporated into media advertising. Different services or production arrangements may produce a different result. 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

Total gross receipts for services related to media advertising were not subject to sales and use tax. The nontaxable receipts included placement fees and development charges.

The cited public act did not distinguish between developing ideas or concepts and developing layouts or mechanicals.

The advertising agency was the consumer of tangible personal property purchased for incorporation into media advertising, including graphic designs, artwork, and mechanicals. The agency owed sales or use tax on those purchases.

What this means for you

The historical ruling separated the agency's nontaxable receipts for media-advertising services from its taxable purchases of property used in producing the advertising.

Common questions

Were placement fees taxable? No when included in the described media-advertising services.

Were development charges taxable? No.

Did the law distinguish ideas from layouts or mechanicals? No.

Who owed tax on graphic designs, artwork, and mechanicals bought for the advertising? The advertising agency, as the consumer.

Citations and references

  • Conn. Gen. Stat. § 12-407(2)(i)(W), as cited in the ruling.
  • 1989 Connecticut Public Act 89-251, as cited in the ruling.

Source

Original ruling text

Ruling 89-128, Advertising

The total gross receipts for advertising services related to media advertising, inclusive of placement fees and development charges, are not subject to sales and use tax pursuant to section 12-407(2)(i)(W) of the Connecticut General Statutes, as amended by Public Act No. 89-251. The Public Act does not distinguish between the development of ideas or concepts and the development of layouts or mechanicals. The advertising agency is the consumer of all tangible personal property, e.g., graphic designs, artwork, mechanicals, that is purchased for incorporation into media advertising and is liable for payment of the sales or use tax on said purchases.

TIMOTHY F. BANNON

COMMISSIONER

September 28, 1989

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