CT Ruling 89-132 Sales and Use Taxes 1989-10-05

Were union members' lobbying services exempt when the union put the lobbyists on its payroll and paid them?

Short answer: Yes. Lobbying services were generally taxable, but services rendered by an employee to an employer were exempt. Because the union's members represented it, were on its payroll, and were compensated by it, the lobbying was exempt. DRS says AN 2000(8) obsoleted the ruling.

Apply this to your situation

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

Disclaimer: This is an official 1989 Connecticut Department of Revenue Services Ruling reflecting the lobbying-services rule and employee-to-employer exemption then in effect. DRS expressly marks the information 'not current' and says Announcement (AN) 2000(8) obsoleted it. The result depends on the union members representing the union while on its payroll and compensated by it. 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 current treatment.

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 -- obsolete historical guidance. DRS marks this information "not current" and states that Announcement (AN) 2000(8) obsoleted the ruling.

Plain-English summary

Lobbying services were generally subject to sales and use tax, but lobbying rendered by an employee to an employer was exempt.

Company X used its own members to represent the union at the State Capitol, placed the lobbyists on its payroll, and compensated them at the rate they received at their regular jobs with Company Y. DRS concluded that the lobbying was exempt as a service rendered by employees to their employer.

What this means for you

The historical exemption depended on an employee-employer relationship, including the union's payroll and compensation facts. AN 2000(8) later obsoleted the guidance.

Common questions

Were lobbying services generally taxable? Yes under the cited historical provision.

What lobbying services were exempt? Services rendered by an employee to an employer.

Why did Company X qualify? Its own members represented the union, were on its payroll, and were paid by it.

Citations and references

Conn. Gen. Stat. § 12-407(2)(i)(T), as cited in the ruling.
1989 Connecticut Public Act 89-251, as cited in the ruling.
Announcement (AN) 2000(8) -- identified by DRS as obsoleting the ruling.

Source

Landing page: Connecticut DRS Rulings
Ruling: Ruling 89-132

Original ruling text

Ruling 89-132, Lobbying

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

This Ruling has been obsoleted by AN 2000(8)

Lobbying services are subject to sales and use tax pursuant to section 12-407(2)(i)(T) of the Connecticut General Statutes, as amended by Public Act No. 89-251. However, lobbying services are exempt from sales and use tax when they are rendered by an employee to an employer.

Since X Company has its own members represent the union at the State Capitol, has the lobbyists on its payroll and compensates the union members at the rate of pay they receive at their regular jobs with Y Company, the lobbying service is exempt from sales and use tax as a service rendered by an employee to an employer.

LEGAL DIVISION

October 5, 1989

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