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Ezel / Tax Rulings / CT
CT Ruling 89-26 Sales and Use Taxes 1989-07-12

Were custom software, software maintenance agreements, and installation charges taxable under Connecticut Ruling 89-26?

Short answer: Yes. The ruling treated custom software as taxable tangible personal property, the related maintenance agreement as taxable computer-programming or processing service, and installation charges as part of the taxable software sale. The ruling is obsolete.

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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 1989 Connecticut Department of Revenue Services Ruling is not current. The official page says it was obsoleted by Announcement 94(10), so it is provided only as historical reference and should not be used as current authority. It addressed custom software, software maintenance, computer programming, and installation charges under the law then in effect. 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 software and digital-service 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)

Plain-English summary

Custom software was taxable as tangible personal property. The software maintenance agreement was also taxable under the provision that included computer programming, and installation charges were taxable as part of the software sale.

The official archive says this ruling was obsoleted by Announcement 94(10).

What this means for you

The historical ruling treated the software, maintenance, and installation as taxable under the 1989 framework. Its obsolete status means it does not establish current software or digital-service treatment.

Common questions

Was custom software taxable? Yes.

Were maintenance and installation taxable? Yes.

Citations and references

  • Conn. Gen. Stat. §§ 12-407(2)(a) and (c), and Conn. Agencies Regs. § 12-426-25(c), as cited in the ruling.

Source

Original ruling text

Ruling 89-26, Software

This Ruling has been obsoleted by AN 94(10)

You have inquired as to the taxability of software maintenance agreements, custom software and installation charges.

Custom software is tangible personal property and is therefore subject to the sales tax pursuant to section 12-407(2)(a) of the Connecticut General Statutes. The maintenance agreement with respect to the software is a taxable sale pursuant to section 12-407(2)(c) of the Connecticut General Statutes which taxes the producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish the materials used in such activity, including but not limited to, computer programming. The installation charges would be taxable as part of the sale of the tangible personal property under section 12-407(2)(a) of the Connecticut General Statutes and section 12-426-25(c) of the Regulations of Connecticut State Agencies.

LEGAL DIVISION

July 12, 1989

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