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Ezel / Tax Rulings / CT
CT Ruling 91-17 Sales and Use Taxes 1991-05-09

Is a company's survey research sampling service subject to Connecticut sales and use tax?

Short answer: No -- not taxable. A company sold survey research sampling services: it drew random statistical samples from the demographic groups and geographic regions its clients specified (built from telephone listings, ZIP and SIC codes, census data, subscription lists and other public information), tailored them by computer and statistics, and delivered the result by modem, printout, magnetic tape or mailing labels. DRS ruled these are marketing research services, which are NOT among the services specifically enumerated as taxable under Conn. Gen. Stat. § 12-407(2), and are therefore not subject to Connecticut sales and use taxes. Connecticut taxes only the services the statute lists by name, so a service it does not list -- like this survey-sampling work -- stays untaxed.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1991
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 Ruling of the Connecticut Department of Revenue Services (DRS), typically issued to a specific taxpayer in response to that taxpayer's request and based on the specific facts presented and the Connecticut tax law in effect when it was issued. DRS may later declare a Ruling obsolete or supersede it by a subsequent Ruling, Policy Statement, or Announcement, so a taxpayer with different facts should not assume it still applies. Connecticut has expanded the list of taxable services in Conn. Gen. Stat. § 12-407(2) many times since 1991, so the fact that a service was not enumerated then does not mean it is still untaxed, confirm the current law. This Ruling was later cited in Ruling 94-9. Taxpayer-identifying details are redacted. Connecticut imposes its 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

A company sold survey research sampling services. It started with a large database drawn from public sources — telephone listings, ZIP codes, SIC (industry) codes, census data, periodical subscription lists and the like — and then used computers and statistics to build a random sample matching the demographic groups and geographic regions each client specified. The client used that sample to run its own survey (by phone, mail or in person). The finished product was delivered in whatever form the client wanted: transmitted by modem, or sent as computer printouts, magnetic tapes or mailing labels.

The company asked whether this survey research sampling service is subject to Connecticut sales tax.

DRS said no. Connecticut's sales and use tax reaches services only when the service is one of the specific categories the statute lists by name in Conn. Gen. Stat. § 12-407(2). Survey research sampling is a marketing research service, and marketing research is not one of the enumerated categories. Because the statute does not list it, the service is not subject to sales and use taxes.

What this means for you

Connecticut taxes services only when the statute names them

Connecticut does not tax services in general — it taxes a defined list of enumerated services. If the service you sell is not on that list, it is outside the sales tax. In 1991, market/survey research was not on the list, so this company's sampling work was untaxed.

The delivery format did not change the answer

The company delivered its samples by modem, printout, tape or mailing labels. That did not turn the service into a taxable sale of tangible personal property or a taxable computer service — DRS looked at what the company was really selling (research/analysis) rather than the medium it arrived on.

Check today's enumerated-services list before relying on this

This is the important caveat. The list of taxable services in § 12-407(2) has been expanded many times since 1991. A service that was untaxed then may be taxed now. Treat this ruling as evidence of how DRS reasons about a service that is not enumerated — not as a guarantee that a given research or data service is untaxed today. Confirm the current statute.

Common questions

Q: Are marketing/survey research services subject to Connecticut sales tax?
A: In this 1991 ruling DRS held they were not, because marketing research is not one of the services specifically enumerated as taxable under Conn. Gen. Stat. § 12-407(2). Because Connecticut has since added many services to that list, confirm the current law for your service.

Q: Why does it matter whether a service is "enumerated"?
A: Connecticut's sales tax applies to services only when the statute lists the specific category. A service that is not on the enumerated list falls outside the tax.

Q: Does delivering the work by computer or on tape make it a taxable computer/data service?
A: Not here. DRS treated the company's work as marketing research, not a taxable computer and data processing service, regardless of how the finished sample was delivered.

Q: Can I rely on this ruling for my research business today?
A: Not by itself. It was issued to one taxpayer on 1991 law, and the taxable-services list has grown since. Use it as reasoning, and verify the current statute for your specific service.

Citations and references

Statutes:

  • Conn. Gen. Stat. § 12-407(2) — defines the services whose rendering is a taxable "sale"; a service not specifically enumerated is not subject to sales and use tax

Related DRS guidance:

  • Ruling 94-9 later cited this Ruling.

Source

Original ruling text

Ruling 91-17, Marketing Research

Ruling 91-17

Marketing Research

This Ruling has been cited in   Ruling 94-9

FACTS:

The Company provides survey research sampling services. The Company prepares random samples drawn from demographic groups and geographic regions specified by its clients, which use the samples to conduct surveys over the telephone, by mail or in person. The Company begins with a large database drawn from sources such as telephone listings, zip codes, SIC codes, census data, periodical subscription lists and other public information. It then tailors the sample according to its clients' specifications through the use of computers and statistics. The form of the delivery of the final product to the clients varies: it may be transmitted directly to the client's computers by modem or sent on computer printed forms, magnetic tapes or mailing labels.

ISSUE:

Is the Company's survey research sampling service subject to sales tax?

RULING:

The Company provides marketing research services which are not specifically enumerated under §12-407(2) of the Connecticut General Statutes, and which therefore are not subject to sales and use taxes.

LEGAL DIVISION

May 9, 1991

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