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This Ruling has been revoked by PS 93(3)

Ruling 89-253

Personnel Services

According to the information presented in your letters, Company X manages eight musical entertainment groups whereby it books and instructs musicians as to when and where their services will be rendered and what music format will be performed. Company X is owned by three shareholders. Each shareholder manages and participates in one musical group while the remaining five musical groups do not contain a shareholder participant.

Conn. Agencies Regs. §12-426-27(b)(3) provides as follows:

Employment services mean and include the procurement or offer to procure for a consideration: Jobs or positions for those seeking employment; or employees for employers seeking the services of employees.

Based on the available set of facts, Company X procures jobs for eight musical groups, inclusive of three bands with one shareholder participant. Company X operates an employment agency pursuant to Conn. Agencies Regs. § 12-426-27. Company X must apply tax to its fees for booking the bands whether it charges the clients or the bands. However, payments received directly by the bands from the third party clients are not subject to the sales and use tax.

In the event that the musicians are employees of Company X, the music broker or management services provided by Company X are considered to be personnel services pursuant to Conn. Agencies Regs. § 12-426-27(b)(3). The total gross receipts, inclusive of fees paid by the clients to the bands, are subject to the sales and use tax. The exemptions pursuant to Conn. Gen. Stat. § 12-412(62) do not apply.


December 6, 1989