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Ruling 91-1

Litigation Support Services

This Ruling has been obsoleted by AN 94(4)

An accounting firm (firm) has inquired as to whether consulting services rendered to law firms in the form of litigation support services are subject to sales and use tax in the following situations:

Situation #1: A firm is hired by a law firm and bills that law firm for its services. These services comprise consulting to the law firm with the provision that the accounting firm may be expected to provide expert testimony at a later date. The type of consulting services consist of (a) reviewing documents and materials to gain an understanding of the facts in the case, (b) performing independent research to obtain relevant economic financial and business data, (c) analyzing the available information and forming expert opinions, (d) presenting these opinions in exhibits at depositions or trials on the economic and financial matters related to the case, and (e) advising and assisting the attorneys on interrogatories, depositions of others, and trial preparation.

Situation #2: The accounting firm would be hired by a law firm initially but its engagement letter, for essentially all services mentioned above, would be between the accounting firm and an insurance company who is representing the defendant in a matter, i.e., the insurance company has hired the law firm and has hired the accounting firm to be consultants to that law firm and is paying the accounting firm's bill. The accounting firm would be billing the insurance company directly and would be paid by them, although all their work product and consulting functions would be for the benefit of the law firm.


The litigation support services rendered by an accounting firm described herein are not subject to sales and use tax under Section 12-407(2)(i)(J) of the General Statutes as "business analysis, management, management consulting and public relations services."


January 17, 1991