Ruling 89-195

Maintenance

This Ruling has been revoked by PS 93(3)

Employment and personnel services are subject to sales and use tax pursuant to section 12-407(2)(i)(C) of the Connecticut General Statutes.

If Company X operates a referral service to clean private homes whereby it directly receives commissions form the self-employed contractors for referrals and the independent contractors directly receive payment from the residents for cleaning their homes, then the referral service is taxable as an employment service. In this situation, the commissions that you charge the independent contractors for referrals to clean private homes are subject to the sales and use tax and the compensation received by the independent contractors from the residents is not taxable.

The total gross receipts for cleaning private homes are taxable janitorial services pursuant to section 12-407(2)(i)(AA) of the Connecticut General Statutes, as amended by Public Act No. 89-251.

If Company X operates a cleaning service whereby it charges the residents for cleaning their private homes and furnishes compensation to the self-employed independent contractors for performing the cleaning work, as well as retaining a commission for its services, then the total gross receipts are subject to the tax. The payments provided to the independent contractors are not taxable.

Company X advertises under "house cleaning" in the telephone book. Based on available information, you appear to be operating a cleaning service.

LEGAL DIVISION

November 8, 1989