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Ruling 92-3

Sales and Use Taxes Advertising Services Business Public Relations Services


The Company provides a personalized advertising service for over 100,000 sponsoring commercial businesses and professionals in the medical, dental, health care, legal and animal care fields. The Company has its home office in Tennessee but employs local managers and representatives throughout the United States.

The Company carries out its business in the local communities through its commission-paid employees (which it refers to as "Representatives"). The Company delivers sales information on behalf of its business and professional sponsors to people who have moved, newly engaged women, new parents and new United States citizens. During these presentations, usually made in the home, the Representative delivers sales messages about the sponsors' goods and services. The Representative also presents the sponsor's imprinted advertising specialty item and an invitation card which offers the call recipient the opportunity to visit the sponsor's place of business and receive a free gift "sample" of the sponsor's products or services. There is some variation in the services provided for professional sponsors. The Company bills the sponsors at a flat rate on a per-household basis.

The only assistance that the Company provides to the sponsors in developing the sponsors' sales messages is to provide them with literature advising them that certain clichés (e.g., "open 24 hours a day" or "sell fresh fruit") are appropriate sales message information, and to provide the sponsors with sample invitation cards used by other sponsors as models to develop the message. The sponsor is responsible for developing the message and the Company's representatives are responsible for its delivery to the call recipients.


Whether the services rendered by the Company are either taxable business public relations services or advertising or public relations services.


Regulation §12-407(2)(i)(J)-1(g) defines "business public relations services" as including "the preparation of materials, written or otherwise, that are designed to influence the general public or other groups by promoting the interests of a service recipient..." The Company is involved in the distribution of such materials, not in their preparation, and therefore its services are not taxable business public relations services.

Section 12-407(2)(i)(W) of the Connecticut General Statutes imposes sales and use taxes on "advertising or public relations services, including layout, art direction, graphic design, mechanical preparation or production supervision..." The Department has interpreted this statute as intending to impose tax on the dissemination of advertising materials only where the advertiser's business is also the creation of advertising materials for its customers. The Company's service involves only the dissemination of advertising. It is not in the business of creating advertising materials for its customers.


The Company's services are not subject to sales and use taxes under §12-407(2)(i)(J) of the Connecticut General Statutes as business public relations services, nor are they subject to sales and use taxes under §12-407(2)(i)(W) as advertising services.


March 24, 1992