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Ruling 95-6, Sales and Use Taxes / Room Occupancy Tax / Community Antenna Television Services


A company (hereinafter the "Company") contracts with hotels to offer non-cable movie services. The Company installs and maintains master antenna television systems and all other necessary transmission equipment at hotels. Hotels contracting for the Company's services place the Company's movie programming boxes in the hotels' guest rooms. If hotel guests desire, they may view the movies which the Company offers by programming the programming box accordingly. A hotel guest is then charged an amount per movie by the hotel, which is added to the hotel guest's bill from the hotel. Under the terms of the contract between the Company and a hotel, the hotel is responsible for charging the guests for the movies and for remitting to the Company the amounts charged, minus a percentage of the charges, which the hotel retains as its payment for making the service available in its guest rooms, and for collecting the fees from the guests. The Company has no written contracts with individual hotel guests.


Whether the provision of non-cable movie services at hotels is subject to sales and use taxes under Conn. Gen. Sat. §12-407(2)(l)), or the room occupancy tax under Conn. Gen. Stat. §12-408(1)(B), or both.


Conn. Gen. Stat. §12-408(1)(B) imposes the room occupancy tax on retail sales as defined in §12-407

at a rate of twelve percent with respect to each transfer of occupancy from the total amount of rent received for such occupancy of any room or rooms in a hotel ... [Emphasis added.]

Conn. Gen. Stat. §12-407(21) defines "rent" as

the consideration received for occupancy valued in money, whether received in money or otherwise, including all receipts, cash, credits and property or services of any kind or nature, and also any amount for which credit is allowed by the operator to the occupant, without any deduction therefrom whatsoever. [Emphasis added.]

The Department considers the in-room "pay per view"-type movie services which the Company offers to fall within the category of "services of any kind or nature," charges for which are subject to the room occupancy tax. Specifically, the Company's services are "community antenna television services" for purposes of the Sales and Use Taxes Act. Conn. Gen. Stat. §12-407(27) defines community antenna television services as

(1) the one-way transmission to subscribers of video programming or information that a community antenna television company makes available to all subscribers generally, and subscriber interaction, if any, which is required for the selection of such video programming or information and (2) non-cable communications service, as defined in section 16-1. [Emphasis added.]

Conn. Gen. Stat. 16-1(18) defines "non-cable communications service"

as any telecommunications service, as defined in section 16-247a, and which is not included in the definition of "cable service" in the Cable Communications Policy Act of 1984, P.L. 98-549. [Emphasis added.]

Conn. Gen. Stat. §16-247a(5) defines "telecommunications service"

as any transmission (A) between or among points specified by the user, (B) of information of the user's choosing, (C) without change in the form or content of the information as sent and received, (D) by means of electromagnetic transmission, including but not limited to, fiber optics, microwave and satellite, (E) with or without benefit of any closed transmission medium and (F) including all instrumentalities, facilities, apparatus and services, except customer premises equipment, which are used for the collection, storage, forwarding, switching and delivery of such information and are essential to the transmission.

Therefore, the services which the Company offers are "community antenna television services" under Conn. Gen. Stat. §12-407(27), notwithstanding the fact that the Company is not a franchised community antenna television company. See also Ruling No. 91-25.

The hotels are the consumers of the community antenna television services, since the hotels, and not the hotels' guests, have contracted with the Company, and since the hotels are responsible to the Company for the collection and remittance of all fees for the services, and since the Company's services are available to hotel guests only by virtue of their being paying guests of the hotel. Under these circumstances, the Company is actually providing its services to the hotels, and not directly to the guests. The hotels are thus liable for the six percent sales and use taxes on such services. See Policy Statement 92(15.1), page 2. The entire amount passed through to the guests for the services is subject to such tax, and the percentage of the fees retained by the hotels is not deductible from the taxable sales price, since that percentage represents a fee for a separate service, that of the hotels' making the movies available in their guest rooms, and collecting and remitting the fees to the Company.

In addition, the charges made for the movies by the hotels to their guests are subject to the room occupancy tax under Conn. Gen. Stat. §§12-407(2)(h) and 12-408(1)(B), because they constitute consideration for additional services provided by the hotels to the guests, whether or not the charges for such services are separately stated and regardless of the contractual arrangements between the Company and the hotels.


The provision of non-cable movie services to hotels is subject to sales and use taxes under Conn. Gen. Stat. §12-407(2)(l), and the hotels are the consumers of such services. For purposes of the room occupancy tax, amounts received by the hotels from their guests for the movie services are also part of the "rent" for room occupancy, under Conn. Gen. Stat. 12-407(21).


April 25, 1995