This Policy Statement has been modified and superseded by PS 2001(8)
Taxation of Internet Access Provided by
|Sales of services occurring:|
|on or after||through||rate|
|July 1, 1997||June 30, 1998||5%|
|July 1, 1998||June 30, 1999||4%|
|July 1, 1999||June 30, 2000||3%|
|July 1, 2000||June 30, 2001||2%|
|July 1, 2001||June 30, 2002||1%|
|July 1, 2002||0%|
INTERNET ACCESS CHARGES MUST BE SEPARATELY STATED FROM CHARGES FOR CATV SERVICES: A CATV company that provides Internet access should charge sales and use taxes for such services at the reduced rate for computer and data processing services, if the company bills separately for Internet access, or separately states such charges from charges for CATV services on its bills to its customers.
Separately-stated charges for installation and other computer services that relate solely to Internet access are also taxable at the reduced rate for computer and data processing services. Charges that relate to CATV services or to both Internet access and CATV services are subject to tax at the full 6% rate.
If a CATV company does not separately state charges for Internet access from charges for CATV services on its bills to its customers, all charges are presumed to be charges for CATV services enumerated in Conn. Gen. Stat. §12-407(2)(l), and are subject to sales and use taxes at the full 6% rate.
CHARGES FOR TANGIBLE PERSONAL PROPERTY: Any separately-stated charges to customers for the sale or rental of tangible personal property (such as computer hardware, equipment or prewritten software) in connection with Internet access provided by a CATV company are subject to sales and use taxes at the full 6% rate.
If a CATV company purchases tangible personal property and separately states charges to its customers for the sale or rental of such property, it may purchase the property on resale. However, if a CATV company provides tangible personal property to its customers in connection with services and does not make a separate charge for the property, the CATV company is the consumer of the property and must pay sales or use tax when it purchases the property.
EFFECT ON OTHER DOCUMENTS: This Policy Statement amplifies Policy Statement 98(2), Sales and Use Taxes on Access to the Internet and Other On-Line Sales of Goods and Services.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. Unlike a Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts but it may be referred to for general guidance by taxpayers. Unlike a Special Notice, it does not announce a new policy or practice in response to changes in state or federal laws or regulations or to judicial decisions.
FOR FURTHER INFORMATION: Please call the Department of Revenue Services during business hours, Monday through Friday:
FORMS AND PUBLICATIONS: Forms and publications are available all day, seven days a week:
CATV gross earnings tax
Sales and use taxes