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Senate Bill 806, which would have required every person making sales of tangible personal property or services through an independent contractor or other representative in Connecticut through an agreement under which the resident, for a consideration, directly or indirectly refers potential customers via a link on an Internet web site or otherwise died in committee. (S.B. 806 died in the committee on Revenue, Finance, and Bonding on June 2, 2009)


The Superior Court of Connecticut has overturned the Commissioner of Revenue Services’ decision that school teachers who distribute catalogs and books to students and take student orders are “representatives” who participate in an in-state “sales force” to sell, deliver, and take orders to generate revenue on behalf of an out-of-state company that sells books exclusively to schools. Although the teachers fulfill a crucial administrative role for the bookseller, this function does not elevate the teachers to the level of a “sales force” because the decision to participate in the bookseller’s program remains with the teacher, the teachers may act as customers and purchase books for their own use, and the bonus points given to the teachers as their only form of compensation are for classroom use only and stay with the classroom, not the teacher. Since it is determined that the teachers are not representatives of the bookseller, their administrative activities do not establish nexus for the bookseller.

(Scholastic Book Clubs, Inc. v. Commissioner of Revenue Services, Connecticut Superior Court, Nos. CV07 4013027 S and CV 07 4013028 S, April 9, 2009)


Effective July 13, 2005, a retailer, if not otherwise engaged in business in the state of Connecticut, which participates in trade shows at the Connecticut Convention Center does not create sales tax nexus. Such retailers, therefore, are not subject to Connecticut sales and use tax even if they have employees or other staff present at trade shows, provided that no sales are made. The retailers’ activities must be limited to displaying goods or promoting services and any orders received must be sent outside the state for acceptance and fulfillment. In addition, the retailer’s participation in the trade shows cannot exceed 14 days during the retailer’s income year for federal income tax purposes. Further regulations and rules do apply. (Revision of 1958, Title 12 Taxation, Chapter 219 Sales and Use Taxes)


Connecticut has introduced legislation that would require remote sellers with significant connection to an in-state seller to collect tax on sales into Connecticut. The primary purpose of this bill is to require Internet retailers with brick-and-mortar affiliates in Connecticut to collect and remit Connecticut sales tax. Remote sellers with the following types of affiliate relationships, who are involved in the processing of orders for customers located in Connecticut, would be deemed “engaged in business in the state.” If HB 6965 is enacted, the affiliate relationship under the new definition of “engaged in business in the state” would be created by a substantial ownership situation where either the remote seller has substantial ownership of an in-state retailer, or where the in-state retailer has substantial ownership of the remote seller. Also to qualify under the new definition, the in-state and remote retailers would be required to sell similar products using a similar business name, or the in-state retailer would need to be involved with advertising for the remote seller linked to in-state sales. If enacted, this bill would come into effect on October 1, 2005 and would apply to all sales occurring on or after that date. (HB 6965, Connecticut House of Representatives, introduced March 22, 2005)


Dell Catalog Sales has a service repair contract with BancTec USA, Inc, an unrelated computer repair company. Under the contract BancTec will perform onsite repairs for Dell Catalog Sales consumers when computer issues can not be resolved by Dell Catalog's technical support department over the phone and the customer has previously purchased a Dell service contract. Dell Catalog Sales does not have any physical presence in Connecticut. They sell computers by advertising through national media and they only accept orders in Texas placed by telephone, facsimile, mail, email, or through the internet. All Dell Catalog Sales deliveries are made through common carrier. The argument against Dell Catalog Sales was that BancTec was acting as a representative of Dell to service Dell computers. However, it was agreed that Dell had no direct control over BancTec operations. It was ruled that BancTec performed a minimal number of on-site calls based on the revenue allocations for all Dell customer service contracts. (Dell earned 90% and BancTec earned 10%) As a result, it was ruled Dell Catalog Sales does not have more than a slight presence in Connecticut and this is below the threshold necessary to establish nexus in the state. Dell Catalog Sales agrees that sales of service contracts by BancTec to Connecticut customers are taxable. (Connecticut Superior Court, Dell Catalog Sales v. Commissioner of Revenue Services., July 10, 2003.)



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