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In a policy statement, the State of Connecticut has clarified the definition of safety apparel and provided examples of equipment that is exempt from tax. Safety equipment is equipment that is worn by an employee and is designed to protect them from bodily harm. Safety equipment does not include apparel designed to protect the product being worked on, such as clean room equipment. The exemption applies to apparel that is both sold and leased. Included in the policy statement are rules that retailers can apply to purchases to aid in determining exemption. (Policy Statement 2004(4), Connecticut Department of Revenue Services, November 3, 2004)

(11/30/2004)

In a policy statement, the state of Connecticut looks at the tax issues surrounding the internet. Charges for internet access services are exempt from tax as of July 1, 2001. If a Connecticut retailer accepts online orders and ships or delivers them to a Connecticut address, the retailer is responsible to collect tax on the transaction. If a purchaser of property is not assessed tax by the retailer, they are responsible to self-assess the appropriate 6% tax. Electronically delivered software is taxable at 1%. Creation and maintenance of web sites is an exempt service. Web site providers may also be considered agents for sellers in the state, depending on the scope of the services provided. If the web site provider located in Connecticut performs other services, such as billing or collecting billing, it could be considered an agent. (Policy Statement 2004(2), Connecticut Department of Revenue Services, Nov 3, 2004)

(11/30/2004)

The Connecticut Department of Revenue Services has changed its position on whether electricity generation qualifies as “processing.” They ruled that since electricity generation does not apply materials and labor to existing tangible personal property, it is not included under the state’s definition of processing. Under the new ruling, the utility is no longer exempt. (Ruling No. 2004-2, Connecticut Department of Revenue Services, June 18, 2004)

(09/10/2004)

Effective July 1, 2004, a subscription for magazines and newspapers, including publications containing only puzzles, will be exempt from sales tax. Payments made before July 1, 2004 for a subscription period beginning before July 1, 2004 are taxable. Payments made before July 1, 2004 for a subscription period beginning on July 1, 2004 or after are fully exempt. Over-the-counter sales of magazines have been and remain subject to tax, however, over-the-counter and honor box sales of newspapers on or after July 1, 2004, are exempt. (Connecticut Department of Revenue Services Special Notice, July 16, 2004.)

(08/05/2004)

The planned phase-out in Connecticut of 1% tax on computer and data processing services was repealed. These services remain taxable at the 1% rate. (Connecticut Department of Revenue Services Special Notice, July 16, 2004.)

(08/05/2004)

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