While Connecticut has long had a Computer and Data Processing Services tax, it used to exclude what we do here at Zero Gravity Marketing. Now, some of our services qualify for this 1% tax, and we think you should know about it.
What is the Connecticut Website Tax?
You expect to pay sales tax whenever you buy something, but when you are paying for a service, sometimes you are taxed and sometimes you are not. This is thanks to the extremely detailed and specific Connecticut tax laws that are divided into industries. As far as our business is concerned, the Computer and Data Processing Services section—Conn. Gen. Stat. §12-407(a)(37)(A)—is the one we need to pay attention to, and it changed on October first. Now, many of our website services are required to include a 1% tax.
Which services are included in the Connecticut Website Tax?
This is where it gets tricky. We offer a lot of different services at Zero Gravity Marketing, such as website design, hosting, SEO services, and even direct mail marketing. So if you sign on for more than one of these (thank you!), you will notice that not all of them include this additional 1% tax. To paraphrase the Connecticut website tax, the services that are now taxable include anything that has to do with setting up a website, designing or developing a website, or hosting and maintaining a website.
So while we do have to tax you the extra one percent on our responsive website designs and hosting services, you would not have to pay the Connecticut website tax on SEO services.
I thought website services were excluded from the Computer and Data Processing Services tax?
If you do a quick Google search for “computer and data processing services tax Connecticut” then you will be shown the old results first. It is the official website for the Department of Revenue Services for the State of Connecticut, and when you scroll to the bottom you see that it was updated this year. So when you read the line about the creation, hosting, and maintenance of a website as being excluded from the Computer and Data Processing Services tax, you might think it is accurate. However, if you click on the included applicable link, you can see that the information hasn’t been updated since March 2007. Yes, it’s confusing. But trust us, we would not charge you the one-percent tax if we didn’t have to.
For more information on the new Connecticut website tax, or to find out what our website services are all about, contact Zero Gravity Marketing.
Tim Dugan
