Substitute House Bill No. 5772

Public Act No. 00-227

An Act Concerning Fulfillment Sales Companies.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (15) of section 12-407 of the general statutes is repealed and the following is substituted in lieu thereof:

(15) (A) "Engaged in business in the state" means and includes but shall not be limited to the following acts or methods of transacting business: [(A)] (i) Selling in this state, or any activity in this state in connection with selling in this state, tangible personal property for use, storage or consumption within the state; [(B)] (ii) engaging in the transfer for a consideration of the occupancy of any room or rooms in a hotel or lodging house for a period of thirty consecutive calendar days or less; [(C)] (iii) rendering in this state any service described in any of the subdivisions of subsection (2) of this section, as amended; [(D)] (iv) maintaining, occupying or using, permanently or temporarily, directly or indirectly, through a subsidiary or agent, by whatever name called, of any office, place of distribution, sales or sample room or place, warehouse or storage point or other place of business or having any representative, agent, salesman, canvasser or solicitor operating in this state for the purpose of selling, delivering or taking orders; [(E)] (v) notwithstanding the fact that retail sales are made from outside this state to a destination within this state and that a place of business is not maintained in this state, engaging in regular or systematic solicitation of sales of tangible personal property in this state [(i)] by the display of advertisements on billboards or other outdoor advertising in this state, [(ii)] by the distribution of catalogs, periodicals, advertising flyers or other advertising by means of print, radio or television media, or [(iii)] by mail, telegraphy, telephone, computer data base, cable, optic, microwave or other communication system, for the purpose of effecting retail sales of tangible personal property, provided one hundred or more retail sales from outside this state to destinations within this state are made during the twelve-month period ended on the September thirtieth immediately preceding the monthly or quarterly period with respect to which liability for tax under this chapter is determined; [(F)] (vi) being owned or controlled, either directly or indirectly, by a retailer engaged in business in this state which is the same as or similar to the line of business in which the retailer so owned or controlled is engaged; [(G)] (vii) being owned or controlled, either directly or indirectly, by the same interests that own or control, either directly or indirectly, a retailer engaged in business in this state which is the same as or similar to the line of business in which the retailer so owned or controlled is engaged; [(H)] (viii) being the assignee of a person engaged in the business of leasing tangible personal property to others, where leased property of such person is situated within this state and such assignee has a security interest, as defined in subsection (37) of section 42a-1-201, in such property; and [(I)] (ix) notwithstanding the fact that retail sales of items of tangible personal property are made from outside this state to a destination within this state and that a place of business is not maintained in this state, repairing or servicing such items, under a warranty, in this state, either directly or indirectly through an agent, independent contractor or subsidiary.

(B) A retailer who has contracted with a commercial printer for printing and distribution of printed material shall not be deemed to be engaged in business in this state because of the ownership or leasing by the retailer of tangible or intangible personal property located at the premises of the commercial printer in this state, the sale by the retailer of property of any kind produced or processed at and shipped or distributed from the premises of the commercial printer in this state, the activities of the retailer's employees or agents at the premises of the commercial printer in this state, which activities relate to quality control, distribution or printing services performed by the printer, or the activities of any kind performed by the commercial printer in this state for or on behalf of the retailer.

(C) A retailer not otherwise a retailer engaged in business in the state who purchases fulfillment services carried on in this state by a person other than an affiliated person, or who owns tangible personal property located on the premises of an unaffiliated person performing fulfillment services for such retailer shall not be deemed to be engaged in business in the state. For purposes of this subparagraph, persons are affiliated persons with respect to each other where one of such persons has an ownership interest of more than five per cent, whether direct or indirect, in the other, or where an ownership interest of more than five per cent, whether direct or indirect, is held in each of such persons by another person or by a group of other persons who are affiliated persons with respect to each other. For purposes of this subparagraph, "fulfillment services" means services that are performed by a person on its premises on behalf of a purchaser of such services and that involve the receipt of orders from the purchaser of such services or an agent thereof, which orders are to be filled by the person from an inventory of products that are offered for sale by the purchaser of such services, and the shipment of such orders to customers of the purchaser of such services.

Sec. 2. Section 12-407c of the general statutes is repealed and the following is substituted in lieu thereof:

If any person described in subdivision (e) of subsection (12) of section 12-407 is acting in concert with any person described in subdivision (f) of said subsection, the Commissioner of Revenue Services, in [his] the commissioner's discretion, may deem and treat such persons as principal and agent, respectively, when [he] the commissioner deems it necessary for the efficient administration of this chapter and may hold such persons jointly and severally liable for the collection and payment of the taxes imposed by this chapter. An unaffiliated person providing fulfillment services, as defined in subparagraph (C) of subsection (15) of section 12-407, to a purchaser of such services shall not be treated as a retailer by the commissioner under this section with respect to such activity.

Approved June 7, 2000