235 Conn. 737 (1995) | Cited 0 times | Supreme Court of Connecticut | November 30, 1995

The principal issue in this tax appeal is whether a corporation that designs and orders advertising materials for cooperative direct mailing to private households has engaged in transactions that are subject

to the use tax, General Statutes § 12-411(1). 1 The, defendant, the commissioner of revenue services, as a result of an audit for the years 1984 through 1989, initially concluded that the plaintiff; Val-Pak of Central Connecticut North, Inc., was liable for payment of the sales tax as a seller of tangible personal property. 1 After a reassessment at the plaintiff's behest, the defendant recharacterized the plaintiff's activities as those of an advertising service provider that had made a taxable use of advertising materials and therefore was liable for payment of the use tax. Pursuant to General Statutes § 12-422, 1 the plaintiff appealed the reassessment to the

trial court, which rendered judgment in favor of the plaintiff. The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). We affirm the judgment of the trial court.

The parties stipulated to the relevant facts. The plaintiff is a Connecticut corporation that was engaged in the business of selling cooperative direct mail advertising services. It was a licensee or sublicensee of Val-Pak Direct Marketing Systems, Inc. (Direct Marketing), a Florida corporation.

In providing cooperative direct mail advertising services for a group of otherwise unrelated business customers, the plaintiff arranged to have printed advertisements, coupons and the like sent in a single envelope to households in a specified geographic area. After a business customer had agreed to use the plaintiffs services, the plaintiff placed orders with Direct Marketing. In accordance with the plaintiff's directions, advertising materials were then printed in Florida and mailed from Florida to the designated households. Direct Marketing billed the plaintiff for the printing and mailing services it performed. The plaintiff billed its customers for its services.

On the basis of these stipulated facts, the trial court found that the plaintiff was engaged in providing services to its customers and in purchasing services from Direct Marketing. Because the plaintiff at no time exercised any ownership rights over the advertising materials prepared and mailed by Direct Marketing, the trial court concluded that the plaintiff's transactions did not

constitute a taxable "use" of tangible property in this state. 2 Accordingly, the trial court held that the transactions in which the plaintiff had engaged were not taxable during the audit years and rendered judgment for the plaintiff. 2 This appeal followed.

Our examination of the record on this appeal, and the briefs and arguments of the parties, persuades us that the judgment of the trial court should be affirmed. The central issue of the applicability of the use tax to the plaintiff's activities during the audit years at issue was properly resolved in the thoughtful and comprehensive memorandum of decision filed by the trial court. Val-Pak of Central Connecticut North, Inc. v. Commissioner of Revenue Services, 44 Conn. Sup. 133, 670 A.2d 343 (1995). Because that memorandum of decision fully addresses the arguments raised in the present appeal, we adopt the trial court's well reasoned decision as a statement of the facts and the applicable law on that issue. It would serve no useful purpose for us to repeat the discussion therein contained. See Greater Bridgeport Transit District v. State Board of Labor Relations, 232 Conn. 57, 64, 653 A.2d 151 (1995); Advanced Business Systems, Inc. v. Crystal, 231 Conn. 378, 380-81, 650 A.2d 540 (1994); Van Dyck Printing Co. v. DiNicola, 231 Conn. 272, 273-74, 648 A.2d 877 (1994).

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