Q. How do I report the 1% tax on computer and data processing services on the Sales and Use Tax Return?

A. Report the total gross receipts of the sale of computer and data processing services on Line 3 of Form OS-114, Sales and Use Tax Return. Then follow the instructions for Line 74 of the return. Multiply the applicable gross receipts by .8425 and enter the result on Line 74, Column 1 That amount is added to any other deductions on the return. By reducing the gross receipts of computer and data processing services the effective tax rate is 1%.

(Updated: 2015)

This answer is intended to provide general information concerning a frequently asked question about a current position, policy, or practice associated with the taxes administered by the Connecticut Department of Revenue Services.  It may include an informal interpretation of Connecticut tax law by the Department of Revenue Services (DRS).  However, it is not intended to serve as a legal ruling.