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Small Business Human Resources Workforce Development Your Questoins Answered Success Stories

July/August 2003 — Vol. 81, No. 6

Your Questions Answered

Have a personnel-related or business tax question? Members can get free information from CBIA’s experts. The phone number is 860–244–1900.

 

Q: My company is considering adding domestic partner coverage to our health plan. We now pay 100% of an employee’s premium and 50% of the premium for dependents. We’re thinking of paying only 30% for domestic partners’ coverage. Can we do that?

A: No law requires employers to provide equal benefits coverage to domestic partners, but Connecticut does have a law prohibiting discrimination on the basis of sexual orientation. What you’re proposing could potentially expose your company to a lawsuit under that law. If you opt to offer health coverage to domestic partners, you would be safer to offer the same coverage as you do for legal dependents.

One other thing you should know: Under federal and state COBRA laws, continuation of health benefits is required only for qualified employees and their legal dependents. Since neither Connecticut nor federal law recognizes same-sex or common-law marriages, a domestic partner would not be a legal dependent; therefore, you would not have to offer COBRA benefits to a domestic partner.

Q: We’re covered by the federal Family and Medical Leave Act (FMLA). The wife of one of our employees just had a baby. I know the employee would be entitled to take 12 full weeks off to bond with the baby, but he wants to take the time as “reduced” leave, perhaps using one or two days each week. Are we required to let him have this schedule?

A: No. Under the FMLA, reduced leave is a reduction in the number of hours an employee works daily or weekly. Employers are required to offer this type of leave for a reason involving a serious health condition (the employee’s or a family member’s). Otherwise, reduced leave may be taken only if the employer agrees to it. Intermittent leave, which is leave taken periodically in separate blocks of time, is subject to the same rules as reduced leave. Unless the employee’s wife or child has a serious health condition, he is not entitled to reduced or intermittent leave.

Q: We are working to provide a job accommodation for an employee with a disability. One of our supervisors said he has heard about a resource called JAN that might help us. What is JAN?

A: It’s the Job Accommodation Network, sponsored by the U.S. Department of Labor. JAN gives employers and employees free information about appropriate accommodations for specific individuals and jobs. It also provides information on the employment provisions of the Ameri-cans with Disabilities Act and on resources for technical assistance, funding, education, training and services related to the employment of people with disabilities. JAN recently established the Searchable Online Accommodation Resource (SOAR), a database of accommodation information drawing on the more than 250,000 cases that JAN has handled. For more information visit JAN’s Web site or call 800–526–7234 (voice and TYY).

Q: If our Connecticut company performs media advertising services for a Colorado client, is there Connecticut sales tax liability? Also, we receive commissions from various publications for placing our clients’ ads in their magazines. Since advertising time and space are not taxable, we assume that commissions paid in connection with the renting of ad time or space are not taxable as well. Is that correct?

A: In regard to your first question: In general, media advertising services are taxable based on where the advertising is disseminated. If the benefit and use of the service occurs in Connecticut, it doesn’t matter if your client is from Colorado — your services are taxable under Connecticut law.

As to your second question, the commissions advertising companies receive from publications for placing ads on behalf of their clients are considered to be taxable mark-ups by the Department of Revenue Services (DRS) at the rate of 3%. These payments can take many forms. For example, let’s say your client was charged $5,000 by the publication to place an ad in its magazine, and the publication paid you $500 as a commission. The DRS would interpret the transaction as $4,500 worth of nontaxable time and space, and $500 worth of taxable mark-up on which you would owe 3% tax.

If you have other questions on the recent sales tax changes, see Special Notice 2003(6) on Media Advertising and Cooperative Direct Mail Advertising at the DRS Web site.

 

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