The New Jersey Division of Taxation ruled that fees for Voice Over Internet Protocol (VOIP) services that were charged to in-state customer service addresses were subject to sales tax. The state’s tax code imposes a tax on receipts from every…
Maryland States Tax Was Due on 900-number Services
A Maryland Tax Court ruled that a company was responsible for taxes on 900-number communications services it provided because the services were taxable and the provider was a vendor or an agent.
Arizona Finds Telephone Directory Equipment Taxable.
In a ruling issued by the Arizona State Board of Tax Appeals it was found that equipment leased to a telephone directory assistance provider was subject to transaction privilege and use tax. The Board ruled that the definition of exempt…
Pennsylvania Provides Guidance On Call Center Credit.
The Pennsylvania Department of Revenue has issued a sales tax bulletin offering guidance on the state sales and use tax credit available to call centers. According to the bulletin, the credit is for gross receipts taxes paid by a telephone…
South Carolina enacts significant changes in municipal charges to telecommunications providers.
South Carolina recently enacted legislation to further define service address and postpaid calling service. The legislation added language to the definition of service address to specify that a sale of postpaid calling services is sourced to the origination point of…
Indiana assesses sales tax on the sale of prepaid voice over internet calling cards.
The Indiana Department of Revenue issued a Letter of Findings denying a taxpayer\’s request for abatement of sales tax assessed on the sale of prepaid voice over internet calling cards.
Missouri Manufacturing Exemption Can Be Applied to Telephone System Components.
A Missouri Hearing Commission found that telephone system components were eligible for the Missouri manufacturing exemption from use tax. The Missouri Supreme Court had previously ruled that the telephone service qualified as the manufacturing of a product and referred the…
US District Court Rules on Telephone Service
The United States district court ruled that a telephone service provider was entitled to a refund of federal excise tax since the service provided did not fall under the definition of “toll telephone service.” The taxed service is defined as…
Ohio Defines Private Communications Services to Conform With SSTP
The State of Ohio has redefined “private communications services” to conform to the streamlined sales tax project and provides the criteria for sourcing. Four rules are provided to determine sourcing. This change is effective November 4, 2004. (OAC 5703-9-26, Ohio…
Texas Tax Preempted by Federal Law, Court Rules.
The U.S. Court of Appeals held that a federal law preempted the assessment by the Texas Public Utility Commission. The FCC was authorized to impose a fee on interstate service providers to fund federal programs and states were authorized to…
Federal Government Will Continue to Collect Excise Tax.
The IRS released a statement addressing the excise tax levied under ยง 4251 of the Internal Revenue Code.
Tennessee Explains Expanded Call Center Exemption
The Tennessee Department of Revenue clarified the implications of a new, expanded exemption. The new exemption provides that international telecommunication services sold to a business for use in a call center are now exempt. New exemption certificates will be mailed…
Minnesota Court Rules in Favor of XO Communications
The Minnesota Tax Court has ordered the Commissioner of Revenue to review the claims of XO communications and to issue refunds and interest.
Charges for nontaxable communications services in D.C. to be excluded from sales price.
Even if the nontaxable communication services are not separately stated from the taxable services, they will not be included in the term \”sales price\” as long as the vendor can reasonably identify them in its books and records.
Indiana telecommunication services bundled with taxable services can still be exempt.
Nontaxable telecommunication services that are bundled with other taxable service charges can still be considered exempt from sales tax.
Virginia General Assembly Proposes Changes to Telecommunications Tax.
The General Assembly of Virginia has proposed a restructuring of state and local telecommunication taxes and fees so that the tax burden will fall equally on all users of the telecommunication services. Providers of telecommunication services within the state have…
Massachusetts Corporation Eligible For Abatement When Selling “Multi-Product” Services at a Discount
A corporation in Massachusetts which sold multi-product services and separately stated each service on the invoice, was eligible to apply for an abatement of overpaid sales taxes collected and remitted.
Minnesota Exempts Telecom Purchases
Minnesota exempts capital equipment purchased for use in providing local exchange, wireless, and long-distance services.
Pennsylvania taxes cellular service providers.
The Pennsylvania Supreme Court determined that cellular telecommunications providers did not qualify for the sales/use tax exemption provided for manufacturers or public utility providers because the cellular providers did not produce “tangible personal property.” The providers converted sound waves into…
Indiana taxes the long distance portion of bundled telecom services.
Effective March 9, 2004, all income from the sale of bundled telecommunications services is subject to Indiana sales tax.
Washington bundled telecommunication services not taxable.
Effective June 10, 2004, Washington law allows exempt charges for telephone services to keep their exempt status when combined with charges for taxable services. In order for the exemption to stand, the provider must be able to determine what portion…
South Carolina, Virginia issue guidelines on taxability of calling cards. The South Caroline Department of Revenue has determined that prepaid calling cards to be used with land-based phones are
“not subject to sales tax since this transaction is not a sale of tangible personal property. The transaction is merely the exchange of money for an intangible evidence of a future right to telephone service. The taxable transaction takes place…
New York identifies telecommunications equipment as real property.
The Supreme Court held in favor of the state. The taxpayer failed to list its communications equipment inventory in detail. This led to the equipment being classified as taxable real property. A state court took this to imply that the…
The Tennessee Supreme Court supports the Appellate Court’s decision that online information services do not constitute taxable telecommunications services.
In this case, the true object test was used to determine whether the item being sold in the transaction was information or telecommunications services. The court held that the object of the sale was information because the vendor sold Internet…