A memorandum has been issued by the New York Department of Taxation and Finance regarding the state and local sales tax liabilities of telecommunications services purchased by an Internet Service Provider (“ISP”). As a result of a Tax Appeals Tribunal decision, line access services purchased by an ISP and used for transmission between the ISP point of presence and the Internet for the purpose of connecting the ISP’s customers to the Internet are purchases of interstate or international telephony and, therefore, are not subject to sales tax. A telecommunications service provider must collect sales tax on intrastate telephony unless it receives a timely and properly completed exemption document from an ISP. Additional rules and regulations apply. (TSB-M-07(2)S, Technical Services Bureau, Taxpayer Services Division, New York Department of Taxation and Finance)