Response
December 14, 1989
December
14, 1989
XXXXX
Re:
Advisory Opinion - 900 Commercial Services
Dear
Mr.XXXXX:
This
letter is in response to your October 2, 1989 request for an advisory opinion
on the various products or services in connection with your 900 Commercial
Services. It is the policy of the Tax Commission to refer such requests to it's
division most qualified to analyze the request to make recommendations for
rendering an opinion. Your request was referred to the Auditing Division whose
recommendations are as follows:
1. Sales Tax Rule R865-19-90S was issued on
March 17, 1989 with an effective date of July 1, 1988, copy attached. This rule defines telephone service very
broadly.
2. Responding to your Part III, Item 1, sales
tax is due on amounts collected from 900 sponsors unless the sponsor is an
exempt entity.
3. Responding to your Part III, Item 2, XXXXX
is not required to collect tax on billing and collection services. Such
services, by themselves, are not taxable and it is our opinion that the portion
of the charge which relates to the telephone call is incidental to the service
provided. We believe the service comes within the intent of Sales Tax Rule
R865-19-70S.
4. Responding to your Part III, Item 3, sales
tax is due on charges to end users for telephone service to receive information
or make a selection for products 1-5. The charge is for use of the phone lines
on signals and comes within the scope of Rule 90S.
5. Responding to your Part III, Item 4, XXXXX
is a representative of the 900 sponsor and, therefore, jointly responsible with
the 900 sponsor for collection of sales or use tax. As pointed out in your
discussion, a vendor is required to be licensed and collect tax unless the only
means of solicitation is by U.S. mail and the only means of delivery is by the
U.S. mail or common carrier.
a.
In an Attorney General Opinion rendered October 18, 1979, dealing with sales
tax on magazine subscriptions, it was stated that the Tax Commission could hold
either the out of state publisher or his instate representative responsible for
the tax. He said it would seem more efficient to look to the person collecting
the magazine subscription price for the collection of the tax as well.
b. Code Section 59-12-102(9) also gives the Tax
Commission authority to treat a representative, and you are a representative,
as a retailer.
6. Responding to your Part III, Item 5, if tax
is remitted to the 900 sponsor the Tax Commission would look first to the 900
sponsor. However, as indicated in 5a, above, XXXXX could be held liable.
7. Responding to your Part III, Item 6, if
XXXXX collects and remits tax from end users, but fails to collect the required
amount, XXXXX is liable for the difference.
Reference is made to Sales Tax Rule R865-19-16S
8. Responding to your Part III, Item 7, if the
tax collected exceeds the true liability, the person who collected the tax,
whether it is XXXXX, the XXXXX, or the 900 sponsor, is required to remit the
total amount collected, including any excess.
9. For your information, the 1990 Utah
Legislature is going to address the telecommunication issue. Legislative results could have a bearing on
these answers.
Based
on the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously,
if there are deviations from these facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah Supreme Court. A notice of
appeal rights is attached.
For
the Commission,
Joe
B. Pacheco
Commissioner
October 2, 1989
XXXXX
Utah State Tax Commission
Administrative Division
5th Floor
Heber M. Wells Office Building
160 East 300 South
Salt Lake City, UT 84134
Re: Request for an Advisory Opinion
Dear XXXXX:
PART I. INTRODUCTION
XXXXX is a corporation organized and existing under and by virtue of
the laws of the State of Delaware, with its principal office located in
Washington, D.C. XXXXX, XXXXX, XXXXX, and XXXXX are wholly owned operating
subsidiaries of XXXXX. XXXXX and its
subsidiaries are hereinafter collectively referred to as XXXXX. XXXXX
respectfully requests the Utah State Tax Commission ("Commission") to
issue an Advisory Opinion with respect to certain tax consequences resulting
from the proposed introduction of a new service: 900 Commercial Service.
PART II. FACTS
XXXXX is planning to introduce a Domestic 900 Commercial Service. 1/
The 900 Service offering is a switch based interactive service. The service
permits XXXXX's customer ("900 Sponsor") to receive telephonic
communications from callers located in all or a limited portion of the country.
Through use of the 900 Service, the 900 Sponsor will be able to offer various
services or goods for a fee to callers ("End Users") calling its 900
number or to receive donations from such End Users. As part of the 900 Service,
XXXXX will offer billing and collection services to the 900 Sponsor.
The XXXXX charge to the 900 Sponsor for the 900 Service will be made up
of two functional components that will appear as one charge. The first
component of the charge will represent the cost of the communications service
which XXXXX is providing to the 900 Sponsor. This service is similar to
Domestic 800 Service functionally. 2/ The second component of the charge will
represent the cost of billing and collection services for the 900 Sponsor.
XXXXX presently intends to bill these two components, pursuant to a tariffed
rate filed with the Federal Communications Commission ("FCC") 3/ at a
flat charge to the 900 Sponsor of 40 cents for the first minute and 4 cents for
each additional 6 second period. The amount of these charges is subject to
change. The two components will not be separately charged to the 900 Sponsor,
although a 900 Sponsor could break-out the cost of each component by
referencing XXXXX's tariffed rate for 800 Service.
The End User will pay an advertised fee established by the 900 Sponsor
for placing a call to the 900 number. XXXXX will not determine what this rate
will be. The End User charges for goods or services provided by the 900 Sponsor
will be collected by XXXXX or its agents. If the End User is an XXXXX long
distance customer, XXXXX will bill and collect the charge. If the End User is
not an XXXXX customer, 4/ XXXXX will collect the charges by providing the Local
Exchange Carrier ("LEC") with the billing information. The LEC will
in turn bill the charge along with other XXXXX long distance traffic and remit
the amounts collected to XXXXX. XXXXX will pay over to the 900 Sponsor the amounts
billed, offset by:
(i) the amount due XXXXX from the 900 Sponsor for the communications
service; (ii) the amount due XXXXX from the 900 Sponsor for the billing and
collection service; and,
(iii) an amount estimated to equal the uncollected amount billed End
Users. In addition, XXXXX or a XXXXX may undertake the collection of Utah sales
taxes on products or services furnished to End Users even though XXXXX does not have a legal responsibility
to do so. Taxes so collected will either:
(i) be paid over directly by XXXXX to the Commission, or
(ii) be turned over to the 900 Sponsor for it to remit to the
Commission along with its filing of sales tax returns. In the former case, the
remaining net balance will be remitted by XXXXX to the 900 Sponsor. The
offsetting of the amounts received by XXXXX from End Users by the amount owed
by the 900 Sponsor to XXXXX for services is being done solely for
administrative convenience. The 900 Sponsors have a separate, legal liability
to pay for XXXXX's communication and billing and collection services. That
liability is not affected by whether the End Users pay their bills for the 900
Sponsor's goods or services.
Although an unlimited number of products or services may be offered by
the 900 Sponsors, XXXXX can envision at least six (6) basic products or service
categories which may be offered. These product or service categories can be
identified as follows:
Product 1: The 900 Sponsor will conduct an informal opinion poll. By
telephoning a selected number, the End User will be able to express an opinion
without speaking. Typically, the End User will be billed a nominal charge ($.50
- $1.00) for making the call. For example, a news program will pose a question
to its viewers. One telephone number will be established for affirmative responses
and a second number will be established for negative responses. Another example
of this type of product would be where the End User answers a number of
questions by use of a touch-tone telephone. To express an answer to a specific
question the End User will push the appropriate number on his telephone which
corresponds to the answer.
Product 2: The 900 Sponsor will provide a recorded message service. The
End User will be able to telephone the selected telephone number to listen to a
prerecorded message. The End User will be billed a charge (either fixed or
variable based on the elapsed time of the call), which is established by the
900 Sponsor. For example, this service could include what is commonly referred
to as dial-a-prayer, dial-a-recipe, news-line or sports-line.
Product 3: The 900 Sponsor provides a financial or information service
to an End User. The End User, by telephoning a selected number (and entering an
account number and/or a personal identification number) will be able to access
various data files through the use of a touch-tone telephone. The End User may
be charged either a fixed or variable amount (based upon the elapsed time of
access to the service). For example, a bank may offer its customers access to
various account balance information over the telephone. The customer would call
the 900 number and enter a special access code to retrieve the data.
Product 4: The 900 Sponsor will provide an interactive conversation
with one person, or a party call with a number of other End Users. The End User
will be charged a flat fee for the first minute plus an additional charge for
each additional minute. Examples of
this type of service include telephoning an attorney for legal advice or
calling an astrologer to receive a personal forecast. Another example may also
include a service such as "teen-line", where the End User dials into
a "party line" to talk to other teenagers living throughout the
United States.
Product 5: The 900 Sponsor will be a charitable organization. By
calling the selected telephone number an End User will be able to make a pledge
or gift to the 900 Sponsor's organization. These organizations could include
either charitable organizations exempt from federal income tax under IRC
Section 501(a) or non-exempt organizations. Different numbers may be
established for different pledge or gift amounts. For example, through a
telephone or by the use of other media, a 900 Sponsor may seek pledges by
having viewers call a specified number for pledges of one amount (e.g., $10) and
another number for pledges of another amount (e.g., $20). In conjunction with
the pledge, the 900 Sponsor may have a pre-recorded message thanking the End
User. In addition, the 900 Sponsor
might provide the End User with some acknowledgment of the donation such as a
commemorative book or token.
Product 6: The 900 Sponsor will be a dealer of goods. The 900 Sponsor
will advertise a product. The End User will telephone a selected telephone
number for each product. The End User may provide the 900 Sponsor with his name
and address. The 900 Sponsor will deliver the merchandise, and the End User
will be billed for the merchandise on his telephone bill. For example, a
television shopping network may sell items such as a blender or a fishing rod
by having End Users call a specified number.
XXXXX may contract with a 900 Sponsor to charge applicable Utah sales
taxes to the End User. In such an event, XXXXX will bill, or cause the XXXXX to
bill, sales taxes on the product or service furnished to the End User. The
amount of sales taxes received by XXXXX (or by the XXXXX which, in turn, will
pay this amount over to XXXXX) will either be remitted to the 900 Sponsor or
paid to the Commission.
PART III. SALES TAX
ISSUES PRESENTED
1. Whether XXXXX is required to
charge the 900 Sponsors sales tax on amounts collected for telephone
communication services provided to 900 Sponsors.
2. Whether XXXXX is required to
charge sales tax on amounts received for billing and collection services
provided to 900 Sponsors.
3. Whether $$$$$$ (or the
XXXXX) is required to charge sales tax on amounts received from End Users for
Products 1-5.
4. With respect to Product-6,
involving the use by 900 Sponsors of XXXXX's telephone lines to receive orders
for tangible personal property:
a. If the 900 Sponsor is a
vendor (either in state or interstate), who is responsible for collecting the
sales tax, whether XXXXX (or the XXXXX) is treated as a representative of the
900 Sponsor and, therefore, jointly responsible with the 900 Sponsor for the
collection of sales tax.
b. If the 900 Sponsor, on its
own, would be treated as an interstate vendor who is exempt from collecting
sales tax because it lacks sufficient nexus with the State of Utah to be
subject to tax, whether XXXXX's provision of telephone service and, with the
XXXXX, billing services make either XXXXX (or the XXXXX) a representative or
agent of the 900 Sponsor, therefore providing the 900 Sponsor with sufficient
nexus to subject the 900 Sponsor to tax.
5. If XXXXX or the XXXXX bills
End Users Utah sales taxes for any products or services and such taxes are
remitted to the 900 Sponsor, whether XXXXX (or the XXXXX) has any liability in
the event that the 900 Sponsor does not discharge its sales tax liability.
6. If XXXXX or the XXXXX bills
End Users Utah sales taxes for any product or services and the taxes are
remitted by XXXXX to the Commission, whether XXXXX (or the XXXXX) has any
liability if the amount of ultimate sales tax liability exceeds the amount of
taxes received by XXXXX or the XXXXX.
7. If the sales taxes collected
by XXXXX or the XXXXX from the End Users exceed the amount which was due on the
provision of products or services to the End Users by the 900 Sponsors, whether
XXXXX, the XXXXX, or the 900 Sponsor have any liability if the total amount of
sales taxes collected are paid to the Commission.
PART IV. SUGGESTED
ANSWERS
1. XXXXX will be required to
charge the 900 Sponsors sales tax on amounts collected for intrastate telephone
communications services provided to 900 Sponsors, except where the 900 Sponsor
qualifies for an exemption.
2. XXXXX will not be required
to charge sales tax on amounts received for providing billing and collection
services to 900 Sponsors.
3. Neither XXXXX nor the XXXXX will
be required to charge sales tax on amounts received from End Users for Products
1-5.
4. a. Neither XXXXX nor the
XXXXX is a representative or agent of the 900 Sponsor within the meaning of the
Utah Tax Law so neither one would be required to collect sales tax.
b. Since XXXXX's provision of
telephone and, with the XXXXX, billing service to the End User, would not make
either one a representative of the 900 Sponsor, a 900 Sponsor as described
above would not be subject to the sales tax.
5. If XXXXX or the XXXXX bills
End Users Utah sales taxes and such taxes are remitted to the 900 Sponsor,
neither XXXXX nor the XXXXX has any liability in the event the 900 Sponsor does
not discharge its sales tax liability.
6. If XXXXX or a XXXXX bills
End Users and the taxes received are remitted by XXXXX to the Commission, XXXXX
and the XXXXX will not have any liability in the event ultimate sales tax
liability exceeds the amount of taxes received by XXXXX or the XXXXX from the
End User.
7. If sales taxes collected by
XXXXX or the XXXXX exceed the amount due on the provision of products or
services by the 900 Sponsor to the End User and if the total amount so
collected is paid to the Commission, there is no liability on the part of
XXXXX, the XXXXX or the 900 Sponsor.
PART V. DISCUSSION
1. Sales Tax on Telephone
Communication Services.
XXXXX will be required to charge the 900 Sponsor sales tax on amounts
collected for the sale of intrastate telephone communication services. Section
59-12-103(1)(b) provides that: "[t]here is levied a tax on the purchaser
for the ... amount paid to ... telephone ... corporations as defined by Sec.
54-2-1... for all telephone service ...." Section 54-2-1(30) provides
that:
Telephone corporation" includes every corporation and person,
their lessees, trustees, and receivers, owning, controlling, operating, or
managing any telephone line for public service within this state ....
As provided in Section 54-2-1(31) "telephone line" includes
the following:
[A]ll conduits, ducts, poles, wires, cables, instruments, and
appliances, and all other real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate
communication by telephone whether that communication is had with or without
the use of transmission wires.
Consequently, intrastate telecommunication services provided by XXXXX
to its 900 Sponsors are subject to sales tax, except where the 900 Sponsor is
an exempt entity under Section 59-12-104(8) for Product 5.
2. Billing and Collection
Services.
Billing and collection services provided to the 900 Sponsors are not
subject to sales tax. XXXXX or the XXXXX will bill the End User for any goods
or services purchased from the 900 Sponsor, and collect the amounts due. The XXXXX
will pay over to XXXXX all amounts collected less a fee for its billing
services. XXXXX will deduct the cost of the call and the cost of the billing
and collection services from the amounts it remits to the 900 Sponsor. The
charges for communication service and the billing and collection services will
not be separately stated. Section 59-12-103(1) provides for taxation of certain
transactions. Sales tax is imposed on the following transactions:
(a) retail sales of tangible
personal property made within the state;
(b) amount paid to common
carriers or to telephone or telegraph corporations ... whether the corporations
are municipally or privately owned, for all transportation, telephone service,
or telegraph service;
(c) gas, electricity, heat, coal,
fuel oil, or other fuels sold or furnished for commercial consumption;
(d) gas, electricity, heat,
coal, fuel oil, or other fuels sold or furnished for residential use;
(e) meals sold;
(f) admission to any place of amusement,
entertainment, or recreation, including seats and tables reserved or otherwise,
and other similar accommodations;
(g) services for repairs or
renovations of tangible personal property or services to install tangible
personal property in connection with other tangible personal property;
(h) cleaning or washing of
tangible personal property;
(i) tourist home, hotel, motel,
or trailer court accommodations and services for less than 30 consecutive days;
(j) laundry and dry cleaning
services;
(k) leases and rentals of
tangible personal property if the property situs is in this state, if the
lessee took possession in this state, or if the property is stored, used, or
otherwise consumed in this state; and
(1) tangible personal property
stored, used, or consumed in this state.
As discussed above, the amounts paid to telephone corporations include
only receipts from intrastate telephone service. Billing and collection
services are not within the realm of any of the above transactions. XXXXX's tariffed
rate for 900 Service imposes a flat rate without stating the amount of the
charge attributable to the communications service separately from the charge
relating to the billing and collection service.
The billing and collection services provided by XXXXX should not be
subject to sales tax even if it is not separately stated. Although Section
59-12-107(10)(a) provides that "[t]he sales tax as computed in the return
shall in all cases be based upon the total nonexempt sales made during the period,
including both cash and charge sales", this Section does not apply to
billing and collection services. XXXXX is not in a position to manipulate the
allocation between the taxable intrastate communication service and the
nontaxable billing and collection service. As discussed above, the
communication service offered as part of the 900 Service is identical to 800
Service which is a tariffed product. XXXXX believes that the communications
component of the 900 Service charge can be determined by reference to the highest
domestic 800 Service rate which is filed with the FCC in XXXXX's tariff. Thus,
the allocation between taxable services and exempt services cannot be
manipulated to XXXXX's advantage.
3. Products 1-5
With respect to products 1-4, the 900 Sponsors will use XXXXX's
telephone lines to provide various types of information services. These
services, provided to the End Users by the 900 Sponsor, would not be subject to
sales tax because they are neither a sale of tangible personal property nor
taxable services described in Section 59-12-103.
Product 5, which would involve the use of XXXXX's telephone lines by
900 Sponsors to receive pledges or contributions, would clearly not generate
any sales tax because this product is not a taxable transaction described in
Section 59-12-103.
4. Product 6.
a. Where the 900 Sponsor is a
vendor subject to sales tax in Utah.
If the 900 Sponsor is a Utah vendor or an interstate vendor who is
subject to Utah tax, the 900 Sponsor and not XXXXX (or the XXXXX) will be responsible
for collecting sales tax on the tangible personal property that the 900 Sponsor
sells and delivers to End Users in Utah.
Section 59-12-107(1) (a) provides that "[e]ach vendor is
responsible for the collection of the sales or use tax imposed under this
chapter." A "vendor" is defined in Section 59-12-102 (17) as
"any person receiving any payment or consideration upon a sale of tangible
personal property or any other taxable item or service under Subsection
59-12-103 (1), or to whom such payment or consideration is payable. "
Section 59-12-102(9) defines a "retailer" as:
... [A] person engaged in a regularly organized retail business in
tangible personal property or any other taxable item or service under
Subsection 59-12-103(1), and selling to the user or consumer and not for
resale, and includes commission merchants, auctioneers, and all persons
regularly engaged in the business of selling to users or consumers within the
state .... When in the opinion of the commission it is necessary for the efficient
administration of this chapter to regard salesmen, representatives, peddlers,
or canvassers as the agents of the dealers, distributors, supervisors, or
employers under whom they operate or from whom they obtain the tangible
personal property sold by them, irrespective of whether they are making sales
on their own behalf or on behalf of such dealers, distributors, supervisor, or
employers, the commission may regard them and may regard the dealers,
distributors, supervisors, or employers as retailers for purposes of this
chapter.
Section 59-12-106 (1) provides that:
It is unlawful for any person required by this chapter to collect sales
or use tax, to engage in business within the state without first having
obtained a license to do so ....
Further, Section 59-12-107(5) (a) provides that:
Each vendor shall pay or collect and remit the sales and use taxes
imposed by this chapter if within this state the vendor directly or by any
agent or other representatives: (i) has or utilizes an office, distribution
house, sales house, warehouse, service enterprise, or other place of business;
(ii) maintains a stock of goods; (iii) regularly solicits orders whether or not
such orders are accepted in this state ... (iv) regularly engages in the
delivery of property in this state other than by common carrier or United
States mail; or (v) regularly engages in any activity in connection with the
leasing or servicing of property located within this state.
Thus, if a 900 Sponsor is an instate vendor or an out-of-state vendor
subject to tax under Section 59-12-107(5)(a), that 900 Sponsor would be
required to register with the State of Utah and collect sales tax Section
59-12-106(1).
XXXXX will merely sell the use of long distance telephone lines to the 900
Sponsor and, with the XXXXX, provide a billing and collection service. XXXXX
will not receive any commission. It will not share in any of the revenues
earned by the 900 Sponsor on the goods sold. XXXXX (or the XXXXX) will not
accept orders or solicit customers for any 900 Sponsor.
XXXXX's role in performing billing and collection services is the same
as that performed by credit card companies which, to the best of the knowledge
of the undersigned, have not been found to be responsible for collecting sales
taxes on goods and services provided by other establishments.
b. Where the 900 Sponsor does not otherwise have sufficient nexus with
Utah to be subject to sales tax.
If out-of-state 900 Sponsors sell tangible personal property within
Utah, they are required to register to collect tax, with certain exceptions.
Section 59-12-106(1) provides that:
... No license is required for any person engaged exclusively in the
business of selling commodities which are exempt from taxation under this
chapter.
Also, as provided in Section 59-12-107(5)(a), if a vendor's only means
of advertising and soliciting in Utah is solely by direct mail or delivery of
property in Utah is only through the United States mail, then the vendor is not
required to pay or collect and remit sales and use tax.
Section 59-12-104(12) provides an exemption from Utah sales tax for
those transactions which would be prohibited from state taxation because of the
restrictions imposed by the U.S. Constitution. This exception exists for
businesses that do not have sufficient nexus with Utah to be subject to its
sales tax. Such nexus is required by the Commerce Clause of the U.S.
Constitution (Art. I, Sec. 8, c1. 3) and the Due Process Clause of the
Fourteenth Amendment. See National Geographic Society v. California Board of
Equalization, 430 U.S. 551 (1977); National Bellas Hess. Inc. v. Department of
Revenue, 386 U.S. 753 (1967).
If an out-of-state 900 Sponsor does not have sufficient nexus with Utah
to be subject to sales tax, XXXXX's provision of telephone communications and,
with the XXXXX, the billing and collection services should not cause the
out-of-state 900 Sponsor to be subject to sales tax. The 900 Sponsor is not an
agent of XXXXX (or the XXXXX) but is a principal seeking to earn a profit.
XXXXX (or the XXXXX) will not be a representative or agent of the 900
Sponsor soliciting potential customers for it in Utah. XXXXX (or the XXXXX)
will not engage in any activities on behalf of the 900 Sponsor other than
billing the End Users and collecting the amounts billed.
Thus, since XXXXX's provision of telephone and, with the XXXXX, billing
service to the End User, would not make either one a representative of the 900
Sponsor, a 900 Sponsor would not be subject to the sales tax.
5. Liability of XXXXX or the
XXXXX if 900 Sponsor does not pay over Sales Tax paid by End Users and Remitted
to 900 Sponsor.
In the event that XXXXX contracts with a 900 Sponsor to bill Utah sales
taxes and bills, or causes a XXXXX to bill, such taxes to End Users for the
products or services of a 900 Sponsor, XXXXX may remit such taxes to the 900
Sponsor for them to pay to the Commission. The performance of this service for
the 900 Sponsor should not result in XXXXX or the XXXXX having any liability in
the event the 900 Sponsor fails to pay these taxes to the Commission. XXXXX or
the XXXXX would only be performing a billing function much like a credit card
company which collects from its credit card holder on the holder's purchases.
To the best of the knowledge of the undersigned, credit card companies are not
regarded as having any liability for sales taxes received from their card
holders. It is suggested that this is the correct result because (i) the sales
taxes received from the End Users are not being paid to discharge a liability
for which XXXXX or the XXXXX is responsible and (ii) XXXXX and the XXXXX are
not persons required to collect the tax under Section 59-12-107(1)(a).
6. Liability for Sales Taxes in
Excess of Amounts Billed by XXXXX or a XXXXX.
If XXXXX or a XXXXX bills End Users Utah sales tax for 900 Sponsors and
the taxes received from the End Users are remitted by XXXXX to the Commission,
XXXXX or the XXXXX should not have any liability to the Commission if the
ultimate liability exceeds the amount of taxes received by XXXXX or the XXXXX
from the End User. As discussed in preceding paragraphs, XXXXX or the XXXXX is
not a person required to collect the tax. If, in the course of its billing and
collection services for the 900 Sponsor, either XXXXX or the XXXXX does not
charge the proper amount of sales taxes to an End User or if the End User fails
to pay the amount of sales tax billed, the 900 Sponsor and not XXXXX (or the
XXXXX) should be responsible for any additional amount to the Commission. The
fact that XXXXX pays over to the Commission the amount of taxes received from
the End User should not affect this result since XXXXX and the XXXXX were not
acting for their own account but for the account of the 900 Sponsor.
Furthermore, XXXXX's responsibility for sales taxes should not be affected by
its paying to the State the amount of taxes received from End Users since, to
reach a contrary result, would be to penalize XXXXX for ensuring that the
Commission receives the amount of taxes paid by the End Users.
7. Liability in Cases where
Taxes Collected Exceed Amounts Due and are Paid Over to the Commission.
XXXXX believes that there is no liability on the part of XXXXX, the
XXXXX, or the 900 Sponsor if the full amount collected as sales taxes is remitted
to the Commission. Section 59-12-107(16) provides that:
If any vendor, during any reporting period, collects as a tax an amount
in excess of the lawful state and local percentage of total taxable sales
allowed under this part and Part 2, he shall remit to the commission the full
amount of the tax imposed under this part and Part 2 and also any excess.
Further, Section 59-12-110 provides that:
... If the amount paid exceeds that which is due, the excess, together
with interest thereon ... from the date of overpayment, shall be credited or
refunded to the person paying it, upon written application, if it is determined
that the overpayment was not made for the purpose of investment.
Accordingly, there is no liability on the part of XXXXX, the XXXXX or
the 900 Sponsor if the full amount collected as sales taxes are so paid to the
Commission. The only remedy in such instances consists of the customers of the
900 Sponsors applying for a refund of amounts erroneously collected as sales
taxes.
PART VI. CONCLUSION
XXXXX respectfully requests that an Advisory Opinion be issued with
respect to the questions presented above. A conference is requested in the
event that a ruling on a particular question is contemplated which differs from
XXXXX's suggested response as contained in the summary at pages 10-11.
XXXXX is prepared to meet with the Commission to further discuss these
issues and to supply any technical information that may be requested.
Please direct any questions or comments to the undersigned.
Respectfully submitted,
XXXXX
Tax Manager
-------------------------------------
1/ XXXXX may offer international 900 Commercial Service in the future.
However, the product specifications for that service have not been fully developed.
Accordingly, this request for an Advisory Opinion is only applicable to
Domestic 900 Commercial Service.
2/ 800 Service is a service which permits a customer ("800
Sponsor") to receive an unlimited number of toll calls from all or a
limited portion of the country. The 800 Sponsor is charged for the service. The
caller does not incur a toll charge for placing the call.
3/ Generally for most communications services, XXXXX is required to
file a tariff with the FCC describing the service and the charges for using the
service.
4/ The End User may be a long distance customer of XXXXX, XXXXX or
other long distance carriers. Any person may utilize the 900 Sponsor's service
irrespective as to the identity of that person's long distance carrier.