95-031

Response August 2, 1995

Request

April 27, 1995

XXXXX

Dear XXXXX:

I appreciate the time you spent with me talking about the sales tax issues surrounding the Internet. My name is XXXXX, and I am an officer of XXXXX. I am writing this letter to receive an advisory opinion and an opinion letter with respect to charging sales tax to our customers for their use of the Internet.

Presently, XXXXX does not charge sales tax to its clients for their use of the Internet. The management of XXXXX made this decision for the following reasons:

·Only intrastate calls are taxed, not interstate

·All Internet transmissions leave the state of Utah

·It is impossible to monitor or track customers' on-line transmissions

·Customers' fees are based on a flat rate, not the number of hours used

However, as a management team, we recognize that our decisions are not law. Therefore, we are soliciting an advisory opinion and an opinion letter on this matter. We would appreciate an answer on this question when possible. Thank you for your cooperation.

Sincerely,

XXXXX

August 2, 1995

RE: Advisory Opinion - Application of sales tax to charges for use of the Internet.

Dear XXXXX,

You requested an advisory opinion as to whether the charges your clients pay for XXXXX access services to the Internet are taxable. We find as follows:

Under Utah law, charges for access to on-line services such as the Internet are not subject to sales tax. Additionally, charges associated with interstate telephone communications are also exempt from sales tax. From the information provided in the contract accompanying your letter, it appears that XXXXX charges are tax exempt.

If you new facts arise in the future which raise additional questions, please feel free to request another advisory opinion.

For the Commission,

Alice Shearer

Commissioner

**See file for information descriptive fliers on XXXXX software (2 fliers), and an Internet access-service agreement (2 page)**