95-082
Response
November 20, 1995
Request
UTAH
STATE TAX COMMISSION
210
North 1950 West
Salt
Lake city, UT 84134
Reference:
XXXXX Registration Number XXXXX
Gentlemen:
XXXXX
is selling service and required related equipment to the trucking
industry. The service is between the
trucking dispatch centers and individual trucks. These dispatch centers and
trucks may be located anywhere in the United States or Canada. XXXXX's base
station portion of the service link is located in XXXXX.
The
system operates in the following manner.
A trucking company purchases/rents the required equipment from
XXXXX. The equipment is installed in
the trucking company's trucks and dispatch center. The dispatch center transmits a data message to XXXXX's facility
in XXXXX via a telephone line (this line may be from XXXXX, for which the
customer will pay to the telephone company for use of their line).
XXXXX
logs the message and transmits the message on to a radio network/satellite
company which broadcasts the message across North America. The message is coded in such a manner to
only activate the receiver in a specific vehicle to display or record the
message. This communication link also
works in a reverse path. The messages
from the individual vehicles are stored at the XXXXX facility in XXXXX until
the trucking company calls in for their messages (via the telephone lines
referenced above). The service does not
provide direct communication links between individual vehicles.
XXXXX
bills the customer for the purchase/rental of the equipment. XXXXX's billing for the service may be based
on one of several criteria: number of messages, number of kilobytes of data
transmitted per truck, time of day, transmission mode (satellite or
terrestrial), a flat fee, or a combination of any or all of these options.
We
are requesting a binding ruling on each of the following:
1)
The application of your state's tax on this service.
(2)
The application of your state's tax on the sale/lease of equipment to trucking
companies engaged in interstate commerce.
If
you have any questions or need additional information you can call me at
XXXXX. Thank you for your prompt
response.
Sincerely,
XXXXX
Western
Region
XXXXX
RE:
Advisory Opinion - Application of sales tax to message services and related
equipment.
Dear
XXXXX
We
have received your request for an advisory opinion regarding the application of
sales tax to the message service operations your company provides to trucking
companies. Although your inquiry was
framed as a request for declaratory judgment, it is Tax Commission policy to
treat all such inquiries as requests for advisory opinions. We find as follows:
The
Messaging service described in your letter is not subject to Utah sales and use
tax. However, sales or leases of the
associated Messaging equipment are subject to sales tax and use tax. However,
the purchaser is entitled to a sales tax credit for sales tax legally assessed
and paid in the other state.
This
advisory opinion is an authoritative indication of our policy regarding the
application of sales tax under the circumstances described in your letter. We are happy to offer you whatever
additional assistance necessary to help you understand our tax laws. Please let us know if you have additional
questions.
For
the Commission,
Alice
Shearer
Commissioner