96-136D
Response September 30, 1996
Request
XXXXX
Utah State Tax Commission
210 N 1950 West
Salt Lake City, UT 84134
Dear XXXXX
One of my clients is in the business of selling
voice mail and paging services.
Specifically, for a monthly fee, a customer is given access to an
electronic mail box where messages to the customer can be recorded and stored
for later access by the customer.
Similarly, the paging service provides the customer with a telephone
number which the customer's clients can call to leave their number on the
pager, so the customer can return the call.
I have talked to representatives of Sales Tax Division
of the Utah State Tax Commission and have received conflicting opinions as to
whether the monthly fee for these two services is subject to the sales tax.
I was given your name, and told to write to you
explaining the nature of the business, so that you could write back with an
opinion on whether this service is subject to the sales tax.
I look forward to hearing from you so that I can
correctly advise my client.
Sincerely,
XXXXX
XXXXX
Advisory Opinion - Sales tax on voice messaging and
paging
Dear XXXXX
We
have received your request for an advisory opinion regarding the application of
sales tax to voice messaging and paging.
This is a good opportunity to alert you to a telecommunications study
which is being conducted at the behest of the state legislature. Proposed legislation regarding taxation of
telecommunications services may come before the legislature in its next session
if the study is finalized in time.
Pending legislative action, we have asked our staff to study the issues
and make independent recommendations as to whether the Commission should pass
administrative rules governing taxation of these services. With that in mind, the advice we offer you
today is subject to change by legislation or administrative rule in the near
future.
All
intrastate telephone service is subject to sales tax. §59-12-103 Utah Code Ann.
Telephone service is defined as “the transmission for hire of signs,
signals, writing, images, sounds, messages, data or other information of any
nature. . . .” Utah Administrative Rule
R865-19S-90. Charges for voice mail
services and paging services are taxable as telephone services within the
meaning of this statute and the rule.
Although
you did not ask about tax situs (tax jurisdiction), we offer the following
guidelines. For sales of equipment
delivered to or installed in a fixed location in Utah, that location determines
the point of sale and tax rate applied to charges for the equipment. For other taxable charges, such as charges
for airtime, the tax situs shall be the service location. By “service location” we mean the business
location from which the user is employed, dispatched or based, or in the case
of non-business accounts, the residence address of the user. The billing address may be used if it fairly
represents the service location as that is defined here.
Please
contact us again if you have additional questions.
For
the Commission,
Alice
Shearer,
Commissioner