96-160

Response October 28,1 996

Request

XXXXX

October 10, 1996

Attention: XXXXX

Could you please send me an advisory opinion on the issue of Prepaid Phone Cards?

Does a retailer charge state sales tax at the point of sale?

Thank you,

XXXXX

October 28, 1996

XXXXX

Advisory opinion - prepaid calling cards

Dear XXXXX

We have received your request for information regarding the application of sales tax to prepaid calling cards. We offer the following advice:

The legislature has been studying taxation of telecommunications services. We hoped that the study would address prepaid calling cards, but it does not. The Commission, therefore, is now in the process of drafting an amendment to our administrative rule governing telephone service to include prepaid calling cards among taxable items.

In the meantime, we acknowledge that we issued an advisory opinion last year which stated that prepaid calling cards are not taxable pending a change in the law. We offer you the same advice. If the administrative rule passes after public comment, the tax status of prepaid calling cards will change prospectively.

Please contact us if you have other questions.

For the Commission,

Joe B. Pacheco,

Commissioner