Tax Commission
Sales Tax Information for Telecommunications Service Providers
Publication 62 (Rev. 02/25)
- Introduction
- What is Taxable
- Definitions
- Mobile Telecom Sourcing Act
- Emergency Service Telephone Charges
- 911 Service Charge on Prepaid Disposable Phones
- Municipal Telecom License Tax (MTLT)
- Changes to Your Account
- Penalties for Incorrect Filing and Non-Filing
- Utah Telecom Taxes & Fees
- Telecom Taxability Chart
- Translation
Introduction
This publication provides sales tax information for telecommunications (telecom) service providers. It includes Utah law and Tax Commission rules, but is not all-inclusive. Future law or rule changes may change this publication.
Find general sales and use tax information in Publication 25.
What is Taxable
Telecom services that originate and terminate within the boundaries of Utah, including landline, mobile and ancillary (secondary) services.
Definitions
Delivery Location
For telecom service, the place of primary use. This is usually the buyer’s residential or business address.
Use the delivery location to determine the correct taxing jurisdiction and tax rate. The Tax Commission provides an online database (ZIP+4 Boundaries for Telecom Tax Rates) that ties ZIP+4 addresses to taxing jurisdictions. You can download this database at Telecom Tax Rate Downloads and use it to calculate taxes and fees for each of your delivery locations.
Telecom providers report sales and use tax on form TC-62M with Schedule A. Each jurisdiction where you deliver service appears as a separate outlet on Schedule A.
Use the same delivery locations on your electronically filed Emergency Services Telephone Fee Return and your Municipal Telecommunications License Tax Return.
Telecom Service
The electronic transfer or routing of audio, video, voice or data signals. See Utah Code §59-12-102.
Telecom service includes:
- Electronically enabling, routing or sending communications. This includes VoIP (voice over Internet protocol) and enhanced or value-added service
- 800 service
- 900 service
- Fixed wireless service
- Mobile wireless service
- Postpaid calling service
- Prepaid calling service
- Prepaid wireless calling service
- Private, two-way communications service that gives exclusive or priority use of one or more channels (for example, a two-way radio)
Telecom service does not include:
- Advertising, including directory advertising
- Ancillary (secondary service, including conference bridging service, communications billing service, directory assistance, vertical service (used to identify callers and manage multiple calls) and voicemail service.
- Billing and collection service provided to a third party
- Data processing and information service, including value-added data service
- Installing or servicing equipment or wiring at a customer’s premises
- Internet access service
- Paging Service
- Products transferred electronically (music, reading material, ring tones, software, video, etc.)
- Radio and television audio/video programming service
- Value-added non-voice data service, in which a computer application processes data or information
- Any tangible personal property
Ancillary (Secondary Service)
Services associated with telecom service. This includes conference bridging service, detailed communications billing service, directory assistance, vertical service (used to identify callers and manage multiple calls) and voicemail service.
Fixed Wireless Service
Service that provides radio communication between fixed points.
Mobile Wireless Service
Service that provides telecommunication between two points if the origination point, the termination point, or both are not fixed.
Postpaid Calling Service
Telecom service paid on a call-by-call basis, using a bank card, travel card, credit card or debit card, or by dialing an access number through which service is charged after it occurs.
An example of postpaid calling service is a telephone calling card used to pay for calls after they are made according to a billing cycle. This includes calls charged to a home phone.
Sales of post-paid calling service are sourced to the place of primary use. In jurisdictions that impose the municipal telecommunication license tax, these transactions qualify as telecom service taxable to the service provider. These transactions are also subject to sales and use tax.
Prepaid Calling Service (Not Including a Telephone Line)
Telecom services that are paid for in advance and used by entering an access number or authorization code.
Prepaid calling service is sold in units of minutes or dollars that decline with use. A 60-minute phone card for sale at a grocery store is an example of prepaid calling service.
Prepaid calling service may include a disposable phone and a temporary phone line, if they are all sold together.
Amounts paid for prepaid calling service are subject to sales and use tax and are sourced to the sale location. No additional sales and use tax is charged when the service is actually used.
Prepaid telecom service sold as a prepaid calling card is taxable for in-state calls. Prepaid telephone services are considered in-state telephone services if the card can be used for in-state calls. If a card can only be used for interstate or international calls, it can be sold tax free.
Prepaid Wireless Calling Service
The right to use mobile wireless service, including non-telecom services (such as downloading products transferred electronically, content services or secondary services).
Prepaid calling services are paid for in advance and sold in units of minutes or dollars that decline with use. They are used by entering an access number or authorization code.
Amounts paid for prepaid wireless calling service are subject to sales and use tax and are sourced to the sale location.
Prepaid telecom service sold as a prepaid calling card is taxable for in-state calls. Prepaid telephone services are considered in-state telephone services if the card can be used for in-state calls. If a card can only be used for interstate or international calls, it can be sold tax free.
Prepaid wireless calling service includes prepaid disposable phones that allow callers access to 911 emergency service.
Private Communication Service
Service that entitles a customer to exclusive or priority use of one or more channels between or among termination points. Private communications service includes an extension line, a station, and switching capacity.
Mobile Telecom Sourcing Act
Service that entitles a customer to exclusive or priority use of one or more channels between or among termination points. Private communications service includes an extension line, a station, and switching capacity.
The Mobile Telecommunications Sourcing Act (U.S. Code, Title 4, Chapter 4) defines the location of a wireless telephone call, for taxing purposes, as the customer’s place of primary use. See Delivery Locations in this publication.
Emergency Service Telephone Charges
The following charges apply to each landline, cellular line and other service line, such as VoIP. Any service provider who must pay one fee must also pay the other.
File and pay E-911 Telephone Fee Return electronically at tap.utah.gov. The return and payment are due at the same time as your Sales and Use Tax Return.
When you file, you must identify each city, town or unincorporated area of the county where phone service is supplied, based on the ZIP+4 service addresses of your customers. When you supply service to multiple locations within a county, DO NOT report all lines and fees at the county level or at just one city or town within the county.
The Tax Commission provides a downloadable database of rates and boundaries that ties ZIP+4 addresses to taxing jurisdictions. You can download this database at Telecom Tax Rate Downloads.
911 Emergency Service Charges
The monthly 911 emergency service charge fee is 73 cents per service line.
You may keep 1.5 percent of this charge fees toward the cost of billing, collecting and paying the charge.
Unified Statewide 911 Emergency Service Charge
The monthly unified statewide 911 emergency service charge is 25 cents per service line. You may keep 1.5 percent of this charge toward the cost of billing, collecting and paying the charge.
Radio Network Charge
Utah levies an additional statewide fee of 27 cents per month for each service line to fund a statewide public safety communications network.
You may not keep any portion of this fee for any reason.
911 Service Charge on Prepaid Disposable Phones
Utah imposes a prepaid wireless 911 service charge of 3.13 percent and a prepaid wireless telecommunications service charge of 1.2 percent (4.33 percent combined) on the sales price of prepaid disposable cell phone minutes. Sellers may keep 3 percent of the money they collect for administration costs.
Municipal Telecom License Tax (MTLT)
Utah cities and towns may impose a tax of up to 3.5 percent on the value of telecom service provided within their boundaries. You may pass this tax on to your customers. If you do, this amount is part of the service sales price for sales tax purposes.
To file and pay the Municipal Telecommunications License Tax Return electronically, go to tap.utah.gov. The return and the payment are due at the same time as your Sales and Use Tax Return. Find the jurisdictions that impose this tax and the rates online at Sales & Use Tax Rates.
When you file, you must identify each city or town where telecom service is provided, based on ZIP+4 service addresses of your customers. Since the unincorporated portion of the county cannot impose this tax, DO NOT report any service at the county level.
The Tax Commission provides a downloadable database of rates and boundaries that ties ZIP+4 addresses to taxing jurisdictions. You can download this database at Telecom Tax Rate Downloads.
Changes to Your Account
You must report account changes, and any changes to telecom delivery locations, immediately to the Tax Commission. Report company name changes, ownership changes and address changes on form TC-69C, Notice of Change for a Tax Account. Use form TC-62Q, Utah Sales Tax Sourcing Schedule, to add or delete a location.
Penalties for Incorrect Filing and Non-Filing
We may impose a penalty of the greater of $20 or 10 percent of the tax due if you submit incorrect or late return information. This includes:
- An incomplete return
- An electronic return in the wrong format
- Payment without a return
Utah Telecom Taxes & Fees
Taxes and fees imposed on the customer are not included in the taxable base. However, taxes and fees imposed on the company that are listed on the customer’s bill are included in the sales tax base.
The chart below is a summary of taxes and fees on telecom service in Utah. The chart may not be all-inclusive.
Chart 1: Utah Telecom Taxes & Fees
| Telecom Service | Subject to: Emergency Services 1 UC §69-2-5 | Subject to: Municipal Telecom UC §10-1-404 | Subject to: Sales and Use UC §59-12-103 | Reference 2 |
| 800 Service – toll-free calling (800, 855, 866, 877, 888) | No | Yes3 | Yes3 |
UC 59-12-102(1) |
| 900 Service – inbound toll telecommunications | No | Yes3 | Yes3 |
UC 59-12-102(2) |
| Ancillary (Secondary) Telephone Services (call waiting, caller ID, call forwarding, voice mail, etc.) |
No | Yes | Yes |
UC 59-12-102(12) |
| Answering Service – human operator | No | No | No |
R865-19S-90(2) |
| Cable or Satellite TV4 | No | No | No |
UC 59-26-103 |
| Cellular Phone Line | Yes | Yes | Yes | |
| Charges to fund special services (911, TDD, service for low-income customers) |
No | No | No |
R865-19S-90(2) |
| Contributions to aid construction projects | No | No | No | |
| Equipment Repair – equipment belongs to customer and remains tangible personal property |
No | No | Yes |
UC 59-12-104(61) |
| Equipment Repair – real property | No | No | No |
R865-19S-90(d) |
| Fiber Optic Cable – dark (unlit) – treated as lease of real property | No | No | No |
PLR 07-009 |
| Fiber Optic Cable – lit or activated – used for telephone service Part of a public switched telephone network (PSTN) |
Yes | Yes | Yes |
PLR 07-009 |
| Fiber Optic Cable – lit or activated – not part of a public switched telephone network (PSTN) |
No | Yes | Yes | |
| Internet Access – purchased, used or sold by a provider | No | No | No |
PL 110-108 |
| Internet Service Provider | No | No | No |
PL 110-108 |
| Long Distance – interstate | No | No | No | |
| Long Distance – Intrastate | No | Yes | Yes | UC 59-12-103(1)(b) |
| Municipal Telecom Fee recovered from customer | No | No | Yes | UC 10-1-402(4) |
| Paging Service | No | No | No | UC 59-12-102(129)(c)(vii) |
| Post-Paid Calling Service | No | Yes | Yes | UC 59-12-102(129)(b)(vi) |
| Prepaid Service – including a phone line (disposable phone, temporary phone line, etc.) | Yes | Yes | Yes | UC 59-12-102(129)(b)(viii) |
| Prepaid Service – not including a phone line (e.g., a calling card) | No | Yes | Yes | UC 59-12-102(129)(b)(vii) |
| Radio – mobile service | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| Radio Communications Access Line | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| Refundable Deposits, Interest, Penalties, etc. | No | No | No | |
| Sales and Use Tax | No | No | No | |
| Service Fees – connection, disconnect, changes, etc. | No | Yes | Yes | UC 59-12-102(89) |
| Subscriber Access Fees | No | Yes | Yes | UC 59-12-103(b) |
| Switched Access Line (landline) | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| VoIP (voice over Internet protocol) | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| VPN (virtual private network) | Yes | Yes | Yes |
1 Emergency Services includes 911 emergency service charge and radio network charge
- 2 UC = Utah Code
- PL = Public Law (federal)
- PLR = Private Letter Ruling (Utah Tax Commission)
- R = Administrative Rule
3 If intrastate included, all is taxable
4 Subject to multi-channel video or audio service tax
Find information online about E-911, computer-aided dispatch and municipal telecom, including detailed filing instructions and formats at tax.utah.gov/utah-taxes
Telecom Taxability Chart
The range of services a provider offers and the combination of services a customer buys are usually unique. Some services may be subject to emergency services fees alone, some may be subject to municipal telecom tax alone, and some may be subject to both.
The chart below is a summary of services that may be provided to telecom customers. The chart may not be all-inclusive.
Use the chart to find if a service is taxable. Then find if a locality imposes the fee or tax by checking the rate chart at Sales & Use Tax Rates.
Chart 2: Telecom Taxability
| Telecom Service | Subject to: Emergency Services 1 UC §69-2-5 | Subject to: Municipal Telecom UC §10-1-404 | Subject to: Sales and Use UC §59-12-103 | Reference 2 |
| 800 Service – toll-free calling (800, 855, 866, 877, 888) | No | Yes3 | Yes3 |
UC 59-12-102(1) |
| 900 Service – inbound toll telecommunications | No | Yes3 | Yes3 |
UC 59-12-102(2) |
| Ancillary (Secondary) Telephone Services (call waiting, caller ID, call forwarding, voice mail, etc.) |
No | Yes | Yes |
UC 59-12-102(12) |
| Answering Service – human operator | No | No | No |
R865-19S-90(2) |
| Cable or Satellite TV4 | No | No | No |
UC 59-26-103 |
| Cellular Phone Line | Yes | Yes | Yes | |
| Charges to fund special services (911, TDD, service for low-income customers) |
No | No | No |
R865-19S-90(2) |
| Contributions to aid construction projects | No | No | No | |
| Equipment Repair – equipment belongs to customer and remains tangible personal property |
No | No | Yes |
UC 59-12-104(61) |
| Equipment Repair – real property | No | No | No |
R865-19S-90(d) |
| Fiber Optic Cable – dark (unlit) – treated as lease of real property | No | No | No |
PLR 07-009 |
| Fiber Optic Cable – lit or activated – used for telephone service Part of a public switched telephone network (PSTN) |
Yes | Yes | Yes |
PLR 07-009 |
| Fiber Optic Cable – lit or activated – not part of a public switched telephone network (PSTN) |
No | Yes | Yes | |
| Internet Access – purchased, used or sold by a provider | No | No | No |
PL 110-108 |
| Internet Service Provider | No | No | No |
PL 110-108 |
| Long Distance – interstate | No | No | No | |
| Long Distance – Intrastate | No | Yes | Yes | UC 59-12-103(1)(b) |
| Municipal Telecom Fee recovered from customer | No | No | Yes | UC 10-1-402(4) |
| Paging Service | No | No | No | UC 59-12-102(129)(c)(vii) |
| Post-Paid Calling Service | No | Yes | Yes | UC 59-12-102(129)(b)(vi) |
| Prepaid Service – including a phone line (disposable phone, temporary phone line, etc.) | Yes | Yes | Yes | UC 59-12-102(129)(b)(viii) |
| Prepaid Service – not including a phone line (e.g., a calling card) | No | Yes | Yes | UC 59-12-102(129)(b)(vii) |
| Radio – mobile service | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| Radio Communications Access Line | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| Refundable Deposits, Interest, Penalties, etc. | No | No | No | |
| Sales and Use Tax | No | No | No | |
| Service Fees – connection, disconnect, changes, etc. | No | Yes | Yes | UC 59-12-102(89) |
| Subscriber Access Fees | No | Yes | Yes | UC 59-12-103(b) |
| Switched Access Line (landline) | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| VoIP (voice over Internet protocol) | Yes | Yes | Yes | UC 69-2-402, UC 69-2-403, UC 69-2-404 |
| VPN (virtual private network) | Yes | Yes | Yes |
1 Emergency Services includes 911 emergency service charge and radio network charge
- 2 UC = Utah Code
- PL = Public Law (federal)
- PLR = Private Letter Ruling (Utah Tax Commission)
- R = Administrative Rule
3 If intrastate included, all is taxable
4 Subject to multi-channel video or audio service tax
Find information online about E-911, computer-aided dispatch and municipal telecom, including detailed filing instructions and formats at Utah Taxes and Fees
Translation
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