Were a data center's cross-connect, peering, and managed-router services subject to Florida communications services tax?

Plain-English summary

The Florida Department of Revenue reached different communications-services-tax results for three data-center offerings.

Cross-connect and peering supplied unlit cables, switches, interconnection mapping, setup, and platform monitoring. Customers separately obtained and controlled the communications that carried their traffic. Those charges were not subject to communications services tax, although the Department did not decide whether sales and use tax applied to the physical infrastructure.

Managed-router service actually routed customer data and was a communications service. It was exempt when the purchaser used it to provide Internet access and supplied the prescribed documentation. When billed to a Florida service address for other routing of voice, data, audio, video, or signals, it was taxable.

What this means for you

Data centers and network exchanges

Separate passive or unlit interconnection from active routing. The service's actual transmission role and the customer's documented use drive CST treatment.

Internet providers and enterprise customers

Use the required exemption documentation when managed routing is purchased to provide Internet access; the exemption did not cover every use of Internet protocol.

Common questions

Q: Were cross-connect and peering subject to CST?
A: No, on the described unlit-infrastructure facts.

Q: Was managed routing always exempt?
A: No. It was exempt for documented Internet-access use and taxable for other Florida-address communications routing.

Citations and references

• Fla. Stat. § 202.11(1), (6), and (14); Fla. Stat. ch. 203; Fla. Stat. § 213.22
• Internet Tax Freedom Act § 1105(5), 47 U.S.C. § 151 note

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 013A19-002

Original ruling text

Interim Executive
Director
Marshall Stranburg

SUMMARY

TAX: Communications Services Tax
TAA NUMBER: 013A19-002
ISSUE: Cross Connect, Peering and Managed Router Services
STATUTE CITES: Chapters 202 and 203, Florida Statutes
QUESTION: Are the Taxpayer’s cross-connect, peering, and managed router services subject to
CST?
ANSWER:
Cross Connect and Peering Services
The Taxpayer’s description of cross connect and peering that it provides are for physical
infrastructure (“unlit” cables, parts and equipment) and oversight monitoring to make sure that
the connections are working for redundancy purposes. The Taxpayer describes cross connect and
peering as services. As the Taxpayer has described them, these “services” do not include the
“transmission, conveyance, or routing of voice, data, audio, video, or any other information or
signals, including video services, to a point, or between or among points, by or through any …
medium or method now in existence or hereafter devised, regardless of the protocol used for
such transmission or conveyance.” As such, charges for the cross connect and peering “services,”
are not subject to CST. Please note that the Taxpayer has not provided sufficient information for
the Department to determine whether any aspect of the physical infrastructure that the taxpayer
provides constitutes a lease or license to use real property or tangible personal property.
Therefore, this Technical Assistance Advisement does not address whether sales and use tax,
pursuant to Chapter 212, F.S., applies to charges for use of the physical infrastructure or whether
any aspect of the charges is otherwise subject to sales and use tax.
Manage Router Service
The managed router service includes routing a customer’s data from one website or network to
another over the best path or the customer’s specified network path. Because the managed router
service includes the “routing of voice, data, audio, video, or any other information or signals,
including video services, to a point, or between or among points, by or through any …
medium…” it is a communications service, pursuant to Florida law. It must next be determined,
however, whether this managed router service constitutes an Internet access service or other
similar online computer service which would not be subject to CST.
Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Tony Powell, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
February 20, 2013

RE:

Technical Assistance Advisement – TAA 013A19-002
Communications Services Tax – Cross Connect, Peering and Managed Router Services
FEI #: XXX
Chapters 202 and 203, Florida Statutes

This is a response to your letter dated XXX. You have requested a Technical Assistance
Advisement (TAA) regarding the Department’s position on whether Florida’s Communications
Services Tax and gross receipts tax (CST) applies to the Taxpayer’s sales of cross connect, peering,
and managed router services. The information provided with your letter established that you meet
the requirements for a TAA.
ISSUE
Are the Taxpayer’s cross-connect, peering, and managed router services subject to CST?
FACTS
Following are the facts, as provided by the Taxpayer:
XXX (Taxpayer) is a subsidiary of XXX (Parent). The Taxpayer is headquartered in XXX, and
operates datacenters in locations worldwide. In XXX, the Taxpayer operates the XXX (Facility),
its “flagship” facility. The Facility is a carrier-neutral network access point (or NAP) specifically
designed to link Latin America with the rest of the world. Though owned by Parent, the
Taxpayer is not a telecommunications company.
The Taxpayer states that it,
…provides its customers with access to the Internet to obtain Internet-based
network services and the ability to exchange Internet traffic...
In a subsequent letter dated XXX, (from page 3) the Taxpayer clarifies that,
[Taxpayer] does not provide direct Internet access to its customers. [Taxpayer’s]
customers must contract with ISPs to gain access to the NAP or, in turn, to
provide services to their customers. [Taxpayer’s] cross-connect, peering, and
[managed router services] offerings provides customers with a connection to the
Internet architecture, which means that each of the services [comprise] part of the
Internet. 1
1

The term “direct” Internet access is a term that was provided by the Taxpayer to the Department. Chapter 202,
F.S., does not contain a reference to “direct” or “indirect” Internet access. The Department does not have a position

Technical Assistance Advisement
Page 3
Any communications services used within the NAP are not provided by the Taxpayer, but rather
by third party providers, to whom customers pay CST on services purchased. (It must be noted
that no invoices or contracts between customers were provided in regards to this statement.) The
Taxpayer states that,
…if [Taxpayer’s] customers use communications services to gain access to
[Taxpayer’s] services or infrastructure, they must pay any applicable
communications services tax.
Though the Taxpayer states it does not provide direct Internet access, it does provide its
customers “Internet-based network services” within the NAP.
The Taxpayer explains that,
The NAP is carrier-neutral and, therefore, is used by many different
organizations including Internet service providers, banks, and universities.
[Taxpayer] provides the Services through its “exchange point services” platform
using the open systems interconnection (“OSI”) seven layer model. The OSI
model facilitates the subcomponents of the Internet and Internet access and is
“the only internationally accepted framework of standards for communication
between different systems made by different vendors.” The purpose of the OSI
model is to “create an open systems networking environment where any
vendor's computer system, connected to any network, can freely share data with
any other computer system on that network or a linked network.”
At issue are the Taxpayer’s cross-connect, peering, and managed router services.
Cross Connect Services
The Taxpayer explains that its cross-connect service,
…provides interconnection between two [Taxpayer] customers within a “meet
point room” in the NAP. The meet point room contains equipment that makes
up part of the Internet. When NAP customers [ co-locate] in the data center,
they typically extend their presence or demarcation points to the meet point
room using inter-facility cables. Since the NAP is carrier neutral, [Taxpayer]
customers have access to over XXX global carriers that maintain connections
within the NAP. For example, a cross-connect customer can connect in the meet
point room with another ISP. The cross-connect customer can also change its
connection to another ISP on demand.

as to these terms. The Taxpayer refers to “direct Internet access” as that service that ISPs (rather than the Taxpayer)
provide to their customers to gain access to the NAP or to provide services to their customers.

Technical Assistance Advisement
Page 4
The cross-connect service is provided using two methods: “physical” or
“logical.”... Under the first method, a [Taxpayer] employee runs a cable
between each customer's port. That cable is not owned by [Taxpayer]. That
cable is purchased and owned by the customer requesting the cross-connect.
There is a one-time, non-recurring charge for this set-up and configuration.
Once the cable is connected, the customer receives a recurring monthly charge
for the performance of platform management services. This charge encompasses
various overhead expenses associated with providing the service. (Emphasis
supplied.)
Under the second method, each customer's ports terminate at an optical switch
within the meet point room, and the connection is made at the port. There is no
tangible personal property required. Instead, [Taxpayer] provides the mapping
within the optical switch to interconnect the customer ports. Like the “physical”
connection, the customer pays a one-time, non-recurring charge for set-up and
configuration. The customer also pays a recurring monthly charge for the
performance of platform management services. Consistent with the first
method, this charge encompasses various overhead expenses associated with
providing the service.
The recurring charges are a flat rate per month but the rate increases based on data speed and
capacity.
The Taxpayer explains that for both methods of the cross-connect service, its,
…customers control all network traffic and management thereof…. The NAP
customers that cross-connect with one another independently negotiate the terms
of the cross-connect arrangement (e.g., the speed that the equipment will allow
for, duration, and price) among each other – not with [Taxpayer]. Charges by ISPs
for Internet bandwidth and/or transmission used by [Taxpayer’s] customers to
access the NAP are separate and distinct transactions from the services provided
by [Taxpayer].
In a subsequent letter dated XXX, (from page 3) the Taxpayer explains that,
[Taxpayer’s] cross-connect service allows customers to physically interconnect
their networks with other [Taxpayer] customers’ networks in the NAP…
customers are not simply purchasing “accessibility” or “availability.” For
example, in the case of customers who purchase logical cross-connect service,
[Taxpayer] provides the mapping within the optical switch that facilitates the
interconnection between the customer’s ports. [Taxpayer] also installs and
configures the cross-connect service and performs related platform management
services.”

Technical Assistance Advisement
Page 5
Per the Taxpayer’s explanations, the switches that are involved in cross-connect services
are being provided by the Taxpayer to its customers “unlit” - only the physical
infrastructure is provided by the Taxpayer. The Taxpayer’s customers contract and agree
with each other for the communications services used to transmit or switch voice, data,
video or other information between each other’s networks.
Peering Services
The Taxpayer explains that its peering services,
….enable customers to interconnect at the OSI Level 2 to facilitate their network
traffic exchange. … ISPs and other [Taxpayer] customers must find paths (often
using the managed router services, described below) from one point to another
without explicit [pre-configuration]. [Taxpayer’s] peering services help
[Taxpayer’s] customers to find those paths on the Internet.
Under a peering arrangement, one customer provides, sells, or gives access to all
Internet website destinations in its routing table to another customer, and/or vice
versa. Peering arrangements give each customer access to the other’s network,
allowing them – not [Taxpayer] – to exchange traffic or send and receive data over
each other’s network…. The peering customers independently contract with each
other, not [Taxpayer], to determine data speed, bandwidth, network reliability,
security, customer base, and other issues related to access of their respective
networks. [Taxpayer] is not involved in the relationship between its customers….
[Taxpayer’s] peering service allows its customers (one or more of the networks) to
view each other’s Internet destinations or routing tables so that the customers may
contract with one another and access the peering switches. …”
Per the Taxpayer’s explanations, the switches that are involved in peering services are
being provided by the Taxpayer to its customers “unlit” - only the physical infrastructure
is provided by the Taxpayer. The Taxpayer’s customers contract and agree with each
other for the communications services used to transmit or switch voice, data, video or
other information between each other’s networks.
Peering parties generally use Border Gateway Protocol (BGP). BGP is defined in Newton’s Telecom
Dictionary, 188-189, 26th Edition, as:
Border Gateway Protocol is a Gateway Protocol which routers…. employ in order to
exchange appropriate levels of routing information. …
Border Gateway Patrol allows an open gateway for peering. The Taxpayer explains that it,

Technical Assistance Advisement
Page 6
….charges a one-time, non-recurring fee for peering set-up and configuration. A
monthly recurring charge is billed for the performance of platform management
services, which includes a flat monthly rate for its peering service. This charge
encompasses various overhead expenses associated with providing the service.
Managed Router Services
The Taxpayer explains that it,
….provides managed router services as part of its managed hosting, cloud, and [colocation] service offerings. When one of [Taxpayer’s] customers transmits data
from one website to another over the Internet, the data has many different paths it
can take over the World Wide Web to reach its destination. However, data can
only travel over compatible networks.

[Taxpayer’s] Managed Router Service (“MRS”) provides the MRS subscribing
customer with the best path for each route to and from the Internet. MRS’s
Boarder Gateway Protocol (“BGP”) makes the decision as to what the best path is
for each destination. The MRS customer has a choice to select the BGP’s chosen
path for an optimal router experience or they can advise [Taxpayer] of their
preferred carrier for a specific route. [Taxpayer] bills its customers a one-time,
non-recurring activation charge to set up the MRS. It also bills a monthly recurring
charge for the performance of redundant Internet services as well as a variable
recurring charge if a customer exceeds the pre-contracted amount of redundant
Internet services.
During a conference with the Taxpayer on XXX, the Taxpayer provided additional information in
explaining its services. On page 5 of the documentation presented, the Taxpayer provides a bullet
point that states, “MRS provides redundant Internet access and arguably could be viewed as a
Communication Service (e.g., routing data).…”

TAXPAYER POSITION
In its request for this Technical Assistance Advisement, the Taxpayer states that it believes the
services it provides are not communications services, which are subject to CST, but rather that
the services it provides are information services which are not subject to CST. The Taxpayer
further asserts that its facilities are part of the backbone of the Internet and that the services it
provides are Internet access (or similar online services) and not subject to CST.
The Taxpayer opines that the services it provides are not communications services as defined in
Section 202.11(1), F.S., because the cross-connect, peering, and managed router services do not
“transmit, convey, or route[any] voice, data, audio, video, or any other information or signals, …
to a point, or between or among points….” The Taxpayer provides on page 6 of its conference
presentation document that,

Technical Assistance Advisement
Page 7
An [I]nternet exchange point is the infrastructure through which ISP[s] exchange
traffic among their networks. The NAP acts as an [I]nternet exchange point,
thereby providing increased access to the [I]nternet.
The Taxpayer explains that its customers.
…may retrieve information, push information, or connect to data networks
through [Taxpayer’s] infrastructure, [but that] [Taxpayer] does not provide the
communications services used by its customers. (Emphasis supplied.)
The Taxpayer believes that the cross-connect, peering, and managed router services offerings
that provide customers with a connection to the Internet architecture are technically and
conceptually distinct from the direct Internet access service that must be purchased from ISPs in
order for Taxpayer’s customers to gain access to the NAP.
The Taxpayer believes that its services are more correctly classified as “information services” or
“Internet access or similar online computer services,” which are not subject to CST.
To illustrate that its services are not subject to CST, the Taxpayer offers the following
explanations on the services. For cross-connect, the Taxpayer provides that these services,
[Taxpayer’s] cross connect services provide customers with access to the
physical facilities that allow its customers in the NAP to connect with [other]
enterprises in the NAP. Cross-connect customers do not purchase data
transmission services or other types of communications services from
[Taxpayer]. To the extent customers require data transmission services they
acquire those services from third-party enterprises. The cross-connect services
simply provide customers with a connection between others located within the
NAP. There is no transmission, conveyance or routing of data associated with
the cross-connect services. The customers have to push or pull their own
data….For the peering services, the Taxpayer stresses that the peering
arrangements are between the customers, not between Taxpayer and
customers, and that the customers purchase communications services needed
for peering from third-party providers.
For the managed router services, the Taxpayer provides that,
[Taxpayer] provides MRS as part of its managed hosting, cloud, and colocation
service offerings. MRS provides the MRS subscribing customer with the best
path for each route to and from the Internet. MRS's BGP makes the decision
as to what the best path is for each destination. MRS customers may select the
BGP's chosen path for an optimal router experience or they can advise
[Taxpayer] of their preferred carrier for a specific route.

Technical Assistance Advisement
Page 8
MRS provides customers with dual handoffs (fiber or copper) for fully
redundant access to the Internet. [Taxpayer] has multiple links to Internet
providers and by virtue of that redundancy [Taxpayer] provides similar
redundancy to customers that subscribe to the MRS. Hence, if [Taxpayer’s]
connection to one network fails, traffic automatically converges to the next best
available network.
MRS is part of the Internet. Therefore, although MRS routes data to the Internet,
it is excluded from CST as Internet access or similar on-line computer service….
Because the Taxpayer believes that these services are not communications services, but rather
properly classified as information services or Internet access service or similar online computer
services, the Taxpayer believes these services are not subject to CST.
LAW AND DISCUSSION
Section 202.11(1), F.S., provides the following definition of “communications services:”
“Communications services” means the transmission, conveyance, or routing of
voice, data, audio, video, or any other information or signals, including video
services, to a point, or between or among points, by or through any electronic,
radio, satellite, cable, optical, microwave, or other medium or method now in
existence or hereafter devised, regardless of the protocol used for such
transmission or conveyance. The term includes such transmission, conveyance, or
routing in which computer processing applications are used to act on the form,
code, or protocol of the content for purposes of transmission, conveyance, or
routing without regard to whether such service is referred to as voice-overInternet-protocol services or is classified by the Federal Communications
Commission as enhanced or value-added. The term does not include:

(h) Internet access service, electronic mail service, electronic bulletin board
service, or similar online computer services.
Section 202.11(14), F.S., quoted in pertinent part, provides the definition of service address for
CST purposes:
“Service address” means:
(a) Except as otherwise provided in this section:

1. The location of the communications equipment from which communications
   services originate or at which communications services are received by the
   customer;

Technical Assistance Advisement
Page 9

Section 202.12, F.S., provides that sales of communications services are subject to CST in
Florida as follows:
The Legislature finds that every person who engages in the business of selling
communications services at retail in this state is exercising a taxable privilege. It
is the intent of the Legislature that the tax imposed by chapter 203 be
administered as provided in this chapter.
(1) For the exercise of such privilege, a tax is levied on each taxable transaction,
and the tax is due and payable as follows:
(a) Except as otherwise provided in this subsection, at a rate of 6.65 percent
applied to the sales price of the communications service which:

1. Originates and terminates in this state, or
2. Originates or terminates in this state and is charged to a service address in this
   state,
   when sold at retail, computed on each taxable sale for the purpose of remitting the
   tax due. The gross receipts tax imposed by chapter 203 shall be collected on the
   same taxable transactions and remitted with the tax imposed by this paragraph….

To understand and illustrate the services the Taxpayer sells and for which it requests advisement
of the applicability of CST, a brief explanation of the Internet network is necessary. A network is
“a system of computers, peripherals, terminals, and databases connected by communications
lines” (Merriam-Webster definition). Newton’s Telecom Dictionary, 795 (26th Edition), defines
a network, in part as follows: “…A network ties things together. Computer networks connect all
types of computers and computer related things – terminals, printers, modems, door entry
sensors, databases, temperature monitors, etc. …”
A computer set up in a home or office plugged into a wall is an autonomous object. However,
this computer, with a phone line, broadband line, satellite, or other method of transmission is
connected to and linked with other computers, becomes part of a network of computers. These
computers that are linked may share data and information back and forth through the link.
When separate networks are linked or connected, it becomes an internetwork. Each network may
operate on different operating systems and protocols (or languages). In order for the computers
on the two networks to communicate, the protocols and systems they use to transmit data back
and forth must be able to understand each other. Currently Transmission Control

Technical Assistance Advisement
Page 10
Protocol/Internet Protocol (TCP/IP) is the most widely accepted networking protocol,
“provid[ing] communication across interconnected networks, between computers with diverse
hardware architecture and various operating systems.” (Newton’s Telecom Dictionary, 1129, 26th
Edition.) The Internet is a massive “internetwork” of multitudes of separate and distinct networks
using, in part, TCP/IP to communicate.
In order for these networks to connect and share traffic, a physical location is needed for the
equipment. These physical locations are co-location facilities and/or data centers. A NAP is “[a]
point of access into the [I]nternet used by ISPs [Internet service providers] and providers of
Internet regional and local subnets … [that] provide[s] meet points where ISPs exchange traffic
and routes … [and] NAPs provide a means of direct connection to the Internet, rather than
serving solely as an intermediate point of exchanging commercial traffic.”
In Florida, a communications service when billed to a Florida service address is subject to CST.
In this case, the service address is the “location of the communications equipment from which
communications services originate or at which communications services are received by the
customer.” (See section 202.11(14)(a), F.S.) “Internet access service … or similar online
computer services” are excluded from the definition of communications services and are,
therefore, not subject to CST. (See section 202.11(1)(h), F.S.)
Cross Connect and Peering Services
The Taxpayer’s description of cross connect and peering that it provides are for physical
infrastructure (“unlit” cables, parts and equipment) and oversight monitoring to make sure that
the connections are working for redundancy purposes. The Taxpayer describes cross connect and
peering as services. As the Taxpayer has described them, these “services” do not include the
“transmission, conveyance, or routing of voice, data, audio, video, or any other information or
signals, including video services, to a point, or between or among points, by or through any …
medium or method now in existence or hereafter devised, regardless of the protocol used for
such transmission or conveyance.” As such, charges for the cross connect and peering “services,”
are not subject to CST. Please note that the Taxpayer has not provided sufficient information for
the Department to determine whether any aspect of the physical infrastructure that the taxpayer
provides constitutes a lease or license to use real property or tangible personal property.
Therefore, this Technical Assistance Advisement does not address whether sales and use tax,
pursuant to Chapter 212, F.S., applies to charges for use of the physical infrastructure or whether
any aspect of the charges is otherwise subject to sales and use tax.
Manage Router Service
The managed router service includes routing a customer’s data from one website or network to
another over the best path or the customer’s specified network path. Because the managed router
service includes the “routing of voice, data, audio, video, or any other information or signals,
including video services, to a point, or between or among points, by or through any …

Technical Assistance Advisement
Page 11
medium…” it is a communications service, pursuant to Florida law. It must next be determined,
however, whether this managed router service constitutes an Internet access service or other
similar online computer service which would not be subject to CST.
Florida law contains the following definition of Internet access service as defined in s. 202.11(6),
F.S.:
“Internet access service” has the same meaning as ascribed to the term “Internet
access” by s. 1105(5) of the Internet Tax Freedom Act, 47 U.S.C. s. 151 note, as
amended by Pub. L. No. 110-108.
Section 1105 of the Internet Tax Freedom Act (47 U.S.C. 151 note) (2007) defines the term as:
(5) Internet access.—The term ‘Internet access’—
(A) means a service that enables users to connect to the Internet to access content,
information, or other services offered over the Internet;
(B) includes the purchase, use or sale of telecommunications by a provider of a
service described in subparagraph (A) to the extent such telecommunications are
purchased, used or sold—
(i) to provide such service; or
(ii) to otherwise enable users to access content, information or other services
offered over the Internet;
(C) includes services that are incidental to the provision of the service described
in subparagraph (A) when furnished to users as part of such service, such as a
home page, electronic mail and instant messaging (including voice- and videocapable electronic mail and instant messaging), video clips, and personal
electronic storage capacity;
(D) does not include voice, audio or video programming, or other products and
services (except services described in subparagraph (A), (B), (C), or (E)) that
utilize Internet protocol or any successor protocol and for which there is a charge,
regardless of whether such charge is separately stated or aggregated with the
charge for services described in subparagraph (A), (B), (C), or (E); and
(E) includes a homepage, electronic mail and instant messaging (including voiceand video-capable electronic mail and instant messaging), video clips, and
personal electronic storage capacity, that are provided independently or not
packaged with Internet access.” (Emphasis supplied.)
The Internet Tax Freedom Act prohibits the imposition of tax on charges for “Internet access
service.” The above definition includes the “purchase, use or sale of telecommunications by a
provider of a service described in subparagraph (A) to the extent such telecommunications are
purchased, used or sold – (i) to provide such service; or (ii) to otherwise enable users to access
content, information or other services offered over the Internet.”
The Taxpayer has stated that it does not provide “direct” Internet access service. The Taxpayer’s
customers locate at the NAP to co-locate and connect to other providers in order to connect
networks and share traffic and data. The Taxpayer is not exclusively selling communications

Technical Assistance Advisement
Page 12
services to provide Internet access to users or to “enable users to access content, information or
other services offered over the Internet.” The services that the Taxpayer sells are
communications services that enable ISPs’ or communication carriers’ networks to connect to
each other’s networks. They may be connecting to each other’s networks to facilitate their
customers’ Internet access, pursuant to the federal definition, or they may be connecting
networks for use in providing other services to their customers, such as communications
services. Therefore, Taxpayer’s sales of communications services may or may not be for the
eventual result of a customer providing Internet access as defined above. It must be determined
what the purchaser’s use of the managed router services is for.
To the extent that the Taxpayer’s sales of managed router services to customers are for the
purpose of the customer providing Internet access to its customers as defined above, then the
Taxpayer’s sales would not be subject to CST based on the definition of Internet access as
specified in (B), quoted above. To exempt such sales, the Taxpayer should complete the
“Suggested Exemption Certificate for Purchases of Communications Services Used to Provide
Internet Access” as outlined in Tax Information Publication (TIP) 10A19-08. A copy of the TIP
may be accessed here: https://revenuelaw.state.fl.us/Pages/Browse.aspx, under “Communications
Services Tax.”
If the Taxpayer’s managed router services are otherwise sales of a communications service(s)
billed to a Florida service address (the equipment routing the data and information is located
within the NAP in Miami), then any sales that are not made for the purpose of providing Internet
access are subject to CST. The Taxpayer, for example, could be selling its managed router
services to customers that use the service to transmit voice, data, audio, video or any other
information or signals (or that of its customers) through the Internet. Internet access is not the
transmission, conveyance or routing using Internet protocol or any successor protocol. (Section
202.11(1), F.S.; and section 1105, of the Internet Tax Freedom Act of 1998, 47 U.S.C. 151 note
(2007).) In such case, purchases of managed router service would be subject to CST.
This response constitutes a Technical Assistance Advisement under section 213.22, F.S., which
is binding on the Department only under the facts and circumstances described in the request for
this advice as specified in section 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above. You are advised that subsequent statutory or administrative
rule changes, or judicial interpretations of the statutes or rules, upon which this advice is based,
may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of section 213.22, F.S. Confidential information must be deleted before public disclosure. In an
effort to protect confidentiality, we request you provide the undersigned with an edited copy of
your request for Technical Assistance Advisement, the backup material and this response,
deleting names, addresses and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department within 15 days of the date of this
letter.

Technical Assistance Advisement
Page 13
Should you have any questions, please feel free to contact me.
Sincerely,

Carla M. Bruce
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6315
Record ID: 122264