Were voluntary viewer contributions to an FCC-licensed television translator station taxable as telecommunications or cable-television revenue?

Plain-English summary

An FCC-licensed television translator station rebroadcast programming from a primary television station and was supported by voluntary viewer contributions. Viewers who did not contribute could still receive the signal.

The Comptroller first denied the refund on September 22, 1989 pending proof of the station's license and the governing federal regulation. After reviewing that information, the later October 5 letter treated the translator as an FCC-licensed broadcasting station under Section 74 of the Code of Federal Regulations.

Rule 3.344(c)(2) excluded broadcasts by FCC-licensed commercial radio or television stations from taxable telecommunications services. The rebroadcast also was not cable television service under Rule 3.313(a). The viewer contributions therefore were not taxable, and the station was entitled to a refund of sales tax it had paid without collecting from contributors.

The October 5 determination controls this summary; the earlier denial was expressly an interim result pending further investigation.

Common questions

Were the viewer contributions taxable? No.

Did noncontributors receive the translator service? Yes.

Was the rebroadcast treated as cable television? No.

Why does the source also contain a denial? The September 22 denial was pending license review; the October 5 letter later approved the refund.

Citations and references

• Section 74 of the Code of Federal Regulations
• 34 Tex. Admin. Code Rule 3.344(a)(6) and (c)(2)
• 34 Tex. Admin. Code Rule 3.313(a)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8910L0966F06

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller October 5, 1989

Dear ***:

Thank you for your letter of September 26, 1989, concerning the
refund of sales tax paid on payments received for re-broadcasting
programming broadcast by television stations licensed by the
Federal Communications Commission (FCC).

Translator stations, licensed under SEC. 74 of Code of Federal Regula-
tions (CFR), are broadcasting stations licensed by the Federal
Communications Commission (FCC). Section (c)(2) of Rule 3.344 -
Telecommunications services excludes broadcasts by commercial
radio or television stations licensed by the FCC as radio or tele-
communications services as that term is defined in section (a)(6)
of the rule.

The re-broadcast of the programming of a primary television
station licensed by the FCC is not considered the providing of
cable television services as that term is defined under section
(a) of Rule 3.313 - Cable Television Services.

Sales tax is not due on your station's revenues (voluntary contri-
butions made by viewers in the viewing area). Viewers who did not
contribute money to support the station may receive the translator
services. You are entitled to a refund of sales tax which you did
not collect from contributors.

A copy of our correspondence is being forwarded to our credit Sec-
tion in Revenue Accounting Division with a request that the refund
be processed.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need more information, you may call
toll-free 1-800-252-5555, ext. 3-4683. The regular number is 512/
463-4600. You may write me at Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Eddie C. Washington
Tax Correspondence

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller September 22, 1989

Dear ***:

Thank you for your recent letter requesting a refund of sales tax
paid on payments received for rebroadcasting programming broadcast
by television stations licensed by the Federal Communications
Commission (FCC).

Your request for a refund is denied pending further investigation.

Section (c)(2) of Rule 3.344 - Telecommunications Services ex-
cludes broadcasts by commercial radio or television stations
licensed by the FCC as telecommunication services as that term
is defined in section (a)(6) of the rule. section (c)(2) of Rule
3.344 also refers to Rule 3.313 - Cable Television Services.
Section (a) of Rule 3.313 defines cable television service as "the
distribution of video programming with or without use of wires to
subscribing or paying customers."

The activities that you are engaged in clearly do not constitute
telecommunications services; however, it is unclear whether or not
the activities are cable television services. Please forward me
a copy of your broadcast license and the federal regulation under
which the license is issued.

This opinion is based on the facts presented. If there are addi-
tional or different facts, the opinion may change.

If you have any questions or need more information, you may call
toll-free 1-800-252-5555, ext, 3-4683. The regular number is 512/
463-4600. You may write me at Tax Correspondence, Comptroller of
Public Accounts.

Sincerely,
Eddie C. Washington
Tax Correspondence