Ezel / Tax Rulings / TX
TX 9004L1029B05 Sales and/or Use Tax (State,Local,MTA) 1990-04-18

How did Texas tax a nationwide voice-messaging service's local and long-distance call charges?

Short answer: The voice-messaging service was taxable telecommunications. Local calls and long-distance calls originating in Texas and billed to a Texas service address were taxable; qualifying out-of-state long-distance calls were not. Taxable and nontaxable charges had to be separately stated.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A proposed nationwide voice-messaging service was a taxable telecommunications service under Rule 3.344.

The total charge for local calls and long-distance calls that originated in Texas and were billed to a Texas service address was taxable. Long-distance calls that neither originated in Texas nor were billed to a Texas service address were not subject to Texas tax. Taxable and nontaxable charges had to be separately stated.

Local telecommunications taxes were based on where the call originated, while interstate telecommunications services were not subject to local tax.

Common questions

Was the voice-messaging service taxable? Yes.

How were nontaxable calls handled? Their charges had to be separately stated from taxable calls.

Did local tax apply to interstate telecommunications? No, according to the letter.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller

April 18, 1990

Dear ***:

Thank you for your letter dated April 9, 1990, concerning your
proposed business, *****.

The "nationwide voice messaging service" that you will provide
is a taxable telecommunications service. Please refer to the
enclosed copy of Rule 3.344 on telecommunications services.

The total charge to your customers for local calls and long-
distance calls that originate in Texas and are billed to a
service address in Texas is subject to sales tax. Long-
distance calls that do not originate in Texas and are not
billed to a Texas service address are not subject to Texas tax.
Taxable and nontaxable charges must be separately stated to the
customer.

Local taxes are based on the location where the call originates.
Interstate telecommunications services are not subject to local
taxes. I have enclosed a brochure that lists the local taxing
jurisdictions that have elected to tax telecommunications ser-
vices.

An application for a permit to collect sales tax is enclosed for
your convenience.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have any additional ques-
tions. You may write me, call toll free 1- 800- 252-5555 (ext.
3-4685) from anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence

Get today's answer for your situation

You just read a 1990 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.