How were air-to-ground telephone calls taxed when they originated in Houston and terminated either in Texas or outside the state?

Plain-English summary

The air-to-ground telephone services were taxable because the calls originated in Houston.

Calls terminating at Texas locations were subject to Texas state and Houston city sales tax. Calls to points outside Texas were subject to state tax only.

The telephone-service provider could give its supplier of long-distance service a resale certificate instead of paying tax on that purchase.

Common questions

Houston-to-Texas call taxed how? State and Houston city tax.

Houston-to-out-of-state call taxed how? State tax only.

Could the provider buy long-distance service for resale? Yes, with a resale certificate.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9006L1027A11

Original ruling text

June 20, 1990

Dear **:

Thank you for your recent letter on air-to-ground telephone
service. I have reviewed the information you submitted and
am of the opinion that both types of service you provide are
subject to tax.

Because the calls originate in Houston, the calls to locations
in Texas will be subject to both state and Houston city sales
tax. Calls to points outside Texas will be subject to state tax
only.

As we discussed, you may give your supplier of long- distance
service a resale certificate in-lieu-of tax.

This opinion is based on the facts you presented. Other facts,
though similar, may yield different results.

If you have questions or need more information, please call
our toll-free number 1-800-531-5441. My direct line number is
463-4680 [FAX (512) 475-0900]. You may write to me in care of
Taxability Section.

Sincerely,

Al Van Allen
Taxability Section
Legal Services Division