How did Texas tax telecopy, telex, translation, and person-delivered voice-message services between Texas and the Soviet Union?

Plain-English summary

The requester proposed telecopy, telex, translation, and voice-message services connecting U.S. customers with recipients in the Soviet Union. The Comptroller applied one location test to the long-distance telecommunications segments: a charge was subject to Texas sales tax only when the service originated in Texas and was billed to a Texas telephone number, billing address, or service address.

For a telecopy originating in Texas and sent first to another city, that first segment was taxable if the customer's telephone, billing, or service address was in Texas. A later segment from the second city to a Soviet destination was not taxable. If the customer's telephone number or address was outside Texas, neither segment was taxable. The Comptroller applied the same answer when the document was hand-delivered after the first segment, sent onward by telex, or transmitted in reverse through the described cities.

Separately stated translation charges for converting English to Russian or Russian to English were not taxable. Charges for having a person call and deliver a recorded voice message were also not taxable.

What this means for you

The 1991 letter separated each communication segment and each service type. For long-distance telecommunications, both the Texas origin and the Texas billing connection mattered. Translation and human delivery of a message received separate nontaxable treatment.

The source uses redacted city labels, so the page does not infer locations beyond the letter's express statement that the first city was in Texas. Telecommunications sourcing rules have changed over time; verify current law before applying this historical framework.

Common questions

Were document-translation charges taxable? No.

When was the Texas-origin telecopy segment taxable? When the customer's telephone number, billing address, or service address was also in Texas.

Was the onward foreign telecopy or telex segment taxable? No, under the described facts.

Were person-delivered voice messages taxable? No.

Did hand delivery after a telecopy change the telecommunications answer? No. The Comptroller applied the same segment-by-segment answer.

Citations and references

The letter did not cite a numbered statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9107L1122F03

Original ruling text

July 31, 1991

Dear **:

Thank you for your recent letter regarding the various communication services
your business will be providing between this country and the Soviet Union. You
asked that we confirm your understanding of the Texas sales tax to each of the
situations you described.

Scenario One. An American oil company writes a letter addressed to at person in
the Soviet Union. He telecopies the letter to COMPANY A in CITY A, Texas. The
telecopy letter is captured on our computer in CITY A. We send it later to
another computer we own in CITY B. If the Soviet recipient is not in CITY B but
in CITY C, we telecopy it from CITY B to CITY C. On our charges to the oil
company, we separate the telecopy charges. One charge is for telecopying the
document from CITY A to CITY B. A second charge is for telecopying the document
to CITY C.

Response: Your company is providing long distance telecommunications services.
Long distance telecommunications services are subject to Texas sales tax if the
service both originates from and is billed to a telephone number, billing or
service address in Texas. Under the facts presented, we know the service
originates in CITY A. You didn't indicate where the telephone number, billing
or service address was located. If the telephone, billing or service address of
your customer is in Texas, you would be correct to collect sales tax on the
charge for telecopying the document from CITY A to CITY B. The charge for
telecopying the document from CITY B to CITY C would not be subject to Texas
tax. If your customer's telephone number, billing or service address is not in
Texas, neither transaction would be subject to Texas tax.

Scenario two is the same as Scenario one with the exception that we hand
deliver the document in CITY B. Our bill breaks down the charge to the oil
company, showing one charge based on telecopying the document to CITY B and a
separate charge based on delivering the document.

Response: Same as the answer to scenario one.

Scenario three is like Scenario one, except that the document in CITY B is
typed into a telex machine and sent from CITY B to CITY C by telex. We break
down our charges showing one charge for telecopying the document to CITY B and
a second charge based on the number of words for sending the document by telex
from CITY B to CITY C.

Response: Same as the answer to scenario one.

Scenario four is like Scenario one, except that the document is translated in
CITY B from English to Russian. The translated document is then sent by
telecopy or telex from CITY B to CITY C. Our invoice would show three items.
One for telecopying the-document from CITY A to CITY B, another for translating
the document in CITY B from English to Russian, and a third charge for
telecopying the document from CITY B to CITY C.

Response: Same as the answer to scenario one on the charges for
telecommunications. The charge for translating the document in CITY B is not
taxable.

Scenario five is like Scenario one, but in reverse. A party in CITY C
telecopies a document from CITY C to CITY B. The document is sent from CITY B
to CITY A. We in turn send it from CITY A to the oil company. We will bill the
oil company for all three charges, breaking down each segment in terms of cost.

Response: Same as the answer to scenario one.

Scenario six is like Scenario five, except that the document is translated in
CITY B from Russian to English. Four charges will appear on the oil company's
statement, one for the charge for sending the document from CITY C to CITY B,
another for translating the document in CITY B from Russian to English, another
for sending the document from CITY A to the oil company.

Response: Same as the answer to scenario one on the telecommunications service.
The charge for the translation in CITY B is not taxable.

Scenario seven. We also will be offering a voice mail system. An oil company
calls CITY D. We tape the message. Later that night we send the message to CITY
B. If the recipient is in CITY B, CITY B calls the recipient and plays the
message. If the recipient is in CITY C, CITY B calls CITY C and delivers the
message.

With the voice mail, two charges will appear on the oil company's statement.
One for delivering the voice message to CITY B, and another for delivering the
voice mail message from CITY B to CITY C.

Response: The charge for having an person call to deliver a message is not
subject to Texas tax. The charge for the translation in CITY B is not taxable.

Scenario eight. This is like scenario seven, except that the message in CITY B
is translated into Russian. A Russian speaking party calls from CITY B to
deliver the message. Three separate charges will appear on the bill, one for
delivering the voice mail message from CITY D to CITY B, another for
translating the document from English to Russian, and a third from translating
the voice mail message from CITY B to CITY C.

Response: The charge for having an person call to deliver a message is not
subject to Texas tax. The charge for the translation in CITY B is not taxable.

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

If you have any questions or need more information, you may call me toll free
at 1-800-252-5555, extension 3-4633. The regular number is 512/463-4633.

Sincerely,

Wanda Hutcheson
Tax Administration Division