Were live telephone-answering charges taxable when provided to both in-house executive-suite clients and off-site telephone clients?

Plain-English summary

The Comptroller said the business's charges for providing live telephone-answering services were subject to Texas sales tax.

That answer covered both kinds of customers described in the request: executive-suite clients housed with the operator's staff, whose calls were handled like an in-office receptionist, and telephone-only clients located elsewhere. The customer's Texas location did not change the taxability of the answering charge.

What this means for you

Executive-suite and secretarial-service operators

Treat separately charged answering-service fees as taxable under this letter even when the customer works in the same suite and the service resembles ordinary receptionist work.

Accountants and tax professionals

The letter refers the seller to Rule 3.286 for its collection and reporting responsibilities. It does not reproduce that rule's procedures, rates, or filing deadlines, so verify the current version before applying the historical guidance.

Common questions

Were answering services for clients housed in the executive suite taxable? Yes.

Were telephone-only customers treated differently? No. The letter said the charges were taxable regardless of the customer's Texas location.

Did the letter explain how to file and remit the tax? It referred the seller to enclosed Rule 3.286 but did not reproduce those instructions.

Citations and references

• 34 Tex. Admin. Code Rule 3.286 (seller responsibilities, as cited in the letter)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9201L1156B05

Original ruling text

January 30, 1992

Dear **:

Thank you for your recent letter which is restated in part with response
below.

I am the owner of an Executive Suite/Secretarial Service business where
many of my clients are actually housed with my staff. We do answer
their phones as a receptionist would in any business, taking messages
if the person is not in the office or informing the individual by intercom
of the caller. We also have some telephone clients or customers who are
not housed in our building; and I presume these phone answering services
are taxable for this category of client.

I have requested a sales tax permit to pay any taxes I owe on this part
of my business but am still confused on how I make these payments.

If you would please clarify in writing what services are taxable (if I
must pay tax on those in-house clients within the suites), how the
taxes are to be collected, when the taxes are due and where the amounts
should be deposited, I would appreciate it and be glad to comply.

Response: As we discussed in our recent telephone conversation, your
charges for providing answering services are subject to sales tax
regardless of the Texas location of the customer. Your responsibilities as a
seller are explained in the enclosed Rule 3.286.

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 or write.
You may reach me by calling toll free, (800) 531-5441. My direct line
number is (512) 463-4680. The number for FAX transmissions is (512)
475-0900. You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division