Company's Provision of Internet Services Not Taxable Telecommunications Services in Tennessee

Thursday, October 3rd, 2013

 
 
Share
Link
Tennessee
General

The Tennessee Court of Appeals recently ruled that a company's dial-up and broadband internet services were not taxable telecommunications services.

The taxpayer provided two internet services. Internet Service Providers (ISPs) bought these services to enable end users to access the internet. The taxpayer used telecommunications services to provide its internet access services. The taxpayer had collected sales tax on its charges for internet access services and later filed for a refund.

Tennessee taxes services that are specifically identified as taxable, including telecommunications services. "Telecommunication" is communication be electric or electronic transmission of impulses and includes transmission by or through any media such as wires, cables, microwaves, radio waves, or light waves. "Basic" telecommunications services are subject to tax. "Enhanced" services are not. Tennessee considers the provision of internet access an enhanced service.

The Court of Appeals ruled that the taxpayer's provision of internet access was not subject to tax. Although the taxpayer used telecommunications services to provide internet access, the primary purpose of the service was to provide internet access. Because the provision of internet access was an "enhanced" service, it was not taxable. The taxpayer's charges were therefore not taxable.

http://www.tncourts.gov/sites/default/files/level3communications_opn.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Louisiana Sales Tax Rates and Exemptions Set to Change...

Friday, May 25th, 2018 -Louisiana's sales tax rates and exemptions are set to change July 1, 2018, when several 2016 law changes will ...

Florida Exempts Generators Used in Assisted Living...

Thursday, May 24th, 2018 -Florida recently adopted an emergency rule on exempt sales of emergency generators for use at nursing homes an...

Washington Penalty Reduction Program

Monday, May 21st, 2018 -Businesses that apply to register with Washington's Marketplace Fairness Penalty Reduction Program by June 30,...

Fuel Used to Heat Detached Garages Taxable in Maine

Monday, May 21st, 2018 -Maine Revenue Services recently released a publication explaining that sales tax applies to fuel that is used ...

Cloud Software No Longer Taxable in Indiana

Thursday, May 17th, 2018 -Effective July 1, 2018, cloud software will no longer be taxable in Indiana. Indiana taxes the sale, lease,...

Sales Tax Increase in the Historic Triangle Region of...

Monday, May 14th, 2018 -Effective July 1, 2018, there will be an additional one percent (1%) regional sales and use tax imposed in the...