Fixed Monthly Charges for Mobile Voice Services Subject to Tax in New York

Thursday, June 26th, 2014

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New York

The New York Division of Tax Appeals ("Division") recently determined that a taxpayer's fixed monthly charges for its mobile voice services were subject to sales tax.

New York taxes receipts from telephone and telegraph services, except for interstate and international services. Mobile voice services sold by home service providers are subject to tax when sold for a fixed periodic charge.

The taxpayer sold both interstate and intrastate mobile voice services for a fixed monthly charge. The taxpayer argued that the charges were not subject to tax because they were for interstate voice services.

The Division determined that the taxpayer's monthly charges were subject to tax. New York expressly taxed mobile voice services sold for a fixed periodic charge. The exception from tax for interstate telephone services did not apply to interstate mobile voice services. It did not matter that part of the fixed monthly charge was for interstate services. The charge was therefore subject to tax.

The Division also ruled that the federal Mobile Telecommunications Sourcing Act did not preempt New York's imposition of tax on interstate voice services. The federal law, the Division ruled, left room for New York to impose tax on these services.

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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 or call 866.578.8193.

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