Tax Type
Retail Sales and Use Tax
Description
Public Service Corporations;Telephone Utility Accounts
Topic
Taxability of Persons and Transactions
Date Issued
03-04-1985
March 4, 1985
Dear***
This will reply to your letter of January 15, 1985 in which you submit a request for ruling on the applicability of the sales and use tax to certain items charged to telephone utility accounts * * * and * * * prescribed by the Federal Communications Commission on its Uniform System of Accounts for Class A and Class B Telephone Companies.
Tangible personal property charged to telephone utility accounts 725 (Unclassified Western Electric billing) and 749 (Centralized information system expense) is deemed subject to the sales and use tax under Section 630-10-87 of the Virginia Retail Sales and Use Tax Regulations. However, it is felt by * * * that certain property charged to those accounts is used directly in the rendition of its public utility service and is therefore exempt from the tax.
The property in question in account 725 consists of central office and private branch exchange equipment which will ultimately be charged again to accounts that are deemed non-taxable under Regulation 630-10-87. In effect, account 725 is used as a clearing account by * * *. The property in question in account 749 is * * * computer system supporting telephone repair operations. The computer enables * * * to test a customer's telephone line and print the results of the test at repair service facilities for handling.
Based upon the information provided, * * * may consider account 725 as having no application to the extent that tangible personal property charged to the account is ultimately charged to other accounts deemed either taxable or exempt. Other tangible personal property charged to account 725 should be considered taxable unless a ruling is obtained from the department stating otherwise. In addition, the computer equipment referenced in your letter and charged to account 749 may be considered exempt from the tax as it is used directly in the servicing and/or repair of telephone lines and equipment. Of course, other tangible personal property charged to account 749 remains taxable unless a ruling to the contrary is obtained from the department. I will certainly take into account your suggestion that account 749 be footnoted when Regulation 630-10-87 is revised at some future date.
It should be noted that this ruling is applicable only to * * * and not to other telephone utilities.
Dear***
This will reply to your letter of January 15, 1985 in which you submit a request for ruling on the applicability of the sales and use tax to certain items charged to telephone utility accounts * * * and * * * prescribed by the Federal Communications Commission on its Uniform System of Accounts for Class A and Class B Telephone Companies.
Tangible personal property charged to telephone utility accounts 725 (Unclassified Western Electric billing) and 749 (Centralized information system expense) is deemed subject to the sales and use tax under Section 630-10-87 of the Virginia Retail Sales and Use Tax Regulations. However, it is felt by * * * that certain property charged to those accounts is used directly in the rendition of its public utility service and is therefore exempt from the tax.
The property in question in account 725 consists of central office and private branch exchange equipment which will ultimately be charged again to accounts that are deemed non-taxable under Regulation 630-10-87. In effect, account 725 is used as a clearing account by * * *. The property in question in account 749 is * * * computer system supporting telephone repair operations. The computer enables * * * to test a customer's telephone line and print the results of the test at repair service facilities for handling.
Based upon the information provided, * * * may consider account 725 as having no application to the extent that tangible personal property charged to the account is ultimately charged to other accounts deemed either taxable or exempt. Other tangible personal property charged to account 725 should be considered taxable unless a ruling is obtained from the department stating otherwise. In addition, the computer equipment referenced in your letter and charged to account 749 may be considered exempt from the tax as it is used directly in the servicing and/or repair of telephone lines and equipment. Of course, other tangible personal property charged to account 749 remains taxable unless a ruling to the contrary is obtained from the department. I will certainly take into account your suggestion that account 749 be footnoted when Regulation 630-10-87 is revised at some future date.
It should be noted that this ruling is applicable only to * * * and not to other telephone utilities.
Rulings of the Tax Commissioner