TR 41: Telephone and Telecommunication Services
The Boulder Revised Code (Code) states at paragraph 3-2-2(a)(8) "A sales tax is due upon the purchase price paid for the transmission of intrastate electronic messages as defined in section 3-1-1, BRC, 1981." Transmission of intrastate electronic messages defined in paragraph 3-1-1, "Taxable services" (1) BRC, 1981 as "Transmission of intrastate electronic messages originating within the city by means of microwave, telephone, telegraph, or cable transmission, including cable, microwave, or other television service for which a charge is imposed."
The following lists specific services and their taxability:
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Description
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Tax Status
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Comments
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Regular Monthly Service
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Taxable
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Sometimes referred to in the industry as dial tone
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Municipal Surcharge or Franchise Fee
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Exempt
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These are fees levied by the City against the phone company, not the customer. Part of monthly charge shown as a separate line item on the bill.
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Local Usage Charge
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Taxable
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Metered service, in lieu of regular monthly service charge, customer is charged per call
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Directory Assistance charge
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Taxable
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Taxed because electronic messaging is involved (see above Code section)
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Interexchange Carrier charge
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Taxable
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Access charges for use of primary owner's infrastructure system by other phone service providers
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Emergency 911 tax/fee
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Exempt
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This is a tax used to fund regional 911 service.
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Telephone Relay Surcharge
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Exempt
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Local fee used to fund special services for the hearing impaired.
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Voice/Text & all other messaging
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Taxable
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Unregulated service
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Call Waiting
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Taxable
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Unregulated service
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Intrastate Long Distance
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Taxable
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Calls originating in Boulder to other Colorado numbers
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Interstate Long Distance
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Exempt
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Calls originating in Boulder to numbers outside the state of Colorado
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Directory Charges
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Exempt
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Charges for listing in white or yellow pages, considered to be advertising
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Other unregulated services
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Taxable
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Taxable if electronic messaging is involved. (see above Code section)
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Universal Service Fund
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Taxable
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Charge is part of purchase price
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Colorado Service Fund
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Taxable
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Charge is part of purchase price
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VOIP
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Taxable
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Voice over internet protocol
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Telecommunications originating within the City to another location within the State of Colorado (intrastate) are subject to Boulder sales/use tax. Telecommunications to locations outside the State of Colorado (interstate) are not taxable. The full price charged to a customer by a hotel/motel for use of a telecommunications system is subject to sales/use tax. (See TR23: "Hotels and Motels" for detailed information.)
Determination of whether a service is taxable depends on whether electronic messaging is involved. Electronic messaging goes beyond the sound of someone's voice, fax machine or computer on line. Practically everything that happens in telecommunications involves some form of electronic messaging. For example, each time a key on a touch tone phone is pushed an electronic message is sent down the lines to a switch which records it and acts upon it as appropriate. Therefore, most charges for telecommunications are subject to Boulder sales/use tax.
Examples:
- A Boulder hotel charges a guest an additional 50% over the charge billed by its telecommunications service provider for interstate and intrastate calls. The hotel pays sales tax to its provider on the amount charged by the provider. The hotel must either charge its guest sales tax on the mark-up of 50% or remit use tax to the City on the mark-up.
- A telecommunications provider provides its Boulder customers with phone service both inside the State of Colorado (intrastate) and outside the State of Colorado (interstate). The provider must collect Boulder sales tax on calls originating within the City to locations within the State of Colorado, but not on calls to locations outside the State of Colorado.
Last Updated on Wednesday, 11 July 2012 12:19
Finance