Note: This chapter is intended to cover only sales tax as it applies to telecommunications services. Items or services may be taxable for sales tax under other provisions but not defined as a telecommunications service.
Telecommunications services became subject to the Limited Sales, Excise and Use Tax on October 1, 1985. At that time, intrastate long distance telecommunications services were taxable for state sales tax but basic local exchange telephone service was not included. On October 1, 1987, interstate long distance telecommunications services and basic local exchange telephone service were added.
Section 151.0101, Tax Code, defines "taxable services," which includes telecommunications services. Section 151.0103 goes on to define telecommunications services. State sales taxes are due on telecommunications services between locations in Texas. Local sales tax is due on telecommunications services if the local jurisdiction has repealed the exemption on telecom services. See Publication #96-339, “Jurisdictions that Impose Local Sales Tax on Telecommunications Services” to determine which local jurisdictions impose tax and their effective dates. State sales tax is also due on many interstate telecommunications services. See Publication #94-132, “Sales Tax on Telecommunications Services” for more detailed explanations.
Telecommunications providers will also be subject to other taxes on telecommunications services. See prior chapters detailing information on:
- Telecommunications Infrastructure Fund (TIF), tax codes 24 and 25; (Chapter 4)
- PUC Gross Receipts Assessment, tax code 47; (Chapter 2)
- 911 Fees and Surcharges, tax code 54. (Chapter 3)
- Basic local exchange telephone service
- the provision by a telephone company of each access line and each dial tone to a fixed location for sending and receiving telecommunications in the telephone company's local exchange network, including private line, party line, limited or unlimited access.
- Billing address
- location where telecommunications customer receives their billing
- Long-distance telecommunication
- a service which both originates from and is billed to a telephone number or billing or service address within Texas.
- Private line
- a telephone circuit dedicated for use between specific locations. Calls can only be made between the points and can originate at either end of the line. It does not have access to a switch to allow calls to be made to numbers not directly connected to the private line.
- Service address
- location where telecommunications customer receives service
- Telephone Company
- a person that owns or operates a telephone line or telephone in this state and charges for its use.
- Telecommunications Services
- the electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics, or any other method now in existence or that may be devised, including but not limited to long-distance telephone service.
- Telephone Prepaid Calling Card
- a card or other item, including an access code, that represents the right to make one or more telephone calls for which payment is made in incremental amounts and before the call is initiated. Does not include a card sold by mechanical means for consideration of one dollar or less.
- Telephone Answering Services
- the receiving and relaying of telephone messages by a human operator. The term does not include the automated receiving and relaying of telephone messages included within the definition of "telecommunications services."
Note: See also Rule 3.344, and STARS document 8810L0902C01, a comprehensive listing of terminology provided by the Texas Telephone Association.
- Tax Code:
- = 26
- Sections 151.0101, 151.0103, 151.01032 and 151.0104, Tax Code
- Rule 3.344. Telecommunications Services
- Tax Rate:
- State sales tax = 6.25%, plus applicable local sales taxes
- If 1-30 days late, penalty is 5% of the tax due. If more than 30 days late, penalty is 10% of the tax due.
- Variable interest rates. Credit interest will be allowed on credits for periods due on or after 1-1-2000 at the same rate as the delinquent interest.
- Due Date:
- Monthly filers = 20th of the month following the month
Quarterly filers = 20th of the month following the calendar quarter
- Reported Data:
- All information is maintained on the mainframe computer under tax code 26. A history of reported information can be ordered using XIRPTS, Audit History.
- Any information provided to the Comptroller relating to sales tax is confidential and exempt from public disclosure under Sec. 151.027, Tax Code.
Charges for taxable telecommunications services must be separately stated from charges for non-taxable services on bills and invoices. Tax must be collected from the customer whether payment is made by cash or debit card. This includes hotels or motels or the owners or lessors of office or residential buildings or developments that contract and pay for telecommunications services and sell those services to their guests or tenants.
A telecommunications provider must pay tax on the purchase of equipment that is used to provide the service but that is not transferred to the customer. For example, a local exchange phone company must pay tax on switches it uses to provide phone service. If, however, the equipment is transferred to the customer as part of the taxable service, the service provider may give his supplier a resale certificate in lieu of tax. For example, a long-distance provider could purchase automatic dialers tax free if those dialers were provided to customers as part of the telecommunications service. However, the service provider must pay tax on equipment bought for company use and not actually transferred to the customer.
Equipment that is sold to the customer (title is transferred), and repairs to customer-owned equipment are subject to sales tax imposed by local taxing jurisdictions even if the local jurisdictions exempt telecommunications services from local sales tax. (9008L1037G13)
If equipment is sold bundled with a contract for service (i.e., wireless):
- If the wireless equipment retailer is not a telecom provider, then the retailer may issue a resale certificate or pay sales/use tax when the phone is purchased, depending on the sales price of the phone:
- If the charge for the phone is sold for a nominal amount (less than 25% of the cost) or free, the customer does not owe tax on the phone. The retailer would owe use tax on the purchase price if tax was not paid at time of purchase.
- If the charge for the phone is 25% or more of the total cost, the customer owes sales tax on the purchase price of the phone.
- If the wireless equipment retailer of the equipment is the telecom provider:
- The 25% nominal criteria does not apply.
- The retailer/provider can issue a resale certificate for the purchase of the phone and provide it to the customer tax-free because it is being transferred as an integral part of the service.
- For periods on or after 09/01/2007 = the phone may be purchased tax-free by the equipment retailer or the telecom service provider as long as the payment for the service is a condition for receiving the phone. (Source: HB 3319 of the 80th Legislature, 2007).
State law provides that telecommunications services are subject to the state sales tax, but are exempt from all local sales taxes. However, the governing body of a city, county, transit authority, or other special purpose district may vote to repeal the exemption and adopt the tax on telecommunications. The local sales tax is limited to telecommunications services occurring between locations within Texas, so all interstate telecommunications are excluded. ( Tax Code, Section 321.210)
The local sales tax is collected based on where the call originates. If the origin of the call cannot be determined, the local tax collected is based on the address to which the call is billed.
For a listing of jurisdictions imposing tax on telecommunications services, and the effective dates, see Publication #96-339, revised 7/2000.
Local tax could not have been imposed on telecommunications services prior to October 1, 1987.
The Mobile Sourcing Act became effective on August 1, 2002. This federal law (4 U.S.C. Sections 116-126) says that “the provision of mobile telecommunications services is a matter of interstate commerce within the jurisdiction of the United States Congress under Article I, Section 8 of the United States Constitution.” Mobile telecommunications services are to be sitused for sales tax based on the “place of primary use” regardless of where the call originates. (200208353L)
Due to the passage of the federal law, the Tax Code was amended, effective August 1, 2002, to add Section 151.061. That section states:
“Place of primary use” = the street address that is representative of where the customer’s use of the mobile telecommunications service primarily occurs. That location must be the residential street address or the primary business street address of the customer that is within the licensed service area of the home service provider.
In accordance with the federal law, Section 151.061(c) applies the following to state and local sales taxes:
- mobile telecommunications services provided in a taxing jurisdiction to a customer, the charges for which are billed by or for the customer’s home service provider, shall be deemed to be provided by the customer’s home service provider; and
- all charges for mobile telecommunications services that are deemed to be provided by the customer’s home service provider in accordance with this Act are authorized to be subjected to tax, charge, or fee by the taxing jurisdiction whose territorial limits encompass the customer’s place of primary use, regardless of where the mobile telecommunications services originate, terminate, or pass through, and no other taxing jurisdiction may impose taxes, charges, or fees on charges for such mobile telecommunications services.
If the person that contracts for the service with the service provider is not the end user, the end user’s place of primary use determines the sourcing. For example, a company that provides cellular service for all its salesmen in the state would receive the billing at the company headquarters, but the place of primary use is the address of each of the salesmen and local sales tax is due accordingly. (200208353L)
Through August 31, 1997, telephone prepaid calling cards were considered to be telecommunications services and subject to sales tax. When a telephone prepaid calling card or debit card was sold, the seller could either (1) include the tax in the price of the card and remit the appropriate tax as the card was used, or (2) collect and remit sales tax on the face value of the card when it was sold.
Telephone prepaid calling cards sold as telecommunications services before September 1, 1997, remain prepaid telecommunications services until the prepaid services have been consumed, and the receipts from those services are taxable.
Effective September 1, 1997, telephone prepaid calling cards are considered to be the sale of tangible personal property rather than telecommunications services. Sales tax is due on the face value of the card at the time of sale. However, calling cards sold in vending machines for $1 or less are still considered to be telecommunications services. (9801270L)
Telephone calls are telecommunications services, and persons selling these services must have a sales tax permit. The owner of the coin-operated or card-operated telephone is operating as a telephone company selling telecommunications services. (9202L1162B08)
The owner of the pay phone may issue a resale certificate to purchase basic local exchange and long distance services tax-free, which are re-sold to the users of the pay phones. If the owner of the pay phone pays tax to the supplier of the basic local exchange or long distance service, then the owner may take credit for taxes paid on that service by reducing taxable sales on their sales tax report by the amount on which tax was paid to the supplier. However, the owner must take care to calculate local taxes correctly since local taxes are due only in certain jurisdictions and only on basic local exchange and intrastate long distance.
The owner of the pay phones must report tax on the receipts from the sale of local and long distance telephone service from the pay phones located in Texas. The amount a customer pays to make a call includes tax. When remitting tax, the pay phone owner or lessor should back the tax out of its total receipts by dividing the receipts by 1 plus the tax rate. This figure represents the amount subject to tax. Again, local tax is due only if the jurisdiction have approved the local tax, and only on basic local exchange and intrastate long distance service.
The owner or lessor of the phone owes tax on the cost of the telephone equipment at time of purchase. (200103222H) If the seller of the equipment bills the owner of the pay phone for installation, tax is due on the installation charge as well as the equipment. Tax is not due on the installation charge made by a person who only installs equipment which was purchased from a third party. (9202L1162B08)
Repealed: The 80th Legislative Session, House Bill 1459, amended Tax Code, Section 151.0103, to exempt from sales tax the portion of the sales price of the pay telephone service which is paid for by coin. This exemption is effective September 1, 2007. The exemption was not extended to pay telephone service that is paid for by credit card; it is specifically limited to coin revenue.
Sales or use tax is due on all tangible personal property used to provide the taxable service but not transferred to the care, custody, and control of the customer. Tangible personal property used to perform a taxable service is not considered resold unless care, custody, and control of the property is transferred to the purchaser of the service.
The Comptroller's hearings decisions have consistently held that the care, custody and control of pay telephone equipment is not transferred to the customer, and thus cannot be purchased tax-free. The owner of the equipment retains control of it, cares for and maintains the equipment, and retains full custody of the equipment at all times. (200103222H)
A hotel/motel cannot issue a resale certificate for the purchase of switching equipment. They also cannot issue a resale certificate for the telecom service if they are not charging the hotel guests for calls. If the hotel/motel is charging the guest for calls, then they must allocate the percentage of office/business usage to guest usage. The hotel/motel can claim resale on the guest usage but not on the business/office usage.
The hotel/motel also must pay tax on the telephones which are placed in the guest rooms. The hotel/motel retains custody and control of these telephones at all times. (200404637H)
A telecommunications company's purchase of network equipment, including towers, antennas, cables, amplifiers, batteries, etc., does not qualify as exempt manufacturing equipment under Section 151.318(a)(2). A telecom service provider is not a manufacturer and the provider's network equipment does not produce tangible personal property for ultimate sale; the exemption provided in Section 151.318 is limited to equipment that does so. Therefore, the exemption provided by Section 151.318(a)(2) is not available to exempt the telecom service provider's network equipment. (200509459H)
Electricity purchased by a telecommunications service provider is taxable and not exempt. Network equipment does not convert electricity into electrical signals that are resold to customers. Electricity is used by the telecom service provider in providing the taxable service and is therefore taxable. (200503154H)
Some cellular phone companies purchase cell phones to give to customers “free” when the customer signs a contract for service. (The cellular phone retailer is generally an agent for the provider of the telecommunications service.) If these phones are provided to the customer with the sale of the telecom service, the phones may be purchased for resale. If the phone is sold for less than 25% of its normal cost, then charge is nominal. If sold for nominal price, the seller owes use tax on the purchase price (cost) of the phone (if the seller is not a telecom provider). (9402199L)
For periods on or after 09/01/2007 = the phone may be purchased tax-free by the equipment retailer or the telecom service provider as long as the payment for the service is a condition for receiving the phone. (Source: HB 3319 of the 80th Legislature, 2007).
(References italicized in parentheses refer to documents on STARS.)
- Accounting code charges, i.e., for use by a customer to identify individual users and allocate the cost of long distance service
- Account initiation fees, new or existing
- Administrative charges, i.e., for system engineering and consultation, network analysis reporting, or access coordination
- Answering services, human operator, effective October 1, 1991 (9111L1138F12)
- Automated receiving and relaying of telephone messages if charged by the utility company (i.e., centralized voice mail service where incoming calls are recorded and stored for subsequent retrieval by subscribers who pay a flat periodic fee for use of the system) (9612928H)
- Auxiliary services (call waiting, call forwarding, etc.)
- Bad debt deductions for taxable receipts on which sales tax was previously paid
- Bad debt recoveries related to taxable receipts
- Bandwidth, sold as a separately stated charge from web hosting or internet (200209314L)
- Basic feature charges, i.e., fees for services of call arrangement, call allocation, message referral, and time interval routing
- Basic local exchange telecommunications service
- Caller mail box provided by newspaper to advertisers, where parties can call the mail box and respond to an ad (9504136L)
- Charges for call detail and traffic analysis (8911L0962D07)
- Calling cards used as credit cards (not prepaid calling cards) where call originates in Texas and is billed to customer’s home or business telephone. If the call originates in Texas and the destination is out of state, no local tax will be due. (9904357L)
- Coin-operated telephone receipts (including private pay/customer-owned pay telephones) (9202L1162B08, 9603034L)
- Commercial mobile telephone service, including roaming charges
- Local sales tax on cellular telephone telecommunications service is determined by the place of primary use, according to Section 151.051, Tax Code. Prior to 8-1-02, local sales tax was determined by the location of the cell site that received and re-transmitted the incoming signal. If the cellular company does not track those locations, local tax was collected based on the rate in effect at the customer's billing address. (9611891L)
- Tax is due on any “programming fees” which are charges made by the wireless retailer for a technical service performed on the phone’s internal components to make it operational and to activate it with the wireless provider. (9402199L)
- Charges relating to access to or actual usage of a computer communications network, including:
- slots dedicated to certain customers to assure usage during peak times
- fixed prices for use of a virtually private network with a mesh configuration
- charges for usage of the network based on time and data volume. (9703143H)
- Connect, Disconnect, and Reconnect fees for service to ultimate consumer
- Directory assistance charges (9702548H)
- Dispatch service for truck radios if connected to public switch network (9709332L)
- Electronic transmission of recorded messages (9911915L, 9108L1129F13, 9108L1145F09)
- Electronic tax return filing (8802L0864A11, 9011L1059D08, 9201L1157B08, 9606615L) Long distance service used to transit forms to IRS may be purchased tax free if the phone line is dedicated for that purpose only. A resale certificate should be issued to the long distance provider. If there is no dedicated line, each call may be recorded and its cost and credit taken on the sales tax return. Local sales tax also applies if the electronic tan return transmission is intrastate.
- Email, separately stated from the internet service, if it originates in Texas and is billed to a telephone number, billing, or service address in Texas (9703143H, 9701189L, 200208399L 9310319L)
- Email only IDs (9909669L)
- Enhanced services (i.e., metro service, extended area service, multi-line hunting, PBX trunk, etc.) (200505180H)
- Equipment sales, leases, rentals of telecommunication equipment provided to a customer as part of the telecommunications service, including separately stated charges for installation, maintenance and repair.
- Separately stated charges for labor to install wiring will not be taxable if the wiring is installed in new structures or residences in such a manner as to become a part of the realty.
- Separately stated charges for labor to install wiring in existing nonresidential real property are taxable.
- If charges for wiring and equipment are not separated, the total charge will be treated as a sale and installation of tangible personal property.
- Prior to September 1, 2007, equipment sold to customers and invoiced separately from telecommunications services is taxable for sales tax (both state and local) but not as a telecom service. Separately stated charges for maintenance or repair of customer-owned equipment are treated similarly. Effective 9-1-07, “sale for resale” includes the transfer of a wireless communication device as an integral part of a taxable service, regardless of whether there is a separate charge for the equipment, or whether the purchaser is the provider of the taxable service, if payment for the service is a condition of receiving the wireless communication device.
- Expedite charges, i.e., for the expedited processing a customer's service order
- FAX service (9709807L, 200001015L) Fax providers can issue resale certificates for the purchases of the fax machines, and the charge to the customer for the fax service is taxable.
- Hotels/motels’ charges to hotel guests for telecommunications services
- If the hotel pays sales and TIF tax to their telecommunications provider, and they also charge their hotel guests for any telecommunications services, i.e., marked-up long distance calls, the hotel owes sales tax and TIF on the marked-up portion of the long distance calls.
- If the hotel issues a resale certificate to their telecommunications provider, the hotel should not pay sales tax or TIF to the provider. The hotel will then owe sales tax and TIF on all telecommunications services used and charged to guests, including local, long distance, fax, etc.
- If the hotel issues a resale certificate to their telecommunications provider, and pays TIF tax to the provider but not sales tax, the hotel owes sales tax and TIF on all telecommunications services used and resold. No credit can be allowed for TIF taxes paid to the telecomm provider. Since TIF tax follows sales tax, the resale certificate issued is in lieu of both sales and TIF taxes.
- Installation of telecom services (service connection fees)
- Insurance for repair of telecom equipment, but not insurance for replacement of telecom equipment, unless both are included in a single charge (8609L0765E11)
- Interest earned on security deposits (200204035L)
- Internet telephony billed on a bulk basis
- LAN: charges for connecting local area networks in different locations (9703143H)
- Lease or sale charges by the public utility for any service, product, or commodity described in the PURA
- Long distance charges, intrastate and interstate, which are both originated from and billed to a telephone number or billing or service address within Texas. If a call originates in Texas and is billed to a Texas service address, the charge is taxable even if the invoice, statements, or other demand for payment is sent to an address in another state.
- intrastate long-distance telephone calls are subject to both state and local sales taxes
- interstate long-distance telephone calls are subject to state sales tax only
- Maintenance and repair of equipment, charges in connection with telecom service, including pagers (9902257L).
- Minimum billing charges (200204035L)
- Minimum usage charges, i.e., a charge to customers who fail to meet their network commitment for a specified period of time (9703143H)
- Mobile radio repeater service, where a signal from a two-way radio is received, amplified, and re-transmitted to other radios for communication with each other (9505133L)
- Monthly fees for 800 or 900 telephone number service (flat rate) (8911L0962D07)
- Motor vehicle GPS tracking systems using cellular telephone service purchased for resale (9706571L)
- Move/change charges or order processing fees for telecommunications equipment changes (9612928H)
- Paging services, including airtime fees, pager equipment and accessories provided to a customer as part of a telecommunications service (9902257L). Local tax is based upon the location where the transmission originates. (8907L0947F04)
- “Patching” service, where phone lines are connected allowing the callers to talk directly. May be done by live operators or with the use of “patching” equipment.
- charges for both labor and equipment are taxable.
- If the charge for the ““patching”” is not separated from the charge for the live answering service, the entire charge is taxable. (8912L0970G02)
- Penalties and forfeited customer deposits (200204035L)
- Prepaid calling cards sold before September 1, 1997.
Revenue from services provided through rechargeable telephone prepaid calling cards sold prior to 9-1-97 are subject to sales tax until the value purchased prior to that date is consumed. For cards sold on or after 9-1-97, the prepaid calling cards are considered to be tangible personal property, and sales tax is due on the sales price of the card. (200106332L, Tax Policy News - Sept/Oct 1997, Tax Policy News - July 1998, 9904357L)
- Prepaid calling cards sold through a vending machine for $1 or less (200106332L, 9801270L)
- Prepaid paging cards, separately stated (prepaid telecommunications services) (9910771l)
- Prepaid cards for downloading music, videos, ring tones, etc. (taxable for sales tax but is not a telecom service).
- Private line services, including charges for related equipment. Taxable receipts include:
- channel termination charge imposed at each channel termination point within the state
- total channel mileage charges imposed between channel termination points or relay points within the state
- an apportionment of the interoffice channel mileage charge that crosses the state border. An apportionment on the basis of the ratio of the miles between the last channel termination point in Texas and the state border to the total miles between the channel termination point and the next channel termination point in the route will be accepted. Other methods may be used if first approved in writing by the comptroller.
- where private line or similar service is billed on the same bill as local exchange service, the private line will be taxed as originating at the site of the local exchange service.
- where private line or similar service is billed on a separate bill not associated with local exchange service, the private line will be taxed as originating at the customer's primary serving address as determined at the time the service was initiated. (8708L0829G01)
- Radio signal booster service (8509L0663D03)
- Receipts from long distance carriers for handling the billing of the customers' end user charges for intrastate charges
- Returned check charges if collected by a debt collector (classified as a debt collection service and not a telecommunications service)
- Reimbursements: charges that represent taxes or assessments levied on a utility and that are passed on to its customers. These charges become a part of the sales price of the telecom service and are subject to tax in the same manner as the service itself, when passed through to the customer :
200204037L) These include:
- municipal franchise fees
- Texas Universal Service Fund assessment (TUSF) (9805729L)
- Federal Universal Service Fund assessment (FUSF) (200202792L, 9805729L)
- Expanded local calling service surcharges (ELCS)
- Local number portability service charges (LNP)
- FCC approved customer line charges
- Telecommunications Infrastructure Fund Fee (TIF) amounts collected from the customer (regardless of how it is labeled)
- PUC Gross Receipts Assessment
- Federal presubscribed interexchange carrier charges (PICC)
- Extended Area Service Fee (EAS)
- FCC Subscriber Line Charge (SLC)
- Sales to governmental entities and exempt organizations
- Satellite transmission service to transmit signals from one location to another, including video uplink and downlink (200010834L, 9810843L, 8906L0944F10)
- Special services charges, i.e., for special reports and information provided for customers with services such as 800 numbers
- Teleconferencing service charges if Texas customer initiates the call (9002L0978E02)
- Telegraph services
- intrastate telegraph services are subject to both state and local sales taxes
- interstate telegraph services are subject to state sales tax only
- TIF Reimbursement: Any amount collected from the customer as a TIF reimbursement (regardless of the exact name used) which exceeds the actual tax rate remitted to the Comptroller, including all TIF amounts collected from exempt entities
- Tower access in connection with telecommunications services (9709332L)
- Transmission of signals (not provided by commercial radio or television stations licensed or regulated by the FCC) (9004L1019F12, 9103L1095D08, 9105L1115A07)
- Transmittal of information between automated clearing houses and merchants (9910803L, 9809821L)
- Two-way radio service (9505133L, 9206L1176F03, 8910L0964G07, 8509L0663D03, 9006L1025D12). Local sales tax is based on the location of the telecom device (repeater) that originates the amplified signal for transmission
- VOIP: Voice over Internet Protocol, if the call originates in Texas (200205077L)
- Voice Mail Messages: (9108L1145F09)
(References italicized in parentheses refer to documents on STARS)
- Access charges paid by interexchange carriers to other carriers for access to local telephone networks, if the local access charges are passed through to their subscribers (Attorney General Opinion JM-1280)
- Assessments and fees imposed upon the telecommunications customer rather than the telecommunications service provider:
- 911 Emergency Service fees and surcharges
- Federal Excise Tax
- Broadcasts by commercial radio or television stations licensed or regulated by the FCC.
- Deposits for telecommunications equipment or service (8911L0962D07)
- Directory advertising or sales
- Directory listings, if charges are separately stated (9011L1061C01)
- Effective 9-1-07, revenue from sale of wireless communication devices sold to customers as an integral part of a taxable service, regardless of whether there is a separate charge for the wireless communication device, or whether the seller of the wireless device is also the provider of the telecommunication service, if payment for the service is required as a condition of receiving the device.
- Telecommunications services sold to exempt organizations and persons exempted from paying sales tax under Chapter 151, Tax Code, if used for the exempt purpose (9107L1122B11, 9110L1151C11, 20002792L)
- Separately stated finance charges and late fees collected from customers. (9902257L)
- Insurance for repair of telecom equipment
- Internet access service that enables users to access the internet or email. The first $25 of the monthly charge is exempt from sales tax regardless of the billing period used by the service provider or whether the internet access service is bundled with another service. Effective 10-1-99. (9809821L)
- Long-distance telecommunications services which are not both originated from and billed to a telephone number or billing or service address within Texas.
- Maintenance or repair of customer-owned equipment if separately stated and invoiced (9902257L)
- Telephone prepaid calling cards sold on or after September 1, 1997. (Sec. 151.01032, Tax Code) (200106332L) These are taxable as TPP but not as telecommunications.
- Private line service, if only one-way communication initiated outside Texas
- Returned check charges collected by telecom provider directly from customer
- Sales for resale where resale certificate was validly issued. (9911888L, 200106332L, 200508291L, 200505180H)
- Telegraph service that originates outside Texas.
- Unlisted phone number, a separately stated charge for non-published number