How were Louisiana telecom companies supposed to collect a 4.5-cent monthly tax that could not be billed in half-cent increments?

Plain-English summary

Louisiana Revenue Ruling 17-001 gave telecommunications companies a workable billing schedule for a statutory tax of 4.5 cents per month.

Because companies could not collect half a cent from an individual customer, the Department authorized this cycle:

• 4 cents per month during the fourth quarter;
• 4 cents per month during the first quarter;
• 5 cents per month during the second quarter; and
• 5 cents per month during the third quarter.

Over 12 months, the customer paid 54 cents—the same as 4.5 cents multiplied by 12.

The charge applied per wireline access line and per telephone number for a covered wireless handset. Data-only wireless devices and prepaid wireless devices were excluded under the ruling.

Act 273 changes

Act 273 of 2017:

• reduced the wireline tax from five cents to 4.5 cents per month per line;
• extended the 4.5-cent tax to each wireless handset telephone number; and
• took effect for the calendar quarter beginning October 1, 2017.

The tax applied to residential and business customers of local and wireless telecommunications companies operating in Louisiana.

Authorized quarterly schedule

The company collected from each covered customer and remitted within 30 days after the end of the calendar quarter on Form R-5702-L or its successor.

Timely-remittance deduction

La. R.S. 47:1061(A)(2) allowed a collecting company to deduct up to 3% of the amount collected and timely remitted to the Department.

The deduction was disallowed if the remittance was late.

The collected tax was not subject to another tax, fee, or assessment and was not treated as company revenue under the provision quoted in the ruling.

Penalty protection

A company following the alternating schedule was treated as complying with Act 273.

The Department said it would not assess penalties or interest for the resulting undercollection during the two four-cent quarters.

What this means for you

Historical telecom billing

For periods beginning October 1, 2017, verify that the customer's annual charge followed the four/four/five/five quarterly pattern.

Wireless providers

The ruling covered wireless handset telephone numbers but excluded data-only and prepaid devices.

Current providers

Do not assume the 2017 amount, exclusions, form, deduction, or due dates remain current. Check later law and Department instructions.

Common questions

Q: Why not charge 4.5 cents every month?

A: The ruling said companies could not collect half-cent amounts from individual customers.

Q: How much did the schedule collect per year?

A: 54 cents per covered line or wireless handset number.

Q: Were prepaid phones covered?

A: No under the ruling. Prepaid and data-only wireless devices were excluded.

Q: Could a company keep part of the tax?

A: It could take a deduction of up to 3% only when collection and remittance were timely.

Citations and references

• La. R.S. 47:1061(A) — rate, covered lines and devices, deduction, and treatment of collected tax
• Act 273 of the 2017 Regular Session — statutory changes effective October 1, 2017
• LAC 61:III.101(C) — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 17-001

Original ruling text

Revenue Ruling No. 17-0011
September 13, 2017
Telecommunication Tax for the Deaf
Implementation of Act 273 of the 2017 Regular Session
Purpose:
The purpose of this Revenue Ruling is to provide clarity regarding the collection of the four and
one-half cents tax per month per line for each wireline access line and per telephone number for
each wireless handset device on each residential and business customer of a local or wireless
telecommunication service company operating in Louisiana.
Law:
Act 273 of the 2017 Regular Session of the Louisiana Legislature amended La. R.S.
47:1061(A)(1) to decrease the Telecommunication Tax for the Deaf from five cents per month to
four and one-half cents per month per line on each residential and business customer of a local
telecommunication company operating in Louisiana. The Act also imposes a four and one-half
cents tax per month per line for each wireless handset device on each residential and business
customer of a wireless telecommunication service company operating in Louisiana. The tax does
not apply to wireless devices used only for data purposes or to prepaid wireless devices. The Act
is effective for the calendar quarter beginning October 1, 2017.
La. R.S. 47:1061(A)(2) provides that a local or wireless telecommunication service company
collecting and remitting the tax is allowed a deduction, not to exceed three percent, from the
amount collected and remitted to the Louisiana Department of Revenue. If the remittance to the
department is not made timely, the deduction will be disallowed.
La. R.S. 47:1061(A)(3) provides that the tax collected and remitted by the local or wireless
telecommunication service company is not subject to any tax, fee, or assessment, nor is it to be
considered revenue of the local or wireless telecommunication service company.
Facts and Analysis:
A tax of four and one-half cents per month imposed per line for each wireline access line and per
telephone number for each wireless handset device on each residential and business customer of
a local or wireless telecommunication service company operating in Louisiana will yield fiftyfour cents over a twelve month period of time. Local or wireless telecommunication service
companies operating in Louisiana are unable to collect one-half cent from their residential and
business customers. Therefore, the department authorizes local or wireless telecommunication
service companies to collect and remit the tax from each residential and business customer at
four cents per month for two consecutive calendar quarters and five cents per month for two
A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.

Revenue Ruling No. 17‐001
September 13, 2017
Page 2 of 2

consecutive calendar quarters on an alternating basis. The tax rate per calendar quarter shall be
determined using the following table:
Calendar Quarter

Months

Tax Rate Per
Quarter

Filing Date

Fourth Quarter

October, November, and December

4 cents per month

January 30

First Quarter

January, February, and March

4 cents per month

April 30

Second Quarter

April, May, and June

5 cents per month

July 30

Third Quarter

July, August, and September

5 cents per month

October 30

The quarterly remittance will be in accordance with the above schedule. As such, on an annual
basis, the total amount collected and remitted will be fifty-four cents per line as contemplated by
Act 273 of the 2017 Regular Session of the Louisiana Legislature. The tax will be collected from
each residential and business customer and remitted by each company on or before thirty days
after the close of each calendar quarter to the department on Form R-5702-L or its successor. If
the tax is remitted in accordance with this Revenue Ruling, local or wireless telecommunication
service companies will be considered to have complied with the requirements of Act 273 and
will not be assessed penalties or interest for the under collection of tax for the Fourth and First
calendar quarters.
Ruling:
Beginning October 1, 2017, local or wireless telecommunication service companies are
authorized to collect and remit the Telecommunication Tax for the Deaf from each residential
and business customer at four cents per month for two consecutive calendar quarters and five
cents per month for two consecutive calendar quarters on an alternating basis in accordance with
above schedule. Penalties or interest will not be assessed when local or wireless
telecommunication service companies collect and remit four cents per calendar quarter.
Kimberly L. Robinson
Secretary of Revenue

1

Revenue Ruling updated on September 21, 2017 to clarify the rate of the tax is 4.5 cents.

A Revenue Ruling is issued under the authority of LAC 61III.101 (C). A Revenue Ruling is written to provide
guidance to the public and to Department of Revenue employees. It is a written statement issued to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law and is not
binding on the public. It is a statement of the department's position and is binding on the department until
superseded or modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.