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Ezel / Tax Rulings / TX
TX 8511L0676E11 Sales and/or Use Tax (State,Local,MTA) 1985-11-21

How did the Comptroller's 1985 internal memo classify directory, disconnect, prewiring, conduit, pole, deposit, refund, and access charges?

Short answer: The memo gave taxable and nontaxable classifications for several telecom charges, made two results conditional, and left cable-pair and interconnect issues open.

Apply this to your situation

This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is historical internal Texas Comptroller guidance, not a taxpayer-specific private letter ruling. It records preliminary classifications from a discussion of a telephone company's long list of billable services; some answers are conditional, and the memo expressly requests more information for cable pairs and interconnect leases. The extracted body says “Director” for several listing, advertising, and sales entries, while STAR's subject metadata refers to telephone-directory charges; this page does not silently rewrite the source. It does not carry letter-ruling reliance protection or establish current telecommunications or sales-tax law. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

This internal memorandum listed several preliminary telecommunications tax classifications. In the extracted text, “Director listings charges” and “Director advertising” were nontaxable, while directory assistance and “Director sales” were taxable. Disconnect charges were taxable, and prewiring charges were not.

Rent for conduit space or pole-line space provided to another telephone company was nontaxable. Forfeited customer deposits could fall under sales tax or gross receipts tax depending on allocation. Unclaimed refunds or overcharges followed the treatment of the underlying overcharged transaction and whether money was refunded to the customer.

Access charges appeared to be telephone-company charges to another telecommunications provider and were not taxable as a sale for resale. The memo needed more information about cable and cable-pair transactions and requested sample billings and contracts for interconnect leases.

Common questions

Were disconnect charges taxable? Yes.

Were prewiring charges taxable? No.

Was rent for conduit or pole-line space taxable? No, when rented to another telephone company under the memo.

Did the memo resolve cable pairs and interconnect leases? No.

Citations and references

The reproduced internal memorandum cites no numbered statute or rule.

Source

Original ruling text

DATE: November 21, 1985

TO: ***
FROM: *****
SUBJECT: Taxability of Telecommunications Services

I discussed the list with *** and ***** with the
following conclusions.

Director listings charges - not taxable
Directory assistance - Subject to sales tax
Director advertising - Not taxable
Director sales - Subject to sales tax
Disconnect charges - Subject to sales tax
Prewiring charges - Not taxable.
Rent revenues for conduit space to another telephone company - Not taxable
Rent revenues for pole line space - Not taxable
Forfeited customer deposits - This could be subject to either sales tax
or gross receipts tax depending on how the money is allocated.
Unclaimed refunds or overcharges - Taxable or not taxable depending on
what transaction was overcharged and to refunded to the customer.
Access charges - This appears to be a charge by a telephone company to a
provider of telecommunications services and is not taxable as a sale for
resale.
Cable and cable pairs for another telephone company - Need more information.

Regarding the lease of interconnects, we would like additional information
including any sample billings and contracts you might be able to get.

*** with the phone company has told me that their billable services
include 256,000 transactions but that it is extremely repetitious. He
is trying to help me get a usable list.

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