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Ezel / Tax Rulings / TX
TX 8512L0680A10 Sales and/or Use Tax (State,Local,MTA) 1985-12-02

Which telephone-company charges to radio common carriers and cellular providers were taxable in Texas?

Short answer: Switch connections, transmitter lines, and enhanced services were taxable; administrative basic local exchange service was not, and resale certificates could apply.

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 an official 1985 Texas Comptroller taxpayer-response letter applying then-current telecommunications tax treatment to radio common carriers, cellular switches, transmitters, basic local exchange service, enhanced services, and resale certificates. It expressly says different facts could change the opinion. Current federal and state telecommunications regulation, service definitions, sourcing, resale, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. Taxpayer-identifying details are redacted. 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

Telephone-company charges for the connection between a radio-common-carrier or cellular switch and the central office were taxable. Charges for lines between the switch and the carrier's or provider's transmitters were also taxable. The carrier or cellular provider could give the telephone company a resale certificate for those services.

Conventional basic local exchange telephone service used to administer the carrier's or provider's business was not taxable. Enhanced services were taxable.

Common questions

Were switch-to-central-office connections taxable? Yes.

Were switch-to-transmitter lines taxable? Yes.

Could the provider issue a resale certificate? Yes, for the two listed taxable services.

Was administrative basic local exchange service taxable? No, but enhanced services were.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

December 2, 1985

Dear ***:

Thank you for your letter of November 20, 1985, concerning the taxability
of various charges made by a telephone company to radio common carriers
(RCCs) and cellular telephone providers.

The charges for the connection between the RCC or cellular switch and the
telephone company central office are taxable.

The charges for the lines between the RCC or cellular switch and the RCC
or cellular transmitters are taxable.

The RCC or cellular telephone provider may issue a resale certificate to
the telephone company in lieu of paying sales tax on charges for the above
services.

Charges for conventional telephone service (basic local exchange telephone
service) which is used by the RCC or cellular provider in administering
their business are not taxable. Charges for enhanced services are taxable.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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