How did Texas apply the January 1987 rate increase to advance-billed telephone service, dated calls, and bulk-billed items without service dates?

Plain-English summary

The original November 19 letter said advance December billings that included January telephone service should be apportioned between the old and new rates. For intrastate long-distance calls, telephone companies could identify the call date and apply the appropriate rate.

The original letter also would have applied the higher rate to bulk-billed items without a specific service date when billed on or after January 1, 1987. The December 10 correction changed that point because the Comptroller recalled a prior one-month grace period. Undated bulk-billed items such as excess directory-assistance calls used the increased rate when billed on or after February 1, 1987.

What this means for you

The historical transition used service dates where available, allocation for advance bills spanning the effective date, and a special corrected billing-date rule for items that could not be tied to a date.

Common questions

How were December bills covering January service handled? Apportioned.

How were dated long-distance calls handled? Using the rate appropriate to the call date.

When did the higher rate begin for undated bulk-billed items? February 1, 1987 under the correction.

Citations and references

• The letters cited no numbered statute or Comptroller rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8612L0779A01

Original ruling text

December 10, 1986

Gentlemen:

It has been brought to my attention that in 1985, the Comptroller allowed
telephone companies a one month grace period on bulk billed items before
they began to collect sales tax. We want to implement the increased
sales tax rate in the same manner. Therefore, a correction is needed to my
November 19, 1986 letter.

Charges for bulk billed item such as excess directory assistance calls
that cannot be identified or billed by specific date will be subject to
sales tax at the increased rate when billed on or after February 1, 1987.

I'm sorry if my lapse of memory caused you or your members any
inconvenience.

Please feel free to contact us if you have additional questions. You may
write us, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4633.

Sincerely,

Tax Administration Division

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

November 19, 1986

Gentlemen:

We have had some questions from telephone companies about the way to
handle the tax increase which goes into effect January 1, 1987.

Since most customers are billed in advance of service, it is possible for
a customer to be billed in December while the lower rate is in effect for
services to be received in January. An example of this would be charges
for metro service, or other enhanced services, call waiting, call
forwarding, etc.. Therefore, December billings which include in part
charges for January should be apportioned.

Bulked-billed items, such as excess directory assistance calls, that
cannot be tied to a specific date will be subject to the higher tax rate
if billed on or after January 1, 1987. Of course, telephone companies
can tell when intrastate long distance calls have been made and the
appropriate tax rate should be applied to these calls.

I hope this information is helpful to your members.

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4633.

Sincerely,

Tax Administration Division