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Ezel / Tax Rulings / TX
TX 9103L1101E09 Sales and/or Use Tax (State,Local,MTA) 1991-03-29

Could a pay-telephone provider give its local-exchange supplier a resale certificate instead of paying tax on the purchased access service?

Short answer: Yes. Texas said the provider could issue a resale certificate to the supplier for basic local-exchange service purchased to facilitate public pay-telephone service.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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

A pay-telephone provider bought basic local-exchange service to facilitate its sale of pay-phone service to the public. The Comptroller said the provider could give its local-exchange supplier a resale certificate instead of paying tax on that purchased access service.

What this means for you

The letter treated the purchased local-exchange service as an input acquired for resale through the provider's public pay-telephone service. Its body addressed the resale certificate, not the provider's customer-side tax calculation.

Common questions

Could the provider issue a resale certificate? Yes.

What purchase did the certificate cover? Basic local-exchange service used to provide public pay-telephone service.

What rule did the letter cite? Rule 3.344(f).

Citations and references

  • 34 Tex. Admin. Code Rule 3.344(f) — resale treatment cited by the letter

Source

Original ruling text

March 29, 1991

Dear **:

Thank you for your recent letter regarding your purchase of basic
local exchange service to facilitate your sale of pay telephone
service to the public.

You may issue your supplier of basic local exchange service a
resale certificate in lieu of tax. The rule reference for this
is 3.344(f). I am enclosing a copy of the rule for your file and
a resale certificate that you may file with your supplier.

This opinion is based on the facts you presented. Other facts,
though similar, may yield different results.

If you have questions or need more information, please call our
toll-free number 1-800-531-5441. My direct line number is 512-
463-4680 [FAX (512) 475-0900]. You may write to me in care of
Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

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