Does using a third-party answering service that routes paged messages to a mobile locksmith count as having a "place of business" at that answering service's location for local sales tax purposes?

Plain-English summary

A mobile locksmith business used a third-party answering service that received calls and routed paged messages to the locksmith out in the field, and asked the Comptroller whether that answering service's location counts as the locksmith's "place of business" for local sales and use tax purposes (which matters for figuring out which city/county/local tax rates apply). The Comptroller confirmed it does NOT -- an answering service that simply routes paged messages isn't a "place of business." A place of business is the established outlet, office, or location where the locksmith actually receives service orders and from which they operate to provide locksmith services -- merely having calls relayed through a third-party paging/answering service doesn't create that kind of established location. The Comptroller pointed to its Guidelines for Collecting Local Sales and Use Tax for more detail on how to determine a business's local tax location.

What this means for you

Mobile service providers (locksmiths, repair techs, and similar field-service businesses) using answering services

Don't treat your answering service's location as a "place of business" for local sales tax sourcing purposes. It's just a message-routing point, not the established office/outlet from which you actually receive orders and operate your business.

Accountants and tax professionals

This is a useful, general "place of business" test for local tax sourcing: does the location function as an established outlet/office where the business receives orders and operates from, versus merely relaying messages? An answering/paging service fails that test regardless of the underlying business (locksmith, plumber, other mobile trades).

Common questions

Q: Does using a third-party answering service create a "place of business" at the answering service's location?
A: No, per this letter -- routing paged messages isn't the same as operating an established outlet or office from that location.

Q: What actually counts as a "place of business" under this letter?
A: Per this letter, the established outlet, office, or location where the business actually receives service orders and from which it operates to provide its services.

Citations and references

Guidance:

• Comptroller's Guidelines for Collecting Local Sales and Use Tax

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9703311L

Original ruling text

March 18, 1997

Dear **:

Thank you for your faxed letter concerning your conversations with Rene Cruz
and Van Savage regarding the collection of local sales and use taxes.

This is to confirm that the third-party answering service that simply routes
the paged messages is not considered a "place of business" of CORP A. A place
of business would be the established outlet, office, or location where the
locksmith actually receives the orders for service and from which he or she
operates to provide locksmith services. The enclosed Guidelines for Collecting
Local Sales and Use Tax has additional information about the collection of
local taxes.

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

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Policy, Comptroller of Public
Accounts.

Sincerely,
David Somerville
Tax Policy Division