Connecticut State Department of Revenue Services

Ruling 91-21

Sales and Use Tax
Telecommunications Service

FACTS:

  1.  A corporation engaged in business as a long-distance carrier and subsidiaries thereof [hereinafter collectively referred to as "the Company"] provide a telecommunications service known as "900 Commercial Service"
  2. The Company has not submitted any of its contracts with the businesses [hereinafter referred to as "900 Sponsors"] for which 900 Commercial Service is designed, but characterizes this service as enabling a 900 Sponsor to offer its goods and services for a fee to telephone callers [hereinafter referred to as "end users"] calling the 900 number assigned to the 900 Sponsor by the Company.

The Company further characterizes its contractual obligations as follows:

  • The Company is required to bill and collect from an end user purchasing goods or services from a 900 Sponsor the fee established by the 900 Sponsor for placing a call to the 900 number. (If the end user has not chosen the Company as his or her long-distance carrier, the Company provides the Local Exchange Carrier with the billing information, and the Local Exchange Carrier collects the fee from the end user.)
    • For an aggregate charge that is either a flat charge for placing a call, or a charge based on the duration of a call, to the 900 number, the Company is providing (i) telecommunications service to the 900 Sponsor and (ii) billing and collection service to the 900 Sponsor.
  • The Company will pay over to the 900 Sponsor the amounts collected, offset by (i) the amount due to the Company for telecommunications service; (ii) the amount due to the Company for billing and collection service; and (iii) an amount estimated to equal the uncollected amount billed end users.

The Company will contract with 900 Sponsors that conduct opinion polls [hereinafter referred to as Product 1]. By calling a selected 900 number, a Product 1 end user will be able to vote without speaking. The fee established by 900 Sponsors will be a flat charge for making the call. Some 900 Sponsors will conduct opinion polls for end users with touch-tone telephones, who, by touching appropriate numbers on the telephone touch-pad, will be able to answer specific questions.

  1.  The Company will contract with 900 Sponsors that provide a recorded message service [hereinafter referred to as Product 2]. By calling a selected 900 number, a Product 2 end user will be able to listen to a prerecorded message. The fee established by 900 Sponsors will be either a flat charge for making the call or a variable charge based on the duration of the call.

  2. The Company will contract with 900 Sponsors that provide financial or other information [hereinafter referred to as Product 3] to end users with touch-tone telephones. By calling a selected 900 number and by entering a personal identification number, a Product 3 end user will be able to gain access to various data files by touching appropriate numbers on the telephone touch-pad. The fee established by 900 Sponsors will be either a flat charge for making the call or a variable charge based on the duration of the call.

  3. The Company will contract with 900 Sponsors that provide interactive conversation [hereinafter referred to as Product 4]. By calling a selected 900 number, a Product 4 end user will be able to converse with one person, or with a number of other end users. The fee established by 900 Sponsors will be a variable charge based on the duration of the call.

  4. The Company will contract with 900 Sponsors that solicit donations thereto [hereinafter referred to as Product 5]. Some of the 900 Sponsors may be organizations described in 26 U.S.C. §501(c)(3). By calling a selected 900 number, a Product 5 end user will be able to pledge a specific amount. Some 900 Sponsors will play a prerecorded message thanking Product 5 end users for their pledge. The fee established by 900 Sponsors will be a flat charge that equals the amount of the pledge.

  5. The Company will contract with 900 Sponsors that sell tangible personal property [hereinafter referred to as Product 6]. By calling a selected 900 number, a Product 6 end user will be able to purchase particular goods. The fee established by 900 Sponsors will be a flat charge that equals the purchase price of the goods.

  6. The Company's 900 Commercial Service is provided on an interstate basis pursuant to a tariff on file with the Federal Communications Commission and on an intrastate basis pursuant to a tariff on file with the Department of Public Utility Control, State of Connecticut. Rates for the Company's 900 Commercial Service are established in those tariffs.