More Texas towns tax telecommunications, October 2016
- Sales Tax Rate Changes
- Oct 11, 2016 | Gail Cole
As of October 1, 2016, the number of Texas tax jurisdictions imposing local sales tax on telecommunications services has increased.
Although state sales tax applies to these services in all jurisdictions, telecommunications services are exempt from local sales tax unless the governing body of a city, county, or special purpose district votes to tax them at the local level.
More than 500 jurisdictions in Texas already apply local sales tax to telecommunications services. The following jurisdictions tax these services as of October 1:
- City of Dish
- Jim Hogg County
- East Aldine Management District
- Fate Municipal Development District
- Harris County Emergency Services District No. 47
- Liberty County Emergency Services District No. 7
- Montgomery County Emergency Services District No. 2 and No. 14
- Williamson County Emergency Services District No. 3
- Zapata County Assistance District
Rates for different types of telecommunications services are determined differently. For example, the local rate of tax for mobile telecommunications services is based “on the customer’s place of primary use, generally the residential or primary business street address.” For example, a salesperson based in Austin pays the Austin rate on all mobile calls, even when making calls from Houston or Dallas.
The rate for telecommunications services billed call-by-call or per transmission is based on the place where the call originates: “If a visitor in Houston calls someone on Beaumont and charges the call to their home phone in El Paso, Houston local tax is due.”
However, the local rate for calls “not billed call-by-call” is “determined by the customer’s place of primary use." Additional information is available through the Texas Comptroller of Public Accounts (Publication 96-339, revised October 2016).
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