Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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S

515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501

Annotation 515.0011.200

(a) IN GENERAL—SERVICE DISTINGUISHED FROM SALE

515.0011.200 Facsimiles. A company is part of a national network which sends printed information over telephone lines through signals generated by a telecopier machine to reproduce an exact copy at a distant location. The operation is accomplished by establishing public locations which perform the sending and receiving operations. A customer brings his chart, photo, contract, or any other material to the nearest station. The charge made to the customer consists of a transmission fee plus the normal telephone charges involved in the transmission. The station operator places the material into the facsimile transmission unit and then places a call to the station nearest the desired destination. The customer's materials are then automatically transmitted. The receiving station operation removes the facsimile from the facsimile receiving unit and acknowledges that the message has been received. The receiving station then calls the local recipient who can either pick up the message or have it delivered by special messenger.

The service element outweighs the sales element in these transactions such that the "true object" of the transaction is the performance of a service and not the property produced by the service. What the customer desires is a rapid mailing or communication service. The company is the consumer and not the retailer of tangible personal property. Tax does not apply to the company's receipts from the operation of its photocopy transmission service. 10/27/70.