Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
515.0000 SERVICE ENTERPRISES GENERALLY—Regulation 1501
(e) MISCELLANEOUS ACTIVITIES
515.1338 Telephone Debit Cards. Telephone debit cards are sold in increments of $10.00, $20.00, or $50.00 and entitle the purchaser to make long distance telephone calls at a flat rate per minute until the card is fully used or expires.
The true object of the transfer of the card is the future telephone service. The card is incidental to the telephone services. Accordingly, the sale of the telephone debit cards is a service and not subject to sales tax when transferred to the purchaser. However, providers of a service are the consumers of material and supplies used in connection with the service. When debit cards, or the material from which they are made, are purchased by the seller of the cards, applicable sales or use tax will be incurred. 6/16/93.