Sales Tax State Activity Update - August 2005

Vermont Gets Telecom in Line With SSTP

The governor of Vermont, James Douglas, has signed legislation that makes the definition of "telecommunications service" conform with the "Streamlined Sales Tax Project" definition.

The definition of "telecommunications service" means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. The term "telecommunications service" includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content without regard to whether such service is referred to as voice-over internet protocol service or is classified by the FCC as an enhanced or value added service.

The definition also has a long list of exclusions such as data processing and information services, radio and television audio and video programming services, and digital products delivered electronically such as music, video, or ring tones. The list makes it clear that installation or maintenance services, directory advertising, internet access and ancillary services (such as call waiting, call forwarding, voice mail and caller ID) are also exempt.

The Act also changes the imposition of section (§ 9771) and the exemption section (§ 9741) of the statute. This change states that coin-operated telephone service is exempt from the taxation of telecommunications service; it is no longer separately exempt. The change to section 9771 also exempts paging service, private communications service; however directory assistance charges continue to be subject to sales tax.

(ACT 75 [H. 521], signed by the governor 6/23/05, effective 7/1/05)

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