Sales Tax State Activity Update - September 2005

Massachusetts Amends Telecommunication Services Rule

Massachusetts has amended a sales and use tax Rule dealing with telecommunication services. The removed provision stated that if a telecommunication service had originated or was received in Massachusetts but wasn't charged to the origination or termination service address, it was deemed to be sold in Massachusetts if it was paid for in Massachusetts.

Additional changes to the Rule include:

• New definitions for "post-paid calling service" and "prepaid calling arrangements"
• A revised definition of the term "service address".

The amendment adds two new sub-sections for post-paid services (services charged to a credit card or a telephone number not associated with the call) and prepaid calling arrangements. The rules for tax on prepaid calling arrangements reflect a statutory change previously announced by the Department of Revenue in Technical Information Release 03-05.

(830 CMR 64H.1.6, Massachusetts Department of Revenue, effective 7/15/05)

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