006.05.06 Ark. Code R. 005-GR-7

Current through Register Vol. 49, No. 10, October, 2024

Rule 006.05.06-005-GR-7 - SERVICES SUBJECT TO TAX - TELEPHONE TELECOMMUNICATIONS AND RELATED SERVICES

A. DEFINITIONS.

1. "Ancillary service" means a service that is associated with or incidental to the provision of "telecommunications services", including without limitation, detailed telecommunications billing, directory assistance, vertical service, and voice mail services.

2. "Conference bridging service" means an ancillary service that links two (2) or more participants of an audio or video conference call and may include the provision of a telephone number. Conference bridging service does not include the telecommunications service used to reach the conference bridge.

3. "Detailed telecommunications billing service" means an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement.

4. "Directory assistance" means an ancillary service of providing telephone number or address information.

5. "Fixed wireless service" means a telecommunications service that provides radio communication between fixed points.

6. "Mobile wireless service" means a telecommunications service that is transmitted, conveyed, or routed regardless of the technology used, whereby the origination or termination points of the transmission, conveyance, or routing are not fixed, including, by way of example only, telecommunications services that are provided by a commercial mobile radio service provider.

7. "Paging service" means a telecommunications service that provides transmission of coded radio signals for the purpose of activating specific pagers. Such transmissions may include messages or sounds.

8. "Telecommunications service".

a. 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. 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 for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice over internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. Telecommunications services include, but are not limited to fixed wireless service, mobile wireless service, paging service, and value-added nonvoice data service.

b. Telecommunications service does not include the following:

(1) Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser's primary purpose for the underlying transaction is the processed data or information;

(2) Installation or maintenance of wiring or equipment on a customer's premises;

(3) Tangible personal property;

(4) Advertising, including but not limited to directory advertising;

(5) Billing and collection services provided to third parties;

(6) Internet access service;

(7) Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, and routing of such services by the programming service provider. Radio and television audio and video programming services include, but are not limited to, cable service as defined in 47 U.S.C. § 522(6), as in effect on January 1, 2007, and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 C.F.R. 20.3, as in effect on January 1, 2007;

(8) Ancillary services; or

(9) A digital product delivered electronically, including but not limited to software, music, video, reading material, or a ring tone.

9. "Value-added nonvoice data service" means a service that otherwise meets the definition of telecommunications services in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance, or routing.

10. "Vertical service" means an ancillary service that is offered in connection with one (1) or more telecommunications services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services

11. "Voice mail service" means an ancillary service that enables the customer to store, send, or receive recorded messages. Voice mail service does not include any vertical services that the customer may be required to have in order to utilize the voice mail service.

B. BUNDLED TRANSACTIONS. A bundled transaction is the retail sale of two (2) or more products, except real property and services to real property, where the products are otherwise distinct and identifiable and the products are sold for one non-itemized price. (See GR-93) In the case of a bundled transaction that includes a telecommunications service, ancillary service, internet access, or audio or video programming service the following rules will apply:

1. If the price is attributable to products that are taxable and products that are nontaxable, the portion of the price attributable to the nontaxable products is also subject to tax unless the provider can identify, by reasonable and verifiable standards, the portion of the products that are nontaxable from its books and records.

a. The books and records must be kept in the regular course of business, and include books and records used for non-tax purposes.

b. Books and records include, but are not limited to, financial statements, general ledgers, invoicing and billing systems and reports, and reports for regulatory tariffs or other regulatory matters.

2. If the price is attributable to products that are subject to tax at different tax rates, the total price is attributable to the products subject to the highest tax rate unless the provider can identify, by reasonable and verifiable standards, the portion of the price attributable to the products subject to the lower tax rate from its books and records.

a. The books and records must be kept in the regular course of business, and include books and records used for non-tax purposes.

b. Books and records include, but are not limited to, financial statements, general ledgers, invoicing and billing systems and reports, and reports for regulatory tariffs or other regulatory matters.

3. The provisions of this section shall apply unless superseded by federal law.

006.05.06 Ark. Code R. 005-GR-7

Ark. Code Ann. § 26-52-315