35 Miss. Admin. Code Pt. IV, Subpt. 6, Ch. 02 — Telecommunications

100 Definitions
101 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 points.
Telecommunications service also includes the 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.
101.01 Telecommunications services do not include:

# 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
customer whose primary purpose for the use of the service is to obtain the processed
data or information.

# 2.

Installation or maintenance of wiring or equipment on a customer's premises.

# 3.

Tangible personal property.

# 4.

Directory advertising and other 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
of delivery, and the transmission, conveyance or routing of the service by th e
programming service provider.

# 8.

Ancillary services.

# 9.

Digital products delivered electronically, including but not limited to, software, music,
video, reading materials or ring tones.
102 Ancillary services means services that are associated with or incidental to the provision
of telecommunications services, including, but not limited to, detailed
telecommunications billing, directory assistance, vertical service and voice mail service.
103 Bundled transaction means a transaction that consists of distinct and identifiable
properties or services which are sold for a single non-itemized price but which are treated
differently for tax purposes.
104 Call-by-call basis means any method of charging for telecommunications services where
the price is measured by individual calls.
105 Communications channel. Communicating data from one location to another requires
some form of pathway or medium. These pathways, called communication channels, use
two types of media: cable (twisted -pair wire, cable, and fiber -optic cable) and broadcast
(microwave, satellite, radio, and infrared).
106 Conference bridging 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 does not include the telecommunication services used to reach the
conference bridge.
107 Customer means the person or entity that contract s with the seller of telecommunications
services or the end user of the services if the end user is not the contracting party. A
reseller of telecommunications services is not considered a customer.
108 Detailed telecommunications billing service means an ancillary service of separately
stating information pertaining to individual calls on a customer's billing statement.
109 Directory assistance means an ancillary service of providing telephone number
information and/or address information.
110 End user means the person who utilizes the telecommunications service.
111 Home service provider means the facilities -based carrier or reseller with which the
customer contracts to provide mobile telecommunication services.
112 International means a telecommunications service that originates or terminates in the
United States and terminates or originates outside the United States, respectively.
113 Interstate means a telecommunications service that originates in one (1) United States
state or United States territory or possession, and terminates in a different United States
state or United States territory or possession.
114 Intrastate means a telecommunication s service that originates in one (1) United States
state or United States territory or possession, and terminates in the same United States
state or United States territory or possession.
115 Mobile telecommunications service is a type of telecom service. Mississippi has adopted
the definition of "mobile telecommunication service" as stated in Section 124(7) of
Public Law 106 -252 (Mobile Telecommunications Sourcing Act). Mobile telecom
services include, but are not limited to: mobile phone service, mobile radio service, two -
way mobile radio service, radio repeater service, wireless communication service,
satellite telephone service, mobile local and long distance service, paging service, cellular
roaming charges and beeper service.
116 Place of primary use means the street address representative of where the customer's use
of the telecommunications service primarily occurs, which will be either the residential
street address or the primary business street address of the customer. The place of
primary use must be within the licensed service area of the home service provider.
117 Prepaid calling service means the right to access exclusively telecommunications
services, which must be paid for in advance and which enables the origination of calls
using an access number or authorization code and that is sold in predetermined units or
dollars which the number declines with use in a known amount.
118 Prepaid wireless calling service means a telecommunications service that provides the
right to utilize mobile wireless service as well as other non -telecommunications services
such as the download of digital products which must be paid for in advance that is sold in
predetermined units or dollars of which the number declines with use in a known amount.
119 Private communication service means a telecommunication service that entitles the
customer to exclusive or priority use of a communications channel or group of channels
between or among termination points, regardless of the manner in which such channel or
channels are connected, and includes switching capacity, extension lines, stations and any
other associated services that are provided in connection with the use of such channel or
channels.
120 Service address means the location of the telecommunications equipment to which a
customer's call is charged and from which the call originates or terminates, regardless of
where the call is billed or paid.
121 Vertical service means an ancillary service that is offered in connection with one 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.
122 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.
123 (Reserved)
200 Levy
201 Income received from all charges for intrastate telecommunications services is taxable at
the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section
27-65-19(d)(i)(1). When intrastate toll charges are split between two or more companies,
the company doing the billing to and collecting from the customer will be responsible for
collecting and remitting the applicable sales tax.
202 Income received from all charges for interstate telecommunications services is taxable at
the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section
27-65-19(d)(i)(2). A credit will be allowed for taxes paid to another state that are levied
under the authority of that state and imposed on interstate telecommunications service.
This credit will be limited to the smaller of the Mississippi retail tax due on the service or
the tax properly paid to another state on the service.
203 Income received from all charges for international telecommunications services is taxable
at the regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann.
Section 27-65-19(d)(i)(3).
204 Income received from all charges for ancillary services is taxable at the regular retail rate
of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-65-19(d)(i)(4).
205 Income received from all charges for products delivered electronically, including, but not
limited to, software, music, games, reading materials or ring tones is subject to the
regular retail rate of sales tax pursuant to the provisions of Miss. Code Ann. Section 27-
65-19(d)(i)(5).
206 Income received from the sale, rental, installation, maintenance or repair of tangible
personal property is taxable at the regular retail rate of sales tax pursuant to Miss. Code
Ann. Sections 27-65-17 and 27-65-23. Any merchandise given away or sold at a reduced
amount as the result of signing a service contract, are not subject to use tax and are not
treated as a withdrawal from inventory. Sales tax is due on the amount received from the
customer.
207 Income received from the sale of a prepaid calling service or prepaid wireless calling
service is taxable at the regular retail rate of sales tax at the time of sale of the service.
208 The gross income received from telephone answering or paging services, whether by
person or machine, is taxable at the regular retail rate of sales tax pursuant to Miss. Code
Ann. Section 27-65-23.
209 The sale of a bundled transaction is taxable on the total cost of the bundled transaction
unless the provider can reasonably identify the non -taxable portion from its books and
records kept in the regular course of business as provided for in Miss. Code Ann. Section
27-65-19(d)(vii)(2).
210 (Reserved)
300 Sourcing Provisions
301 Sales of telecommunications sold on a call -by-call basis are sourced to Mississippi when
the call either originates or terminates in Mississippi and is charged to a service address
in Mississippi.
302 Sales of telecommunications services that are sold for a fixed or flat monthly amount and
the customer is entitled to make an unlimited number of calls are sourced to Mississippi
when billed to a customer's place of primary use in Mississippi.
303 Sales of mobile telecommunications services are sourced to Mississippi when the
customer's place of primary use is in Mississippi.
304 Sales of private communications services where all of the customer channel termination
points are located in Mississippi are intrastate services and are sourced to Mississippi.
305 Sales of private communications services with multiple customer channel termination
points in multiple states are interstate or international services and are sourced to
Mississippi on a prorated basis using the number of termination points in Mississippi to
the total number of termination points.
306 Sales of prepaid calling services or prepaid wireless calling services are sourced to
Mississippi when the customer physically purchases the service at the vendor's place of
business in this state. If the customer does not physically purchase the service at a
Mississippi business location, the sale is sourced to Mississippi if the customer's shipping
address is in this state and the sale involves shipment; or if the customer's billing address
is in Mississippi when the sale does not involve a shipment. In absence of any of the
preceding, the sale of prepaid wireless calling services may be sourced based on the
location associated with the mobile telephone number.
400 Mobile Telecommunications Provisions
401 A home service provider is responsible for obtaining and maintaining the customer's
place of primary use. The home service provider, acting in good faith, is entitled to rely
on the address supplied by each customer in determining place of primary use and may
be held harmless from any additional tax liability resulting from a different determination
of place of primary use. All customer addresses relating to service contracts are deemed
that customer's place of primary use for the remaining term of the contract or agreement.
The home service provider must obtain valid primary use addresses for extensions or
renewals of such contracts or month -to-month services provided after the expiration of a
contract.
402 If the address used by the home service provider is determined to be incorrect, the
Department will give notice to the home service provider to change the place of primary
use on a prospective basis effective with the date of the notice. However, any customer
whose place of primary use is deemed incorrect shall have an opportunity to demonstrate
that address is correct.
403 The Department has the right to collect any taxes due directly from the customer that has
failed to provide an address that meets the definition of the term "place of primary use"
which results in taxes being due.
404 (Reserved)
500 Wholesale Sales
501 Charges by one telecommunications provider to another telecommunications provider for
services that are resold, including, but not limited to, access charges, are exempt provided
that the purchaser holds a valid sales tax permit issued under Miss. Code Ann. Section
27-65-27 and the purchaser is either located in this state or is providing
telecommunications services in this state.
502 (Reserved)
600 Sales to Direct Pay Permit Holders
601 Miss. Code Ann. Section 27 -65-93 provides that taxes levied under Miss. Code Ann.
Section 27 -65-19 may be covered by the use of a direct pay permit. However,
telecommunications services are not covered with the use of a direct pay permit due to
the fact that interstate and intrastate charges must be reported separately by the
telecommunications provider.
602 (Reserved)
700 Taxable and Non-Taxable Charges and Fees
701 Charges by a service supplier for county emergency telephone (E -911) services are
county fees and are not subject to any sales or use tax, and are not considered revenue of
the service supplier for any purpose (Miss. Code Ann. Section 19-5-313).
702 Telephone services are considered taxable telecommunications services. Telephone
services that are subject to tax include, but are not limited to, Federal access charges,
connection and disconnection charges, reconnection charges, Federal universal service
fees, local telephone number portability charges, charges for establishing new services,
minimum charges and telecommunications nonrecurring charges.
703 (Reserved)
800 Purchases
801 Pursuant to Miss. Code Ann Section 27 -65-107(f) electricity or other fuel purchased by
telephone companies to operate a transmission system is exempt from sales and use tax.
Purchases by licensed retailers of appliances and other merchandise for resale in the
regular course of business are exempt from sales and use tax. All other purchases are
subject to the regular retail rate of tax. All telecommunications providers, with certain
exceptions, are required to obtain a Direct Pay Permit for purposes of reporting and
paying to the Department of Revenue the sales and use tax applicable to purchases or
rentals of tangible personal property and services in lieu of payment to the vendor.
802 (Reserved)
900 Reporting Requirements
901 Any person making taxable sales of telecommunications must complete the Distribution
of Sales Tax by Cities Schedule, part of the sales tax return filing. The 2% tax discount
does not apply to sales of telecommunications. Adequate records must be maintained to
substantiate tax classifications.
902 All taxes due from Intrastate Long Distance charges and Local Service charges must be
reported on the sales tax return separately from all taxes due from Interstate Long
Distance using the appropriate tax code categories as specified in the instructions.
903 The tax due from the sale of components of bundled transactions must be reported
separately by using the appropriate tax codes. The breakdown of actual charges should be
used if available. The telecommunications provider must allocate the price among the
services by either identifying the portion of the price attributable to each service from its
books and records kept in the regular course of business or based on a reasonable
allocation methodology approved by the Department.
904 (Reserved)
35.IV.06.02 revised effective April 1, 2018.