| (2) Tangible personal property. A cable service provider
owes tax on its purchases of equipment, supplies, and other items
that are not transferred to the care, custody, and control of purchasers
as an integral part of the cable television or bundled cable service,
but are instead used by the cable service provider to provide that
service. For example, a cable service provider owes tax on the satellite
receiving and transmitting equipment, cables, and wiring that it uses
to provide cable television service and that are not located on the
purchaser's premises. Taxable items that a cable service provider
purchases out of state and brings into Texas for use in providing
a cable television or bundled cable service are subject to Texas use
tax. See §3.346 of this title (relating to Use Tax). Credit will
be allowed against the use tax for any sales or use tax legally imposed
and paid to another state. See §3.338 of this title (relating
to Multistate Tax Credits and Allowance of Credit for Tax Paid to
Suppliers).
(3) A cable television service provider may seek an
annual refund of Texas sales and use taxes paid on certain tangible
personal property directly used or consumed in providing cable television
services. See §3.345 of this title (relating to Annual Refund
Program for Providers of Cable Television, Internet Access, and Telecommunications
Services).
(f) Real property rental. An owner of real property,
such as an apartment complex or hotel, that provides cable television
or bundled cable service to its residents or guests must collect sales
tax on any charge it imposes on residents or guests that is attributable
to the cable television or bundled cable service. If the owner does
not charge the residents or guests for the cable television or bundled
cable service, the owner is the consumer of the service and must pay
tax on that service and all services or expenses connected to the
provision of that service, in accordance with subsection (b) of this
section.
(g) Local tax.
(1) Cable service providers are required to collect
all local tax due on the sale of cable television or bundled cable
service, and on all services or expenses connected with the provision
of that service, in accordance with subsection (b) of this section,
based upon the point of delivery to the purchaser. For more information
regarding the calculation of local tax, see Tax Code, Title 3, Subtitle
C.
(2) Direct-to-home satellite. The sale of cable television
or bundled cable service by means of direct-to-home satellite is exempt
from local tax under the Telecommunications Act of 1996, §602.
For purposes of this section, direct-to-home satellite refers to cable
television or bundled cable service that is transmitted directly to
a purchaser's premises, including a residence, hotel, or motel, without
use of ground receiving or distribution equipment, except at the purchaser's
premises or in the uplink process to the satellite. Tangible personal
property transferred to the care, custody, and control of the purchaser
as an integral part of the cable television or bundled cable service
is considered to be part of the service and is also exempt from local
tax. Equipment used by a cable service provider to provide direct-to-home
satellite cable television or bundled cable service is subject to
local sales and use taxes, unless otherwise exempt.
(3) Point of delivery.
(A) Service delivered through a fixed physical connection.
(i) If a cable service provider delivers, or under
its contract with the purchaser is able to deliver, cable television
or bundled cable service, or any portion or element thereof, to the
purchaser by means of a fixed physical connection, then the address
of that fixed physical connection is the point of delivery, even if
the purchaser can access the service both through a fixed physical
connection and by means of nomadic access.
(ii) Two or more fixed physical connections. If fixed
physical connections at two or more locations are associated with
a single account, then the service provider must collect local taxes
for each separately stated charge for cable television or bundled
cable service based upon the location of the fixed physical connection
to which the charge is allocable. For example, if a purchaser's account
is associated with coaxial cable connections in City A and in City
B, and the purchaser incurs a separately stated charge for a pay-per-view
movie that is provided through the coaxial cable connection in City
B, then the service provider should collect local taxes on the pay-per-view
charge using the City B location as the point of delivery. If the
service provider cannot determine the location of the fixed physical
connection to which a charge is allocable, then the point of delivery
is the location of the fixed physical connection designated by the
purchaser prior to or at the time of purchase. Information about a
purchaser's designated point of delivery must be maintained in the
seller's books and records. For example, if a purchaser's account
is associated with fixed physical connections at two or more locations,
and the purchaser incurs a separately stated charge for video programming
that is provided by means of nomadic access, then the point of delivery
is the location of the fixed physical connection designated by the
purchaser prior to or at the time of purchase.
(B) Service delivered by mobile telecommunications
service provider. If the purchaser's account does not have a fixed
physical connection, and if the cable service provider is also a mobile
telecommunications service provider, then the point of delivery to
the purchaser is the purchaser's place of primary use of the mobile
telecommunications service, as that term is defined in §3.344
of this title.
(C) Service delivered without a fixed physical connection.
If the purchaser does not have a fixed physical connection, and the
cable service provider is not a mobile telecommunications service
provider, then the point of delivery shall be:
(i) the purchaser's mailing address in this state.
For example, if there is no fixed physical connection, but the cable
service provider sends invoices to the purchaser at a mailing address
in this state, or has on file in its books and records for the purchaser
a mailing address in this state, then the purchaser's Texas mailing
address is the point of delivery. A cable service provider acting
in good faith may rely upon a statement from a purchaser regarding
the purchaser's mailing address as provided in paragraph (4) of this
subsection, in which case the provider will not be held liable for
any additional tax, penalty, or interest if the comptroller subsequently
determines that the statement is invalid; or
(ii) the address in this state that is associated with
the payment instrument used by the purchaser to pay for the service,
but only if the cable service provider cannot determine, or the purchaser
has not provided, a mailing address in this state under clause (i)
of this subparagraph.
(4) Purchaser's rights and remedies.
(A) Mailing address. If the point of delivery to the
purchaser is not a fixed physical connection under paragraph (3)(A)
of this subsection or the place of primary use under paragraph (3)(B)
of this subsection, then the purchaser may contact the cable service
provider to provide an accurate mailing address or to update the mailing
address already in the provider's books and records. The cable service
provider must then collect local tax on the sale of cable television
and bundled cable service to the purchaser based upon the point of
delivery determined in accordance with paragraph (3)(C)(i) of this
subsection using the information provided by the purchaser.
(B) Refund. If a cable service provider collects local
sales tax from a purchaser in error, then the purchaser may request
a refund of that local sales tax from the comptroller in accordance
with the procedures set forth in §3.325 of this title (relating
to Refunds and Payments Under Protest).
(5) Nomadic access. If a purchaser has an account with
nomadic access, the point of delivery is determined in accordance
with paragraph (3) of this subsection.
(6) Tangible personal property. Tangible personal property
that is transferred to the care, custody, and control of the purchaser
as an integral part of a cable television or bundled cable service
is regarded as a component of that service and is subject to local
tax based upon the point of delivery to the purchaser in accordance
with paragraph (3) of this subsection. A cable service provider is
responsible for collecting local tax in accordance with Tax Code,
Title 3, Subtitle C on any other sale, lease, or rental of tangible
personal property. When a cable service provider charges a single
price for the provision of both cable television or bundled cable
service and tangible personal property that is not an integral part
of that service, such as the rental of compact discs containing video
programming, then the cable service provider must identify in its
contracts, invoices, or books and records that portion of each charge
that is attributable to the provision of tangible personal property
and must collect local sales tax upon that amount in accordance with
the provisions of the Tax Code governing the application of local
tax to the Cont'd... |
