New York Court Denies Time Warner Appeal on Taxation of Federal Service Fees in Bundled Telecommunication Services

• New York State Department of Tax Appeals denied Time Warner subsidiary’s appeal related to sales tax on Federal fees
• Telecommunications providers can pass on expenses to customers for Federal Universal Service Fund
• Company was assessed over six million dollars in additional sales and use tax
• New York Division of Taxation examined company’s invoices and determined portion of charges to be taxable
• Sales tax in New York applies to telecommunication services excluding interstate and international service
• Court agreed that FUSF fees were partially taxable as part of total receipts of the bundle
• Company’s arguments based on technical services bulletin and prior case were denied
• Understanding which charges are associated with which services in bundled services is important
• Each state may have different standards for determining taxable portion of bundled services

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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