A company’s sale of wireless services for resale were sourced to Texas when apportioning sales for franchise tax purposes.
Wireless Services are Services
A company sold wireless voice and data services to another company for resale in Texas. The comptroller found that these services were Internet access services and wireless telecommunication services. In apportioning the company’s margin (tax base), the sale must be sourced to Texas since the services are provided in Texas.
Wireless Services Are Not an Intangible Asset
The company argued that the sale of wireless voice and data services was a sale of an intangible asset. In Texas, the sale of an intangible asset is sourced to the purchaser’s location. However, like the sale of prepaid calling cards, the sale of wireless voice and data services is a sale of services.
Letter No. 201711016L, Texas Comptroller of Public Accounts, November 27, 2017, ¶404-317
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