David_W_Tamkin@cup.portal.com (09/28/88)
In Telecom Digest, v8, #147, David Gast asks (colons) and answers (asterisks): : L.A. has a 10% tax on phone service. GTE bills this tax on all calls I : make including LD calls to other states and countries. : Any calls which are billed directly by a long distance carrier do : not include this tax. : Does anyone know if this is correct treatment? I have tried to find : out from GTE, but they claim they do not know anything about the : tax. I find it incredible, but when I remember it is GTE, not so much. Here in Illiois the regular 5% state sales tax is charged by all carriers on calls billed to addresses in Illinois. I could never figure out the home rule tax rates, so for all I know, inter-LATA calls billed by local telcos get hit for home rule taxes too. The additions to sales tax for most tangibles (local and possibly transit) are not applied, only the raw state tax. This has been the law in Illinois for several years now. Long-distance carriers charge and collect the state sales tax on bills that they issue, something that Gast noticed NOT to happen with the Los Angeles city tax. Gast continues, later in v8 #147: [On his second call to GTE, they admitted the error and hinted that he'd get a refund.] * Anyone have any idea what GTE does with these funds? Do they actually * turn them over to the city or do they just pocket the tax they have * collected incorrectly? In Illinois, all local and long-distance telephone service providers are required to file sales tax returns and remit the greater of the correct tax on their taxable sales or the amount of tax collected from customers. But as I said, I don't know whether inter-LATA calls billed by local telcos fall prey to careless software and get charged home rule taxes in error. David_W_Tamkin@cup.portal.com