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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
S
515.0000 Service Enterprises Generally—Regulation 1501
Annotation 515.0005.470
(a) In General—Service Distinguished from Sale
515.0005.470 Data Receiving Service. A taxpayer provides each of its subscribers with data receiving equipment and also provides information to the subscribers by satellite transmissions which are received by the equipment. The receiver is not a computer and has no keyboard or data storage capabilities. The taxpayer retains ownership of the receiving equipment and the equipment is returned to the taxpayer upon cancellation of the subscription.
The taxpayer's basic package requires the subscriber to pay a one time start up fee and a monthly subscription fee. The subscriber can also obtain additional services (similar to the obtaining of a premium channel) on cable television. The billing method indicates that the equipment is being leased to the subscribers. The amount of the start up fee and the amount of the monthly fees depend upon the type of equipment furnished to the subscriber.
The subscribers receive two components: the data receiving equipment and the electronic satellite transmissions. The furnishing of the satellite transmissions does not involve the transfer of tangible personal property and the service of providing the transmissions are not regarded as services related to the sale of tangible personal property. The charge attributable to these services is not subject to tax. The billing method indicates that the equipment is being leased. The application of the tax to charges attributed to the lease is the same as the application of tax to leases generally. 10/16/91.