RE: [Emerald] Texas ISP Tax

Eric Reeves ( )
Wed, 8 Sep 1999 12:45:02 -0500 (CDT)

On Wed, 8 Sep 1999, Ronnie D. Franklin wrote:

> So.. a customer who has a $19.95 per month account is totally exempt.. no
> sweat... Emerald can handle it...

Sure, you can setup that $19.95 service to be tax exempt, but what happens
it they signup for another login at $19.95? Oops, $14.90 taxable.

> If a customer has a 128k ISDN line at $34.95 then $9.95 of that account is
> taxable.. if he has 2 128k ISDN lines.. then each account is exempt the
> first $25.00....

According to what I read: "The exemption in this section applies to the
total sales price the service provider charges for Internet access to a
purchaser, without regard to whether the service provider charges one
lump-sum amount or seperately bills the purchaser for each user."

According to this, using your example, the customer would pay tax on
$44.90 ( (34.95x2) - 25 ). Do you agree?

> Now on to the good stuff... Data Processing, Information Services, Web Host,
> and etc ARE NOT Internet Access.. so they have a different tax rule.... and
> that rule is that 20% of the TOTAL bill for these services is exempt.... and
> the percentage of discount will increase each year until something like 2003
> or so...

Or, if somebody has a service of this nature tacked on to their account as
an additional service, then you must charge tax on 80% of those services
on top of figuring in the $25 exemption on Internet access services.

This is all as I understand it, and I very well could be wrong. That's
why I'm discussing this here. So if I am all goofed in my understanding,
I can be set straight.

| Eric Reeves |
| GHG Corporation |

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