Picture Mail Service Subject to Virginia Communications Sales Tax

DALLAS, Dec. 2, 2016 /PRNewswire/ -- The Virginia Department of Taxation released a ruling determining that picture messaging services are subject to the Virginia Communications Sales Tax (CST). A cellular services provider offered a service that allowed users to take digital pictures and instantly send them to service-capable phones or e-mail addresses while on the taxpayer's network. The tax commissioner denied the taxpayer's argument that the fees at issue were for a service that is incidental to the taxpayer's provision of Internet access and, therefore, fall under the protection of the Internet Tax Freedom Act [47 USC 151 § 1105 C and E ("The Act")]. The Commissioner reasoned that the fees were not monthly charges that subscribers pay for Internet access or incidental services as described in the Act. In fact, it was necessary for customers to have Internet access prior to using the service.

The taxpayer also argued that its service was exempt from the Virginia CST on the basis that the services were a form of e-mail or instant messaging with video capability and, therefore, were "incidental to Internet access" pursuant to P.D. 06-138. However, the Commissioner ruled that the services fit the definition of picture messaging, which is explicitly listed as a service subject to the Virginia CST pursuant to P.D. 06-138. Likewise, the Commissioner rejected the taxpayer's interpretation that the voicemail, picture messaging services, and other messaging services were incidental to Internet access as these items are not included in the provisions of the statute or department guidelines.

About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a five-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com.

Logo - http://photos.prnewswire.com/prnh/20160125/325377LOGO

TECHNICAL INFORMATION CONTACTS:

Jim Kranjc
Principal
Ryan
630.515.0477
jim.kranjc@ryan.com

Dustin Davis
Principal
Ryan
972.934.0022
dustin.davis@ryan.com

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.
Jim Kranjc
ProfNet - http://www.profnetconnect.com/jimkranjc

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/picture-mail-service-subject-to-virginia-communications-sales-tax-300372300.html

SOURCE Ryan