Telecommunications Services

You owe telecommunications tax if:
You are engaged in the business activity of providing telecommunication services to consumers within the City of Mesa. The tax is due to the City whether or not you added transaction privilege tax to the charge for the services.

Tax rate on telecommunications services
The city tax rate is 1.75% of the telecommunications income. (Note: The Mesa City Tax rate increased to 1.75% effective 07/01/2006)

Collection of tax
You may choose to charge the tax separately on each sale, or include transaction privilege tax in your price. If you over charge any tax to your customers, you must remit the excess tax to the city.

If your price includes transaction privilege tax, you can compute how much of the total price is transaction privilege tax. You may deduct the total city, state, and county transaction privilege taxes from your gross receipts.

What are telecommunications services?
Telecommunications services shall include:

• Two-way voice, sound, and/or video communication over a communications channel.
• One-way voice, sound, and/or video transmission or relay over a communications channel.
• Facsimile transmissions.
• Providing relay or repeater service.
• Providing computer interface services over a communications channel.
• Time-sharing activities with a computer accomplished through the use of a communications channel.

What is telecommunications income?
Gross income from the business activity of providing telecommunication services to consumers within this City shall include:

• All fees for connection to a telecommunication system.
• Toll charges, charges for transmissions, and charges for other telecommunication services; provided that such charges relate to transmissions originating in this City and terminating in this State.
• Fees charged for access to or subscription to or membership in a telecommunication system or network.
• Charges for monitoring services relating to a security or burglar alarm system located within the city where such system transmits or receives signals or data over a communications channel.

What telecommunication activity is exempt from transaction privilege tax?

• Resale telecommunication services
  
  Gross income from sales of telecommunication services to another provider of telecommunication services for the purpose of providing the purchaser's customers with such service shall be exempt from the tax; provided, however, that such purchaser is properly licensed by the City to engage in such business.
  
  
• Interstate transmissions
  
  Charges by a provider of telecommunication services for transmissions originating in the City and terminating outside the State are exempt from the tax.
  
  
• Prepaid calling cards
  
  Telecommunications services provided with prepaid cards are exempt from the tax under the telecommunication classification. The sale of the card itself is taxable under the retail classification.

Mobile Equipment
In cases where the customer is being provided telecommunication services to receiving/transmission equipment designed to be mobile in nature (for example, mobile telephones, portable hand-held two-way radios, paging devices, etc.), the provider shall determine whether such customers are "within this city" as follows:

• by the billing address of the customer, provided that such address is a permanent residence or business location of the consumer within the State.
• in all other cases, the business location of the telecommunications provider.