006.05.06 Ark. Code R. 005-GR-7.2

Current through Register Vol. 49, No. 9, September, 2024

Rule 006.05.06-005-GR-7.2 - PREPAID CALLING SERVICE AND PREPAID WIRELESS CALLING SERVICE

A. Sales of a prepaid calling service, a prepaid wireless calling service, or the recharge of a prepaid calling service or a prepaid wireless calling service are subject to gross receipts tax.

B. DEFINITIONS.

1. "Prepaid calling service" means the right to access exclusively a telecommunications service, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount.

2. "Prepaid telephone calling card" or "prepaid authorization number" mean the exclusive purchase of telephone or telecommunications services, paid for in advance, which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed.

3. "Prepaid wireless calling service" means a telecommunications service that provides the right to utilize a mobile wireless service as well as other nontelecommunications services, including the download of a digital product delivered electronically, content, and ancillary services, which must be paid for in advance and that is sold in predetermined units of dollars of which the number declines with use in a known amount.

4. "Recharge" means the purchase of additional telephone or telecommunications services for a previously purchased prepaid calling service or prepaid wireless calling service.

C. SOURCING.

1. If the sale or recharge of a prepaid calling service or a prepaid wireless calling service takes place at the retail vendor's place of business, then the sale is sourced to that business location and the applicable local sales tax rate is that of the business location.

2. If the sale or recharge of a prepaid calling service or a prepaid wireless calling service does not take place at the retail vendor's place of business, then the sale is sourced to the first of the following addresses that is known to the seller in accordance with Ark. Code Ann. § 26-52-521(b):

a. The location indicated by instructions for delivery to the purchaser (or donee);

b. The address of the purchaser;

c. The billing address of the purchaser; or

d. The address from which the tangible personal property was shipped or from which the service was provided, disregarding for these purposes any location that merely provided the digital transfer of the product sold. In the case of a sale of prepaid wireless calling service, the location associated with the mobile telephone number may be used.

3. A prepaid calling service or a prepaid wireless calling service sold through a vending device is taxed as any other good sold through a vending device.

006.05.06 Ark. Code R. 005-GR-7.2

Ark. Code Ann. §§ 26-52-314; 26-52-315(d)(3)