Texas – Wireless 911 Emergency Services are Taxable

SALT Report 1819 – The Texas Comptroller ruled that a company’s 911 emergency system services were subject to Texas sales tax. The service is called “iBase” and is used by telecommunications companies to ensure the accuracy of their 911 database.

The iBase services include editing data to a customer’s required format, managing and storing of data, and uploading and distributing data to users.  The Comptroller concluded that these services represented data compilation, manipulation, and storage, which are taxable services in Texas. The Taxpayer argued that its wireless 911 services should qualify for either the proprietary information services exemption or the resale exemption.

The Comptroller rejected the proprietary information services exemption because the Taxpayer could not prove that a specific client was given proprietary ownership of the information. Therefore, the Taxpayer’s services were taxable as data processing because they included computer-based editing and correcting of names, addresses, and telephone numbers.

Further, the Comptroller determined that the Taxpayer did not qualify for a resale exemption because its customers, the telecommunications service providers, did not resell the services they purchased from the Taxpayer. The Comptroller noted that the telephone subscribers did not obtain, or wish to obtain, the data that the Taxpayer processed and managed.

For Further Information:

Texas Comptroller of Public Accounts – Decision, Hearing No. 104,317


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