Maine – Application of Tax to Telecommunications Services

SALT Report 3066 – Maine Revenue Services revised its telecommunications bulletin to reflect recent changes in the sales and use tax laws.  The bulletin provides that telecommunication services are now subject to the Maine Service Provider Tax.  This provision applies to ancillary services, such as engineering or design, as well as to the installation, maintenance or repair of telecommunications equipment.

In addition, the list of itemized charges that are subject to the service provider tax has been expanded to include any other charges by the provider that are designed to recoup the provider’s expenses.  The charge must be a part of the sales price of the telecommunications services, and cannot be identified as a non-taxable service or charge.

Under the installation, maintenance, and repair category, the taxable versus nontaxable services section has been updated to reflect that only the installation, maintenance or repair of telecommunications equipment, telephones, telephone systems, fax machines, modems, two-way radios and intercom systems are subject to the Service Provider Tax.

The tax also applies to wire maintenance plan charges that cover the line between the carrier’s line and the jack in the customer’s home or place of business. It also includes charges by a contractor hired by a telecommunications carrier to perform installation, maintenance or repair work to the carrier’s own lines or telecommunications equipment.

The bulletin also discusses bundled plans and transactions, VOIP services, exemptions from the tax, prepaid calling services, services that are part of a sale, maintenance agreements, mobile equipment, and sales for resale.

For Further Information

Maine Revenue Services – Sales and Use Tax Instructional Bulletin No. 56