Georgia – GA Georgia Sales and Use Tax: Wireless Service Providers’ Refund Denied Because Customers Were Not Reimbursed

Yahoo Finance News

DALLAS, Feb. 24, 2017 /PRNewswire/

The Georgia Court of Appeals upheld a trial court’s decision that a group of wireless communications service providers were barred from seeking refunds prior to refunding the taxes to their customers (New Cingular Wireless, PCS, LLC v. Georgia Department of Revenue, Georgia Court of Appeals, No. A16A2003, February 21, 2017). The wireless service providers requested refunds pursuant to O.C.G.A. section 48-2-35. Specifically, the providers argued that the Internet access services they provided along with other communications services were excluded from the definition of a “telecommunications service” according to O.C.G.A. section 48-8-2. Accordingly, the providers erred when they collected sales tax on these exempt services.

The wireless communication service providers admitted that they did not refund the sales tax to their customers, but did not see it as a prerequisite in seeking the refunds. In its arguments, the Department cited Regulation 560-12-1-.25 that states the following:

In the case of taxes illegally or erroneously collected, the dealer may secure a refund as provided in O.CG.A. section 48-2-35, provided however, the dealer must affirmatively show that the tax so illegally or erroneously collected was paid by him and not paid by the consumer, or that such tax collected from the consumer as tax and has since been refunded to the consumer.

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