Sales/Use/Indirect:
Pennsylvania: Non-Voice Private Line Services that Transport Data are Deemed Taxable Phone Messages

Case Nos. 121 and 122 F.R. 2018, Pa. Commw. Ct. (1/29/25). In a case involving a telecommunications company that sought a Pennsylvania refund for gross receipts taxes it paid on receipts from sales of certain private line non-voice services – which provided customers a dedicated and uninterrupted communications channel to securely and continuously transport voice, video and/or data as packets between specified fixed points – the Pennsylvania Commonwealth Court (Court) affirmed that because such services “fulfill the purpose of making the process of transmitting messages more satisfactory,” the fees for such services were properly taxable under 72 P.S. § 8101(a)(2). In doing so, the Court explained that no explicit statutory exception exists with respect to the company’s non-voice personal line services. The Court also noted that the applicable statute does not mention the term “voice” at all and provides no indication that a service is no longer taxable once it reaches a large bandwidth size or some other threshold. Furthermore, the Court reasoned that “the fact that the legislature elected to include a comprehensive list of exceptions for the tax, but did not include non-voice services in that list of exemptions, demonstrates that it knew how to carve out exceptions but simply chose not to do so with respect to such services.” Please contact us with any questions.