Direct Pay Permit for Sales and Use Taxes on Telecommunications Service and Ancillary Service
General Information
A direct pay permit for telecommunications service and ancillary service allows its holder to purchase telecommunications service and ancillary service without paying sales and use tax to a vendor and authorizes the vendor not to collect any tax on a sale to a permit holder. A direct pay permit issued for telecommunications service and ancillary service does not apply to any tax other than the tax on telecommunications service and ancillary service.
The holder of a direct pay permit for sales and use taxes for telecommunications service and ancillary service must file combined general rate sales and use tax returns (Form E-500E), remit the combined general rate sales and use taxes due, and maintain records that clearly reflect the tax liability.
Who Qualifies?
A direct pay permit can be issued to a call center for telecommunications service and ancillary service. A call center that purchases interstate telecommunications service that originates outside this State and terminates in this State may apply for a direct pay permit for telecommunications service and ancillary service.
A call center is a business that is primarily engaged in providing support service to customers by telephone to support products or services of the business. A business is primarily engaged in providing support services by telephone if at least 60% of its calls are incoming.
Application Process
A business may request permission from the Secretary of Revenue to discharge its sales and use tax liability on telecommunications service and ancillary service for its call centers directly to the Department by completing Form E-595B, Application for Direct Pay Permit, Sales and Use Taxes for Telecommunications Service and Ancillary Service. This authorization by the Secretary is conditioned upon full compliance with the provisions of the Sales and Use Tax Law and timely payment of all taxes due.