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The Internet Tax Nondiscrimination Act (ITNA), effective November 1, 2003, extended the moratorium on the taxation of Internet access. The legislation also clarified the definition of Internet access to include telecommunications services that are purchased, used, or sold by a provider of Internet access to provide Internet access. However, the new legislation also allowed states that imposed and actually enforced a tax on telecommunications services "purchased, used or sold by a provider of Internet access to provide Internet access" as of November 1, 2003 to be grandfathered from the moratorium and to continue taxing such services through October 31, 2005. Therefore, from November 1, 2005 to November 1, 2007, such telecommunications services used solely to provide Internet access are exempt from state and local sales taxes in applicable jurisdictions if such services are used solely to provide Internet access.
This rule applies to all states in the Sprint local service area except Ohio, Pennsylvania, and Texas; which remain grandfathered under the federal moratorium. For providers of Internet access in Ohio and Texas, which remain eligible to tax such services under federal law, a sale for resale exemption certificate will be required to exempt the ISP customer from state and local taxes. Resale exemption certificates will not be accepted from ISP's in Pennsylvania, as sales of telecommunications services to ISP's in that state remain taxable due to Pennsylvania's grandfather status under the federal moratorium.
The taxation of the Sprint DSL for ISPs service has been updated in the billing system to reflect the correct tax treatment for this service effective November 1, 2005. In order to receive tax exemption for other services that fall within the scope of the moratorium, providers must submit an Internet Service Provider's Affidavit of Use. If your company is a provider of Internet access who purchases telecommunications services from Sprint that are in turn solely used to provide Internet access to your customers and your purchase meets the requirements for exemption from tax under of the federal Internet Tax Nondiscrimination Act, then you may submit an Internet Service Provider's Affidavit of Use in order to purchase these services free of sales tax. Please note that your company must accurately complete and submit this document to Sprint in order for tax to be removed from charges for these services.
In order to accommodate the tax exempt purchases of services under the ITNA, a separate customer account will be created for you. Only services that are exempt under the ITNA will be billed via this account. You will receive a separate bill for this account, which may carry a different billing number.
If you have any questions or concerns, please do not hesitate to contact your Sprint Account Manager.