Sec. 6. 36 MRSA §1752, sub-§18-B, as amended by PL 1997, c. 668, §23, is further amended to read:

18-B. Telephone or telegraph service. "Telephone or telegraph service" means all telecommunications or telegraph service, including installation of telecommunication or telegraphic equipment, but not including telecommunications or telegraph service originating or terminating outside this State. "Telecommunications and telegraph equipment" means any 2-way interactive communications device, system or process for transmitting or receiving signals and capable of exchanging audio, database or textual information. "Telecommunications and telegraph equipment" does not include computers, except those components of a computer used primarily and directly as a 2-way interactive communications device capable of exchanging audio, database or textual information. "Telephone or telegraph service" does not include directory advertising service. "Telephone or telegraph service" also does not include a prepaid calling arrangement. This subsection applies to leases entered into on or after October 1, 1996.

SUMMARY

This bill clarifies when prepaid telephone call arrangements are subject to sales and use tax. This service is subject to these taxes only when the prepaid service is purchased at a vendor located in this State or when the purchaser's shipping or billing address is in this State.