A direct pay permit (DPP) for telecommunications service allows a business to purchase telecommunications service without paying tax to vendors. A business with a direct pay permit assumes responsibility for payment of all applicable taxes directly to the Department of Revenue.

A direct pay permit can be issued to a call center for telecommunications 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. 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.

A business may request permission from the Secretary of Revenue to discharge its utility sales and use tax liability for its call centers directly to the Department by completing Form E-595B, Application for Direct Pay Permit for Sales and Use Taxes on Telecommunications 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.

Taxpayers that have been authorized to discharge their utility sales and use tax liability in this manner are issued a numbered direct pay permit for telecommunications service. The permit does not apply to any tax other than the tax on telecommunications service. The permit holder should issue a copy of the permit to its vendors of telecommunications service for its call centers.

A direct pay permit that is issued to a vendor providing interstate telecommunications service and other telecommunications services for the call center relieves the vendor from collecting and remitting utility sales and use tax on the sale of all telecommunications service to the call center. A permit holder is liable for accruing and remitting tax directly to the Department on all telecommunications service purchased for a call center for which a direct pay permit has been issued to a vendor.

A business, which has been issued a permit for telecommunications service, as well as all other taxpayers, must file utility and liquor sales and use tax returns, remit the utility and liquor sales and use taxes due, and maintain records that clearly reflect the tax liability.

The following database contains the names and permit numbers of current Direct Pay Permit holders:

Firms Assigned Direct Pay Permits for Utility Sales and Use Taxes on Telecommunications Service

Last modified on: 09/29/08 11:16:59 AM.