[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR49.4253-10]

[Page 248-249]
 
                       TITLE 26--INTERNAL REVENUE
 
                               (Continued)
 
PART 49--FACILITIES AND SERVICES EXCISE TAXES--Table of Contents
 
                        Subpart C--Communications
 
Sec. 49.4253-10  Exemption for certain private communications services.

    (a) In general. The tax imposed by section 4251 on amounts paid for 
general telephone service does not apply to amounts paid for any such 
service furnished on or after January 1, 1963, to the extent that the 
amounts paid are for use of any telephone or radio telephone line or 
channel (including equipment, instruments, and other apparatus furnished 
exclusively for use in connection with the line or channel) in the 
conduct of a trade or business when such line or channel is furnished 
between specified locations in different States or between specified 
locations in different counties, municipalities, or similar political 
subdivisions of a State. The term ``trade or business'' as used in this 
section includes activities of organizations which are conducted with no 
purpose of gain or profit. A line or channel is considered to be 
furnished between specified locations only when the line or channel 
connects preselected points without the use of switching functions 
performed by a communications company exchange. Where an amount is paid 
which includes a charge for such a line or channel and also a charge for 
the service provided by means of switching functions performed by a 
communications company exchange, the exemption is applicable only to 
that portion of the amount so paid as is attributable to such a line or 
channel. The preselected points must be located in different States or 
in different counties or municipalities of the same State. If the 
preselected points are located in a

[[Page 249]]

State in which the political subdivisions are not denominated as 
counties or municipalities, then the preselected points must be in 
different political subdivisions of such State which correspond to 
counties or municipalities. For purposes of this paragraph the term 
``municipality'' means the largest political subdivision of a State 
below the level of county or similar subdivision. For the exemption to 
apply, the charge for the service must be billed in writing to the 
person paying for the service and such person must certify in writing 
that the service is for use in the conduct of a trade or business.
    (b) Exemption inapplicable. This particular exemption is not 
applicable in the case of taxes imposed on amounts paid for other 
services by section 4251, even though such services are utilized in the 
conduct of a trade or business.