Division One of the Arizona Court of Appeals,...
Division One of the Arizona Court of Appeals, based in Phoenix, ruled this week that the VoIP service of Cable One is “telecommunications exchange or inter-exchange access” and thus subject to state taxation. It said Cable One connects customers to…
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the public switched telephone network and dismissed arguments to the contrary. Cable One has argued it’s not providing such access and refers to its service as Internet Protocol-enabled. The court said it looked at these terms in practical ways, as it said the Arizona Legislature had intended in past laws: “As long as the facility serves or facilitates the transmission of communications, it is a communications transmission facility.” Cable One had pointed to the FCC’s rulings on VoIP, but the court disagreed on their relevance: “We reject this argument. These authorities concern regulation, not taxation … neither Congress nor the FCC has taken any action to preempt state taxation of VoIP providers.” It remanded the issue to the state’s tax court for more proceedings “consistent with this opinion.”