Sales Tax Law Changes

At the end of last week, we were informed that there had been a recent change in the law regarding sales tax collection for internet service, taking effect as of July 1st. Under the old laws, the first $25 of internet service fees were exempt from sales tax, but the remainder of the invoices were all subject to sales tax. Under the new law change, all internet access fees are now exempt from sales tax.

Based on our conversations with the Texas Comptroller’s Office, our understanding is that this exemption removes all sales tax from regular internet service fees, and any other services which directly affect internet access, which in this case refers to fees for a fixed public IP address. Router rentals involve a physical object, and setup fees are primarily labor and are separate from internet service fees, so the taxation rules on those did not change. Similarly, web hosting and domain registration fees are covered in a separate section of the sales tax laws, and were not affected by this.

Of course, as I mentioned, we were not told about this in advance, so we had been calculating and collecting tax for these invoices normally. In order to make this transition simpler and fairly pain-free for our subscribers, our CEO decided to just credit everyone’s accounts for the sales tax levied against all applicable invoices, so none of you will need to file paperwork with the state tax office to get these taxes refunded – we are taking care of that.

These credits have already been applied to all affected accounts, and you do not need to do anything. You can log into the payment portal and view each of the credit invoices which has been generated for your account. Each credit invoice has a description line which refers to the original invoice on which the tax was charged.

If you have any questions about this, please do not call us on the telephone about this. Please email us about any questions or concerns about these tax issues at As this is essentially a billing issue, we don’t want to overwhelm our billing team with questions, some of which may not be answerable by them in the first place. Also, please remember the billing team is available Monday-Friday, 8 am to 6 pm, and use of the after-hours tech support line for non-technical support purposes, such as this, will result in a $10 fee being applied to your account

Moving forward, we have already changed the settings in the system, so all future invoices should reflect the updated tax laws.