Opinion ID: 2089253
Heading Depth: 1
Heading Rank: 4

Heading: Lease of telecommunications equipment

Text: The Assessor also imposed a sales tax on rental payments received by Apex pursuant to leases of telecommunications equipment to various businesses, on the theory that rental of the equipment was a taxable service as that term is defined in 36 M.R.S.A. §§ 1752(17-A). 36 M.R.S.A. § 1811 states that [a] tax is imposed on the value of all tangible personal property and taxable services sold at retail in this State.... The phrase taxable service includes telephone or telegraph service, 36 M.R.S.A. § 1752(17-A)(C) (1990), that is defined as all telecommunications or telegraph service, including installation or use of telecommunication or telegraphic equipment, but not including telecommunications or telegraph service originating or terminating outside this State, 36 M.R.S.A. § 1752(18-A) (Supp.1995) (emphasis added). Use is defined as the exercise in this State of any right or power over tangible personal property incident to its ownership when purchased by the user at retail sale, including the derivation of income, ... by a lessor from the rental of tangible personal property located in this State.  36 M.R.S.A. § 1752(21) (emphasis added). Apex does not dispute that it leased the telecommunications equipment to various business and derived income therefrom. These transactions unmistakably involved the use of telecommunications equipment, and hence were a taxable service. American Tel. & Tel. Co. v. State Tax Assessor, 652 A.2d 107, 109 (Me.1995) (holding that when the Taxpayers [AT & T] leased their telecommunication equipment, ... they were engaging in the sale of a taxable service.). Although Apex may have intended the equipment leases as a financing device, they nevertheless fall within the scope of the relevant statutory provisions. Accordingly, the Assessor was entitled to a judgment as a matter of law. [7] The entry is: Judgment affirmed. All concurring.