Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 55-99

1955-1 C.B. 531

Full Text

Rev. Rul. 55-99

Under the provisions of section 3465(a)(3) of the Internal Revenue Code of 1939 no tax is imposed with respect to charges of 24 cents or less paid by the insertion of coins in coin-operated telephones available to the public, except that where such coin-operated telephone service is furnished for a guaranteed amount the tax applies to the amount paid under the guarantee plus any fixed monthly or periodic charge. Held , that the tax applies to the full amount of such guarantee whether it is paid out of receipts from the coin box of the telephone or from funds of the subscriber (guarantor). For example, if a subscriber guarantees a minimum deposit of 20 cents per day, and if at the end of a 60-day period it is determined that only $9.75 has been deposited in the coin box, the tax is based upon any periodic service charge plus the guaranteed amount of $12, even though only $2.25 of the guaranteed amount is paid from the subscriber's own funds