1.  What jurisdictions are “grandfathered”, i.e. what jurisdictions can continue to tax Internet  

Access?

New Mexico, North Dakota, Ohio, South Dakota, Texas, Wisconsin and certain home rule cities in Colorado will now be

exempt.

Colorado 'Home Rule' Cities: Aspen, Commerce City, Durango, Fort Collins, Lafayette Lakewood, Thornton and

Wheatridge.

2.  What changed with the 2004 extension?

The 2004 extension expanded the definition of what constituted “Internet access”. Telecommunication services were

previously excluded from the definition. After the 2004 extension, telecommunications services that are “… purchased,

used or sold by a provider of Internet access to provide Internet access” are included within the definition, and therefore

are exempt in jurisdictions that are not grandfathered.

The effective date of the exemption was delayed until November 2, 2005 to allow jurisdictions time to revamp their taxing

structure to make up for the lost revenue.

That is the name of the Act that contained the 2004 amendments to the Internet Tax Freedom Act that changed the

definition of Internet access to include related telecommunications services.

A 6. Sales and use taxes are specifically included in the exemption and therefore, will not be applied to Internet related

telecommunications services. Specifically excluded are franchise fees and Universal Service Fund fees such that these

fees will continue to be applicable. The statutory definition of “tax” is: “Any charge imposed by any governmental entity for

the purpose of generating revenues for governmental purposes, and isnot a fee imposed for a specific privilege, service,

or benefit conferred.”

6. I have heard that some states do not feel that they are subject to the preemption after the 2004

Because of the complexity of the drafting, some states have questioned the effective date. Qwest is taking the position

that unless a state issues a formal ruling holding otherwise, the effective date is November 2, 2005. However, if a ruling is

issued by any jurisdiction stating that it believes another date is the effective date, the Company will follow the ruling and

continue to collect the taxes if told to do so. In these situations, individual customers may file for refunds directly with the

jurisdiction if they wish to contest the jurisdiction’s position.

7.  Is there anything that non-residential customers must do to have the taxes turned

Qwest is requiring its eligible Internet Service Provider customers to provide proof that they qualify for the exemption. This

exemption certificate is available on this web site. It must be completed and returned as soon as possible. (This

requirement does not apply to retail DSL customers. Tax has been turned off for this product other than for grandfathered

states.)

8. What happens if I do not return the certificate?

Qwest retains the right to bill for taxes if the customer does not confirm that the purchased services qualify for the

exemption.

For the purchase of these telecommunications services to be exempt, the customer must be an ISP and it must be using

the telecommunications service for the provision of Internet access. These are facts that are within the control of the

purchaser and Qwest will be relying upon the representations. If these facts are subsequently determined to be incorrect,

Qwest can be assessed for the back taxes that the customer should have paid. The Company desires to have the ability to

seek reimbursement from the customer that made the representations.

10. If I am purchasing services in the same account that qualify for the exemption and other

No. Only accounts that have only exempt services can have the taxes turned off. If you have an account that has both

non-taxable and taxable services in the same account, you will need to work with your customer representative to

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