Diversified Telecom Servs. v. State

Summary

The Nebraska Supreme Court affirmed a district court judgment upholding a sales tax deficiency assessment against Diversified Telecom Services, Inc. The court held that an Option 2 contractor could be taxed on building-material purchases and on gross receipts from installing or connecting mobile telecommunications services, without impermissible double taxation. The court also upheld taxation of generators, fuel, electrical equipment, and concrete pads, rejected Diversified’s challenge to the calculation of its tax liability, and found no equal protection violation.

Holdings

1. An Option 2 contractor is not entitled to a credit or deduction for sales or use tax paid on building materials when the contractor also earns taxable gross receipts from furnishing, installing, or connecting mobile telecommunications services on the utility's side of the demarcation point.
2. The taxation of Diversified's purchase of building materials and its gross receipts from mobile telecommunications work did not constitute double taxation.
3. Generators, fuel, electrical equipment, gaslines, and concrete pads used for equipment mounting were property used in conjunction with furnishing, installing, or connecting mobile telecommunications services and were properly included in the taxable gross receipts.
4. Diversified failed to establish that the Department incorrectly calculated its tax liability.
5. Diversified failed to prove that the classification between Option 1 and Option 2 contractors violated equal protection, and the Department's application of the tax statutes did not require Diversified to change its election.

Questions Presented

1. Whether an Option 2 contractor that pays sales or use tax on building materials must also remit sales tax on gross receipts from installing or constructing property used in conjunction with mobile telecommunications services.
2. Whether the taxation of Diversified's material purchases and gross receipts constituted impermissible or unconstitutional double taxation.
3. Whether generators, fuel, electrical equipment, gaslines, and concrete pads were property used in conjunction with the furnishing, installing, or connecting of mobile telecommunications services.
4. Whether Diversified demonstrated that the Department incorrectly calculated its tax deficiency.
5. Whether the taxation of Option 2 contractors, and the Department's treatment of Diversified's election, violated equal protection.

Disposition

affirmed