AT&T Companies Are Denied Alabama Tax Break on Fiber Optic Cable

BellSouth Telecommunications LLC and other AT&T affiliates were denied sales and use tax refunds by the Alabama Tax Tribunal on Tuesday because their purchases of fiber optic cable didn’t qualify for the “machine rate.”

The machine rate is a reduced sales tax rate imposed on equipment used to process tangible personal property, but the fiber optic cable the companies bought were only used to transmit information between machines, Associate Judge Leslie Pitman ruled.

• The fiber optic cable also doesn’t pass the “integral function” test, because it’s not integral to the manufacturing process of AT&T telecommunications equipment, although it’s necessary to ...