J2 Global Communications, Inc. v. City of Los Angeles

Plaintiff j2 Global Communications, Inc. (j2), appeals from a summary judgment in favor of defendant City of Los Angeles (City) on j2’s claim for a refund of taxes it paid for telecommunication services it used in connection with services it provided to its customers over the Internet. j2 contends it is exempt from taxation on those telecommunication services under the Internet Tax Freedom Act, as amended in 2007 (ITFA) ( 47 U.S.C.A. § 151 note; PubJL. No. 105-277, § 1100 et seq. (Oct. 21, 1998) 112 Stat. 2681 -719). The trial court concluded that the City produced evidence to show that j2’s purchase of telecommunication services did not fall within the ITFA exemption, and j2 failed to adequately rebut that showing. We agree, and affirm the summary judgment.

BACKGROUND

j2 is a company that provides “online fax, virtual phone systems, hosted email, email marketing, online backup and bundled suites of these services” to businesses and individuals worldwide. One of its core services is eFax, which “enable[s] users to receive faxes into their email inboxes and to send faxes via the Internet” from their computers. To provide this service, j2 purchases telephone numbers known…