mobile telecommunications;
taxation procedures
DPA |
Committee on Energy Utilities and Technology |
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DPA |
Committee on Ways and Means |
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X |
Caucus and COW |
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As Passed the House |
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HB 2542 conforms state laws to accommodate the Mobile Telecommunications Sourcing Act signed into federal law on July 28, 2000.
The Mobil Telecommunications Sourcing Act was signed into law on July 28, 2000. The Act changes the way state and local sales taxes and use taxes are imposed on wireless telecommunication companies. Currently, wireless taxes are imposed utilizing what is known as the Goldberg method that arose out of the Supreme Court decision known as Goldberg V. Sweet. The court ruled that for a state to have taxing authority over interstate telecommunications two things must occur. First, the call must originate or end in the state and second the service address must be located in that same state. This has caused problems for taxing jurisdictions due to the transitory nature of cellular phones.
The Mobil Telecommunications Sourcing Act changes the way that wireless use and sales taxes are imposed by creating a uniform method of sourcing telecom services to the appropriate taxing jurisdictions. This new method assumes for the purpose of the taxing jurisdictions all wireless calls are sourced to the subscriber’s primary residential or business address, also known as place of primary use (PPU). Additionally, the act allows states to create a database that can appropriately place every address in the state in the correct taxing jurisdiction. The database must be approved by the Multi-state Tax Commission and the Federation of Tax Administrators. If a state chooses not to provide a database, then providers must create a database of their own which uses zip codes to assigned addresses in the state to assign the appropriate taxing jurisdiction. The Mobile Telecommunications Souring Act while currently law, contains a delayed effective date for the purpose of consumer billing of August 2002. This is intended to allow states, cities and towns time to implement the new law.
· Defines Mobil Telecommunications Services as follows:
“Commercial mobile radio service as defined by code 47 of the Federal Regulations Section 20.3”
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Strikes the
requirement that the Department of Revenue, cities or towns that collect or
levy taxes for wireless telecommunication services provide a database for the
purpose of assigning addresses in the state to the proper taxing jurisdiction.
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Provides a remedy
for customers who believe they were overcharged for taxes relating to wireless
service by a home service provider.
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Establishes how
home service providers must respond to such disputes.
·
Defines:
·
Customer
·
Home Service
Provider
·
Mobil
Telecommunications Services
·
Strikes the
requirement that the Department of Revenue, cities or towns that collect or
levy taxes for wireless telecommunication services provide a database for the
purpose of assigning addresses in the state to the proper taxing jurisdiction.
·
Provides a remedy
for customers who believe they were overcharged for taxes relating to wireless
service by a home service provider.
·
Establishes how
home service providers must respond to such disputes.
·
Defines:
·
Customer
·
Home Service
Provider
·
Mobil
Telecommunications Services