Section 40-21-82 Levy of tax; sourcing of gross sales or gross receipts from telegraph or telephone services.
Section 40-21-82
Levy of tax; sourcing of gross sales or gross receipts from telegraph or telephone services.
(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, a privilege or license tax against every utility furnishing electricity, domestic water, or natural gas in the State of Alabama. The amount of the tax shall be determined by the application of rates against gross sales or gross receipts, as the case may be, from the furnishing of such services in the State of Alabama. The tax shall be computed monthly with respect to each person to whom such services are furnished, in accordance with the following table:
| If monthly gross sales or gross receipts respecting a person are: | The tax is: |
|---|---|
| Not over $40,000 | 4% of such gross sales or gross receipts |
| Over $40,000 but not over $60,000 | $1,600 plus 3% of excess over $40,000 |
| Over $60,000 | $2,200 plus 2% of excess over $60,000 |
(b) There is hereby levied a privilege or license tax against every utility furnishing telegraph or telephone services in the State of Alabama. The amount of the tax shall be determined by the application of rates against gross sales or gross receipts, as the case may be, from the furnishing of such services in the State of Alabama. The tax shall be applied to interstate telephone service beginning with bills dated on and after February 1, 2002, regardless of when the services being billed were provided. The tax shall be computed monthly with respect to each person to whom such services are furnished, in accordance with the following table:
| If monthly gross sales or gross receipts respecting a person are: | The tax is: |
|---|---|
| Not over $60,000 | 6.7% of such gross sales or gross receipts |
| Over $60,000 | $4,020 plus 3.7% of excess over $60,000 |
Beginning with bills dated on or after April 1, 2002, the tax shall be computed at the rate of six percent on all gross sales or gross receipts. The utility furnishing such telegraph or telephone services shall be entitled to deduct and retain from the gross amount of tax billed by the utility nine-tenths of one percent of the amount of such tax billed on or after February 1, 2002, in consideration of the costs incurred by the utility in collecting and remitting the tax levied by this subsection; provided, however, that on and following October 1, 2002, the amount deducted and retained by such utility shall be one-fourth of one percent of the gross amount of such tax billed.
(c) If charges for a nontaxable service are aggregated with and not separately stated from charges for telephone or telegraph service that are subject to taxation, then the charges for the nontaxable service are subject to taxation unless the utility can reasonably identify the charges not subject to taxation from its books and records that are kept in the regular course of business.
(d) The provisions of subsection (c) do not create any customer right to require that, for purposes of determining the amount of tax applicable to a transaction, either the utility or the department allocate or attribute the bundled charge to the different portions of the transaction in order to minimize the amount of tax charged to the customer.
(e) Gross sales or gross receipts from the furnishing of telegraph or telephone services shall be sourced as follows:
(1) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the sale of telephone service sold on a call-by-call basis shall be sourced to a. each level of taxing jurisdiction where the call originates and terminates in that jurisdiction or b. each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
(2) Except for the defined telegraph or telephone services in subdivisions (3) and (4), the sale of telephone service sold on a basis other than a call-by-call basis is sourced to the customer's place of primary use.
(3) The sale of post-paid calling service is sourced to the origination point of the telecommunications signal as first identified by either a. the seller's telecommunication system, or b. information received by the seller from its service provider, where the system used to transport such signal is not that of the seller.
(4) A sale of private communication service is sourced as follows:
a. Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which such customer channel termination point is located.
b. Service where all customer channel termination points are located entirely within one jurisdiction is sourced to the jurisdiction in which the customer channel termination points are located.
c. Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located.
d. Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in such jurisdiction by the total number of customer channel termination points.
(Acts 1969, Ex. Sess., No. 21, p. 46, §4; Acts 1971, 1st Ex. Sess., No. 98, p. 172; Acts 1992, No. 92-623, p. 1466, §3; Acts 1993, No. 93-614, p. 1006, §2(4); Act 2001-1090, 4th Sp. Sess., p. 1120, §1; Act 2004-397, p. 668, §1; Act 2006-292, p. 584, §1.)