Sec. 12-407a. Basis for determining whether a telecommunications service is subject to tax under this chapter.
Sec. 12-407a. Basis for determining whether a telecommunications service is
subject to tax under this chapter. (a) Except as otherwise provided in subsections (b)
and (c) of this section, the rendering of telecommunications service shall be subject to
tax under this chapter as a sale, for purposes of subparagraph (K) of subdivision (2) of
subsection (a) of section 12-407, when such service is (1) (A) originated in this state
and terminated in this state, (B) originated in this state and terminated outside this state
and with respect to which such service is charged to a telephone number, customer or
account located in this state or to the account of any transmission instrument in this
state, or (C) originated outside this state and terminated in this state and with respect to
which such service is charged to a telephone number, customer or account located in
this state or to the account of any transmission instrument in this state, or (2) rendered
by providing a private interstate telecommunications line on which the customer for
such line has two or more locations connected to such line and the charges for which
are related to (A) the number of customer locations connected to such line in this state,
(B) the distance between customer locations connected to such line in this state, and
(C) a portion of such line determined by a ratio, the numerator of which is the number
of air miles between the state border and the denominator of which is the number of air
miles between said closest connection to the state border in this state and the customer
location connected to such line which is closest to the state border outside this state.
(b) For purposes of determining the application of tax under this chapter to cellular
mobile telecommunications service in accordance with subdivision (1) of subsection
(a) of this section, (A) a call originated from a cellular mobile telephone shall be deemed
to have originated in this state if the first site in a cellular telephone system, at which
messages to or from cellular mobile telephones are transmitted or received, to establish
a completed call is located in this state, (B) a call terminated at a cellular mobile telephone
shall be deemed to have terminated in this state if the first such site to transmit the call
to such telephone is located in this state, (C) a call originated in this state as described
in subparagraph (A) of this subsection shall be deemed to have originated and terminated
in this state if the call terminates in this state, and (D) a call terminated in this state as
described in subparagraph (B) of this subsection shall be deemed to have originated and
terminated in this state if the call originates in this state. This subsection shall apply to
services that are rendered prior to August 2, 2002, provided, if a court of competent
jurisdiction enters a final judgment on the merits that is based on federal law, that is no
longer subject to appeal, and that substantially limits or impairs the essential elements
of Sections 116 to 126, inclusive, of Title 4 of the United States Code, this subsection
shall also apply to services that are rendered on or after the date of entry of such judgment.
(c) (1) For purposes of this subsection:
(A) "Mobile telecommunications service" means mobile telecommunications service, as defined in 4 USC 124;
(B) "Charges for mobile telecommunications services" means charges for mobile
telecommunications services, as defined in 4 USC 124;
(C) "Home service provider" means home service provider, as defined in 4 USC
124;
(D) "Customer" means customer, as defined in 4 USC 124;
(E) "Place of primary use" means place of primary use, as defined in 4 USC 124; and
(F) "Taxing jurisdiction" means taxing jurisdiction, as defined in 4 USC 124.
(2) (A) For purposes of determining the application of tax under this chapter to
mobile telecommunications service, mobile telecommunications services provided in
any taxing jurisdiction to a customer, the charges for which are billed by or for the
customer's home service provider, shall be deemed to be provided by the customer's
home service provider.
(B) Subject to the specific exceptions described in 4 USC 116(c), all charges for
mobile telecommunications services that are deemed to be provided by the customer's
home service provider are subject to tax under this chapter if the customer's place of
primary use is in this state regardless of where the mobile telecommunications services
originate, terminate or pass through.
(3) (A) A home service provider shall be responsible for obtaining and maintaining
a record of the customer's place of primary use. Except as provided in subdivision (4)
of this subsection, if the home service provider's reliance on the information provided
by its customer is in good faith: (i) The home service provider may rely on the applicable
residential or business street address supplied by the home service provider's customer;
and (ii) the home service provider shall not be held liable for any additional taxes under
this chapter based on a different determination of the place of primary use.
(B) Except as provided in subdivision (4) of this subsection, a home service provider
may treat the address used by the home service provider for purposes of this chapter,
for any customer under a service contract or agreement in effect on July 28, 2002, as
that customer's place of primary use for the remaining term of such service contract or
agreement, excluding any extension or renewal of such service contract or agreement.
(4) (A) If the commissioner determines that the address used by a home service
provider as a customer's place of primary use is not, in fact, the customer's place of
primary use, the commissioner shall notify such customer of such determination and
provide such customer an opportunity to demonstrate that the address used by a home
service provider as a customer's place of primary use is, in fact, the customer's place
of primary use.
(B) If the customer fails to demonstrate, to the satisfaction of the commissioner,
that the address is, in fact, the customer's place of primary use, the commissioner shall
provide the home service provider with notice of the proper address to be used as such
customer's place of primary use, and the home service provider shall begin using the
address provided by the commissioner as such customer's place of primary use on a
prospective basis from the date the commissioner provides notice of such address.
(5) (A) Notwithstanding any other provision of law, the commissioner may provide
an electronic database, as described in 4 USC 119, and any revisions to such database,
to a home service provider.
(B) If the commissioner does not provide an electronic database, as described in
subparagraph (A) of this subdivision, to a home service provider, the home service
provider shall be held harmless from tax under this chapter that otherwise would be due
solely as a result of an assignment of a street address to an incorrect taxing jurisdiction
if, subject to subdivision (4) of this subsection, the home service provider employs an
enhanced zip code to assign each street address to a specific taxing jurisdiction for each
level of taxing jurisdiction and exercises due diligence at each level of taxing jurisdiction
to ensure that each such street address is assigned to the correct taxing jurisdiction.
(6) (A) If a customer believes that an amount of tax or an assignment of place of
primary use or taxing jurisdiction included on a billing is erroneous, the customer shall
notify the home service provider in writing. The customer shall include in such written
notification the street address for the customer's place of primary use, the account name
and number for which the customer requests a correction, a description of the error
asserted by the customer and any other information that the home service provider reasonably requires to process the request. No later than sixty days after the date of receiving
a notice under this subdivision, the home service provider shall review its records. If
such review establishes that the amount of tax, or the assignment of place of primary
use or taxing jurisdiction is erroneous, then the home service provider shall correct the
error and refund or credit the amount of tax erroneously collected from the customer
for a period of up to two years from the date of the customer's written notification. If
such review establishes that the amount of tax, or the assignment of place of primary
use or taxing jurisdiction is correct, then the home service provider shall provide a
written explanation to the customer.
(B) If the customer is not satisfied with the explanation of the home service provider
under subparagraph (A) of this subdivision, the customer may claim a refund from
the taxing jurisdiction affected, provided the customer has first exhausted the remedy
available to customers under subparagraph (A) of this subdivision, and, if the customer
has done so and if the taxing jurisdiction affected is this state, the claim is made within
the time prescribed in section 12-425.
(7) This subsection shall apply to services that are rendered on or after August 2,
2002, provided, if a court of competent jurisdiction enters a final judgment on the merits
that is based on federal law, that is no longer subject to appeal, and that substantially
limits or impairs the essential elements of Sections 116 to 126, inclusive, of Title 4 of
the United States Code, this subsection shall be invalid and have no legal effect as of
the date of entry of such judgment.
(d) If nontaxable charges are aggregated with and not separately stated from taxable
charges for telecommunications services, then the nontaxable charges may be subject
to tax unless the provider can reasonably identify charges not subject to tax under this
chapter from its books and records that are kept in the regular course of business. A
customer may not rely upon the nontaxability of charges for services unless the customer's provider separately states the charges for nontaxable services from taxable charges
for telecommunications services or the provider elects, after receiving written request
from the customer in the form required by the provider, to provide verifiable data based
upon the provider's books and records that are kept in the regular course of business
that reasonably identifies the nontaxable charges.
(P.A. 89-251, S. 3, 203; June Sp. Sess. P.A. 91-3, S. 109, 168; June Sp. Sess. P.A. 01-6, S. 71, 85; P.A. 02-103, S. 2.)
History: June Sp. Sess. P.A. 91-3 amended Subsec. (a) to clarify that services which originate or terminate outside this
nation, as well as in another state, are subject to the tax, effective August 22, 1991, and applicable to sales occurring on
or after October 1, 1991; June Sp. Sess. P.A. 01-6 amended Subsec. (a) to add exception for Subsecs. (b) and (c) and make
technical changes, amended Subsec. (b) to add provisions re application of subsection and make a technical change, added
new Subsec. (c) to make the taxation under this chapter of cellular telephone calls and related services consistent with
federal law and added new Subsec. (d) re treatment of nontaxable charges, effective July 1, 2001, and applicable to customer
bills issued after the first day of the first month beginning more than two years after the date of enactment of Public Law
No. 106-252; P.A. 02-103 made technical changes in Subsec. (a).