Text: H.R.4391 — 106th Congress (1999-2000)All Information (Except Text)

Text available as:

Shown Here:
Public Law No: 106-252 (07/28/2000)

 
[106th Congress Public Law 252]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ252.106]


[[Page 1]]

                        MOBILE TELECOMMUNICATIONS
                              SOURCING ACT

[[Page 114 STAT. 2]]

Public Law 106-252
106th Congress

                                 An Act


 
    To amend title 4 of the United States Code to establish sourcing 
 requirements for State and local taxation of mobile telecommunication 
            services. <<NOTE: July 28, 2000 -  [H.R. 4391]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Mobile Tele- communications 
Sourcing Act. 4 USC 1 note.>> assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mobile Telecommunications Sourcing 
Act''.

SEC. 2. AMENDMENTS TO TITLE 4 OF THE UNITED STATES CODE.

    (a) Amendment Relating to the States.--Chapter 4 of title 4 of the 
United States Code is amended by adding at the end the following:

``Sec. 116. Rules for determining State and local government treatment 
                        of charges related to mobile telecommunications 
                        services

    ``(a) Application of This Section Through Section 126.--This section 
through 126 of this title apply to any tax, charge, or fee levied by a 
taxing jurisdiction as a fixed charge for each customer or measured by 
gross amounts charged to customers for mobile telecommunications 
services, regardless of whether such tax, charge, or fee is imposed on 
the vendor or customer of the service and regardless of the terminology 
used to describe the tax, charge, or fee.
    ``(b) General Exceptions.--This section through 126 of this title do 
not apply to--
            ``(1) any tax, charge, or fee levied upon or measured by the 
        net income, capital stock, net worth, or property value of the 
        provider of mobile telecommunications service;
            ``(2) any tax, charge, or fee that is applied to an 
        equitably apportioned amount that is not determined on a 
        transactional basis;
            ``(3) any tax, charge, or fee that represents compensation 
        for a mobile telecommunications service provider's use of public 
        rights of way or other public property, provided that such tax, 
        charge, or fee is not levied by the taxing jurisdiction as a 
        fixed charge for each customer or measured by gross amounts 
        charged to customers for mobile telecommunication services;
            ``(4) any generally applicable business and occupation tax 
        that is imposed by a State, is applied to gross receipts or 
        gross proceeds, is the legal liability of the home service 
        provider, and that statutorily allows the home service provider 
        to elect

[[Page 114 STAT. 3]]

        to use the sourcing method required in this section through 126 
        of this title;
            ``(5) any fee related to obligations under section 254 of 
        the Communications Act of 1934; or
            ``(6) any tax, charge, or fee imposed by the Federal 
        Communications Commission.

    ``(c) Specific Exceptions.--This section through 126 of this title--
            ``(1) do not apply to the determination of the taxing situs 
        of prepaid telephone calling services;
            ``(2) do not affect the taxability of either the initial 
        sale of mobile telecommunications services or subsequent resale 
        of such services, whether as sales of such services alone or as 
        a part of a bundled product, if the Internet Tax Freedom Act 
        would preclude a taxing jurisdiction from subjecting the charges 
        of the sale of such services to a tax, charge, or fee, but this 
        section provides no evidence of the intent of Congress with 
        respect to the applicability of the Internet Tax Freedom Act to 
        such charges; and
            ``(3) do not apply to the determination of the taxing situs 
        of air-ground radiotelephone service as defined in section 22.99 
        of title 47 of the Code of Federal Regulations as in effect on 
        June 1, 1999.

``Sec. 117. Sourcing rules

    ``(a) Treatment of Charges for Mobile Telecommunications Services.--
Notwithstanding the law of any State or political subdivision of any 
State, mobile telecommunications services provided in a 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) Jurisdiction.--All charges for mobile telecommunications 
services that are deemed to be provided by the customer's home service 
provider under sections 116 through 126 of this title are authorized to 
be subjected to tax, charge, or fee by the taxing jurisdictions whose 
territorial limits encompass the customer's place of primary use, 
regardless of where the mobile telecommunication services originate, 
terminate, or pass through, and no other taxing jurisdiction may impose 
taxes, charges, or fees on charges for such mobile telecommunications 
services.

``Sec. 118. Limitations

    ``Sections 116 through 126 of this title do not--
            ``(1) provide authority to a taxing jurisdiction to impose a 
        tax, charge, or fee that the laws of such jurisdiction do not 
        authorize such jurisdiction to impose; or
            ``(2) modify, impair, supersede, or authorize the 
        modification, impairment, or supersession of the law of any 
        taxing jurisdiction pertaining to taxation except as expressly 
        provided in sections 116 through 126 of this title.

``Sec. 119. Electronic databases for nationwide standard numeric 
                        jurisdictional codes

    ``(a) Electronic Database.--
            ``(1)  Provision of database.--A State may provide an 
        electronic database to a home service provider or, if a State

[[Page 114 STAT. 4]]

        does not provide such an electronic database to home service 
        providers, then the designated database provider may provide an 
        electronic database to a home service provider.
            ``(2) Format.--(A) Such electronic database, whether 
        provided by the State or the designated database provider, shall 
        be provided in a format approved by the American National 
        Standards Institute's Accredited Standards Committee X12, that, 
        allowing for de minimis deviations, designates for each street 
        address in the State, including to the extent practicable, any 
        multiple postal street addresses applicable to one street 
        location, the appropriate taxing jurisdictions, and the 
        appropriate code for each taxing jurisdiction, for each level of 
        taxing jurisdiction, identified by one nationwide standard 
        numeric code.
            ``(B) Such electronic database shall also provide the 
        appropriate code for each street address with respect to 
        political subdivisions which are not taxing jurisdictions when 
        reasonably needed to determine the proper taxing jurisdiction.
            ``(C) The nationwide standard numeric codes shall contain 
        the same number of numeric digits with each digit or combination 
        of digits referring to the same level of taxing jurisdiction 
        throughout the United States using a format similar to FIPS 55-3 
        or other appropriate standard approved by the Federation of Tax 
        Administrators and the Multistate Tax Commission, or their 
        successors. Each address shall be provided in standard postal 
        format.

    ``(b) Notice; Updates.--A State or designated database provider that 
provides or maintains an electronic database described in subsection (a) 
shall provide notice of the availability of the then current electronic 
database, and any subsequent revisions thereof, by publication in the 
manner normally employed for the publication of informational tax, 
charge, or fee notices to taxpayers in such State.
    ``(c) User Held Harmless.--A home service provider using the data 
contained in an electronic database described in subsection (a) shall be 
held harmless from any tax, charge, or fee liability that otherwise 
would be due solely as a result of any error or omission in such 
database provided by a State or designated database 
provider. <<NOTE: Deadline.>> The home service provider shall reflect 
changes made to such database during a calendar quarter not later than 
30 days after the end of such calendar quarter for each State that 
issues notice of the availability of an electronic database reflecting 
such changes under subsection (b).

``Sec. 120. Procedure if no electronic database provided

    ``(a) Safe Harbor.--If neither a State nor designated database 
provider provides an electronic database under section 119, a home 
service provider shall be held harmless from any tax, charge, or fee 
liability in such State that otherwise would be due solely as a result 
of an assignment of a street address to an incorrect taxing jurisdiction 
if, subject to section 121, 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. If an 
enhanced zip code overlaps boundaries of taxing jurisdictions of the 
same level, the home service provider

[[Page 114 STAT. 5]]

must designate one specific jurisdiction within such enhanced zip code 
for use in taxing the activity for such enhanced zip code for each level 
of taxing jurisdiction. Any enhanced zip code assignment changed in 
accordance with section 121 is deemed to be in compliance with this 
section. For purposes of this section, there is a rebuttable presumption 
that a home service provider has exercised due diligence if such home 
service provider demonstrates that it has--
            ``(1) expended reasonable resources to implement and 
        maintain an appropriately detailed electronic database of street 
        address assignments to taxing jurisdictions;
            ``(2) implemented and maintained reasonable internal 
        controls to promptly correct misassignments of street addresses 
        to taxing jurisdictions; and
            ``(3) used all reasonably obtainable and usable data 
        pertaining to municipal annexations, incorporations, 
        reorganizations and any other changes in jurisdictional 
        boundaries that materially affect the accuracy of such database.

    ``(b) <<NOTE: Applicability.>>  Termination of Safe Harbor.--
Subsection (a) applies to a home service provider that is in compliance 
with the requirements of subsection (a), with respect to a State for 
which an electronic database is not provided under section 119 until the 
later of--
            ``(1) <<NOTE: Deadline.>> 18 months after the nationwide 
        standard numeric code described in section 119(a) has been 
        approved by the Federation of Tax Administrators and the 
        Multistate Tax Commission; or
            ``(2) 6 months after such State or a designated database 
        provider in such State provides such database as prescribed in 
        section 119(a).

``Sec. 121. Correction of erroneous data for place of primary use

    ``(a) In General.--A taxing jurisdiction, or a State on behalf of 
any taxing jurisdiction or taxing jurisdictions within such State, may--
            ``(1) determine that the address used for purposes of 
        determining the taxing jurisdictions to which taxes, charges, or 
        fees for mobile telecommunications services are remitted does 
        not meet the definition of place of primary use in section 
        124(8) and give binding notice to the home service provider to 
        change the place of primary use on a prospective basis from the 
        date of notice of determination if--
                    ``(A) if the taxing jurisdiction making such 
                determination is not a State, such taxing jurisdiction 
                obtains the consent of all affected taxing jurisdictions 
                within the State before giving such notice of 
                determination; and
                    ``(B) before the taxing jurisdiction gives such 
                notice of determination, the customer is given an 
                opportunity to demonstrate in accordance with applicable 
                State or local tax, charge, or fee administrative 
                procedures that the address is the customer's place of 
                primary use;
            ``(2) determine that the assignment of a taxing jurisdiction 
        by a home service provider under section 120 does not reflect 
        the correct taxing jurisdiction and give binding notice to the 
        home service provider to change the assignment on a prospective 
        basis from the date of notice of determination if--

[[Page 114 STAT. 6]]

                    ``(A) if the taxing jurisdiction making such 
                determination is not a State, such taxing jurisdiction 
                obtains the consent of all affected taxing jurisdictions 
                within the State before giving such notice of 
                determination; and
                    ``(B) the home service provider is given an 
                opportunity to demonstrate in accordance with applicable 
                State or local tax, charge, or fee administrative 
                procedures that the assignment reflects the correct 
                taxing jurisdiction.

``Sec.  122. Determination of place of primary use

    ``(a) Place of Primary Use.--A home service provider shall be 
responsible for obtaining and maintaining the customer's place of 
primary use (as defined in section 124). Subject to section 121, and if 
the home service provider's reliance on information provided by its 
customer is in good faith, a taxing jurisdiction shall--
            ``(1) allow a home service provider to rely on the 
        applicable residential or business street address supplied by 
        the home service provider's customer; and
            ``(2) not hold a home service provider liable for any 
        additional taxes, charges, or fees based on a different 
        determination of the place of primary use for taxes, charges, or 
        fees that are customarily passed on to the customer as a 
        separate itemized charge.

    ``(b) Address Under Existing Agreements.--Except <<NOTE: Effective 
date.>> as provided in section 121, a taxing jurisdiction shall allow a 
home service provider to treat the address used by the home service 
provider for tax purposes for any customer under a service contract or 
agreement in effect 2 years after the date of the enactment of the 
Mobile Telecommunications Sourcing Act 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, for purposes of determining the taxing jurisdictions to 
which taxes, charges, or fees on charges for mobile telecommunications 
services are remitted.

``Sec. 123. Scope; special rules

    ``(a) Act Does Not Supersede Customer's Liability to Taxing 
Jurisdiction.--Nothing in sections 116 through 126 modifies, impairs, 
supersedes, or authorizes the modification, impairment, or supersession 
of, any law allowing a taxing jurisdiction to collect a tax, charge, or 
fee from a customer that has failed to provide its place of primary use.
    ``(b) Additional Taxable Charges.--If a taxing jurisdiction does not 
otherwise subject charges for mobile telecommunications services to 
taxation and if these charges are aggregated with and not separately 
stated from charges that are subject to taxation, then the charges for 
nontaxable mobile telecommunications services may be subject to taxation 
unless the home service provider can reasonably identify charges not 
subject to such tax, charge, or fee from its books and records that are 
kept in the regular course of business.
    ``(c) Nontaxable Charges.--If a taxing jurisdiction does not subject 
charges for mobile telecommunications services to taxation, a customer 
may not rely upon the nontaxability of charges for mobile 
telecommunications services unless the customer's home service provider 
separately states the charges for nontaxable mobile telecommunications 
services from taxable charges or the home

[[Page 114 STAT. 7]]

service provider elects, after receiving a written request from the 
customer in the form required by the provider, to provide verifiable 
data based upon the home service provider's books and records that are 
kept in the regular course of business that reasonably identifies the 
nontaxable charges.

``Sec. 124. Definitions

    ``In sections 116 through 126 of this title:
            ``(1) Charges for mobile telecommunications services.--The 
        term `charges for mobile telecommunications services' means any 
        charge for, or associated with, the provision of commercial 
        mobile radio service, as defined in section 20.3 of title 47 of 
        the Code of Federal Regulations as in effect on June 1, 1999, or 
        any charge for, or associated with, a service provided as an 
        adjunct to a commercial mobile radio service, that is billed to 
        the customer by or for the customer's home service provider 
        regardless of whether individual transmissions originate or 
        terminate within the licensed service area of the home service 
        provider.
            ``(2) Customer.--
                    ``(A) In general.--The term `customer' means--
                          ``(i) the person or entity that contracts with 
                      the home service provider for mobile 
                      telecommunications services; or
                          ``(ii) if the end user of mobile 
                      telecommunications services is not the contracting 
                      party, the end user of the mobile 
                      telecommunications service, but this clause 
                      applies only for the purpose of determining the 
                      place of primary use.
                    ``(B) The term `customer' does not include--
                          ``(i) a reseller of mobile telecommunications 
                      service; or
                          ``(ii) a serving carrier under an arrangement 
                      to serve the customer outside the home service 
                      provider's licensed service area.
            ``(3) Designated database provider.--The term `designated 
        database provider' means a corporation, association, or other 
        entity representing all the political subdivisions of a State 
        that is--
                    ``(A) responsible for providing an electronic 
                database prescribed in section 119(a) if the State has 
                not provided such electronic database; and
                    ``(B) approved by municipal and county associations 
                or leagues of the State whose responsibility it would 
                otherwise be to provide such database prescribed by 
                sections 116 through 126 of this title.
            ``(4) Enhanced zip code.--The term `enhanced zip code' means 
        a United States postal zip code of 9 or more digits.
            ``(5) Home service provider.--The term `home service 
        provider' means the facilities-based carrier or reseller with 
        which the customer contracts for the provision of mobile 
        telecommunications services.
            ``(6) Licensed service area.--The term `licensed service 
        area' means the geographic area in which the home service 
        provider is authorized by law or contract to provide commercial 
        mobile radio service to the customer.

[[Page 114 STAT. 8]]

            ``(7) Mobile telecommunications service.--The term `mobile 
        telecommunications service' means commercial mobile radio 
        service, as defined in section 20.3 of title 47 of the Code of 
        Federal Regulations as in effect on June 1, 1999.
            ``(8) Place of primary use.--The term `place of primary use' 
        means the street address representative of where the customer's 
        use of the mobile telecommunications service primarily occurs, 
        which must be--
                    ``(A) the residential street address or the primary 
                business street address of the customer; and
                    ``(B) within the licensed service area of the home 
                service provider.
            ``(9) Prepaid telephone calling services.--The term `prepaid 
        telephone calling service' means the right to purchase 
        exclusively telecommunications services that must be paid for in 
        advance, that enables the origination of calls using an access 
        number, authorization code, or both, whether manually or 
        electronically dialed, if the remaining amount of units of 
        service that have been prepaid is known by the provider of the 
        prepaid service on a continuous basis.
            ``(10) Reseller.--The term `reseller'--
                    ``(A) means a provider who purchases 
                telecommunications services from another 
                telecommunications service provider and then resells, 
                uses as a component part of, or integrates the purchased 
                services into a mobile telecommunications service; and
                    ``(B) does not include a serving carrier with which 
                a home service provider arranges for the services to its 
                customers outside the home service provider's licensed 
                service area.
            ``(11) Serving carrier.--The term `serving carrier' means a 
        facilities-based carrier providing mobile telecommunications 
        service to a customer outside a home service provider's or 
        reseller's licensed service area.
            ``(12) Taxing jurisdiction.--The term `taxing jurisdiction' 
        means any of the several States, the District of Columbia, or 
        any territory or possession of the United States, any 
        municipality, city, county, township, parish, transportation 
        district, or assessment jurisdiction, or any other political 
        subdivision within the territorial limits of the United States 
        with the authority to impose a tax, charge, or fee.

``Sec. 125. Nonseverability

    ``If a court of competent jurisdiction enters a final judgment on 
the merits that--
            ``(1) is based on Federal law;
            ``(2) is no longer subject to appeal; and
            ``(3) substantially limits or impairs the essential elements 
        of sections 116 through 126 of this title,

then sections 116 through 126 of this title are invalid and have no 
legal effect as of the date of entry of such judgment.

``Sec. 126. No inference

    ``(a) Internet Tax Freedom Act.--Nothing in sections 116 through 
this section of this title shall be construed as bearing on 
Congressional intent in enacting the Internet Tax Freedom Act or to 
modify or supersede the operation of such Act.

[[Page 114 STAT. 9]]

    ``(b) Telecommunications Act of 1996.--Nothing in sections 116 
through this section of this title shall limit or otherwise affect the 
implementation of the Telecommunications Act of 1996 or the amendments 
made by such Act.''.
    (b) Technical Amendment.--The table of sections of chapter 4 of 
title 4, United States Code, is amended by adding the following after 
the item relating to section 115:

``116. Rules for determining State and local government treatment of 
           charges 
           related to mobile telecommunications services.
``117. Sourcing rules.
``118. Limitations.
``119. Electronic databases for nationwide standard numeric 
           jurisdictional codes.
``120. Procedure if no electronic database provided.
``121. Correction of erroneous data for place of primary use.
``122. Determination of place of primary use.
``123. Scope; special rules.
``124. Definitions.
``125. Nonseverability.
``126. No inference.''.

SEC. 3. <<NOTE: 4 USC 116 note.>> EFFECTIVE DATE; APPLICATION OF 
            AMENDMENT.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendment made by this Act shall take effect on the date of the 
enactment of this Act.
    (b) Application of Act.--The amendment made by this Act shall apply 
only to customer bills issued after the first day of the first month 
beginning more than 2 years after the date of the enactment of this Act.

    Approved July 28, 2000.

LEGISLATIVE HISTORY--H.R. 4391 (S. 1755):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 106-719 (Comm. on the Judiciary).
SENATE REPORTS: No. 106-326 accompanying S. 1755 (Comm. on Commerce, 
Science, and Transportation).
CONGRESSIONAL RECORD, Vol. 146 (2000):
            July 11, considered and passed House.
            July 14, considered and passed Senate.

                                  <all>