CHAPTER 15. TAXING SITUS OF MOBILE TELECOMMUNICATIONS SERVICE
IC 6-8.1-15
Chapter 15. Taxing Situs of Mobile Telecommunications Service
IC 6-8.1-15-1
"Charges for mobile telecommunications service" defined
Sec. 1. As used in this chapter, "charges for mobiletelecommunications service" means any charge for or associated withthe provision of commercial mobile radio service, as defined inSection 20.3 of Title 47 of the Code of Federal Regulations as ineffect on June 1, 1999, or any charge for or associated with a serviceprovided as an adjunct to a commercial mobile radio service, that isbilled to the customer by or for the customer's home service providerregardless of whether individual transmissions originate or terminatewithin the licensed service area of the home service provider.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-2
"Customer" defined
Sec. 2. (a) As used in this chapter, except as provided insubsection (b), "customer" means:
(1) the person or entity that contracts with the home serviceprovider for mobile telecommunications service; or
(2) if the end user of mobile telecommunications service is notthe contracting party, the end user of the mobiletelecommunications service, but this subdivision applies onlyfor the purpose of determining the place of primary use.
(b) The term "customer" does not include:
(1) a reseller of mobile telecommunications service; or
(2) a serving carrier under an arrangement to serve the customeroutside the home service provider's licensed service area.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-3
"Designated data base provider" defined
Sec. 3. As used in this chapter, "designated data base provider"means a corporation, an association, or other entity representing thestate and political subdivisions of the state that is responsible forproviding an electronic data base under section 15 of this chapter andapproved by the department.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-4
"Enhanced ZIP code" defined
Sec. 4. As used in this chapter, "enhanced ZIP code" means aUnited States postal ZIP code of nine (9) or more digits.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-5
"Home service provider" defined
Sec. 5. As used in this chapter, "home service provider" means the
facilities based carrier or reseller with which the customer contractsfor the provision of mobile telecommunications service.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-6
"Licensed service area" defined
Sec. 6. As used in this chapter, "licensed service area" means thegeographic area in which the home service provider is authorized bylaw or contract to provide commercial mobile radio service to thecustomer.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-7
"Mobile telecommunications service" defined
Sec. 7. As used in this chapter, "mobile telecommunicationsservice" means commercial mobile radio service, as defined inSection 20.3 of Title 47 of the Code of Federal Regulations as ineffect on June 1, 1999.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-8
"Place of primary use" defined
Sec. 8. As used in this chapter, "place of primary use" means thestreet address representative of where the customer's use of themobile telecommunications service primarily occurs, which must be:
(1) the residential street address or the primary business streetaddress of the customer; and
(2) within the licensed service area of the home serviceprovider.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-9
"Prepaid telephone calling service" defined
Sec. 9. As used in this chapter, "prepaid telephone calling service"means the right to purchase exclusively telecommunications servicethat must be paid for in advance that enables the origination of callsusing an access number or authorization code, or both, whethermanually or electronically dialed, if the remaining amount of unitsof service that has been prepaid is known by the provider of theprepaid service on a continuous basis.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-10
"Reseller" defined
Sec. 10. As used in this chapter, "reseller" means a provider whopurchases telecommunications service from anothertelecommunications service provider and then resells, uses as acomponent part of, or integrates the purchased service into a mobiletelecommunications service. The term does not include a servingcarrier with which a home service provider arranges for the service
to its customers outside the home service provider's licensed servicearea.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-11
"Serving carrier" defined
Sec. 11. As used in this chapter, "serving carrier" means afacilities based carrier providing mobile telecommunications serviceto a customer outside a home service provider's or reseller's licensedservice area.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-12
Legislative findings of fact
Sec. 12. The general assembly finds that:
(1) the United States Congress has enacted the MobileTelecommunications Sourcing Act (4 U.S.C. 116 et seq.) for thepurpose of establishing uniform nationwide sourcing rules forstate and local taxation of mobile telecommunications service;
(2) the federal Mobile Telecommunications Sourcing Actprovides that taxes on mobile telecommunications service shallbe paid to the jurisdiction where the customer's primary use ofthe service occurs, irrespective of where the mobiletelecommunications service originates, terminates, or passesthrough; and
(3) it is desirable to implement the federal MobileTelecommunications Sourcing Act in Indiana.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-13
Application of chapter
Sec. 13. (a) Except as provided by section 20 of this chapter, thischapter applies to:
(1) the gross retail tax imposed on mobile telecommunicationsservice under IC 6-2.5-4-6;
(2) the monthly emergency wireless enhanced 911 fee imposedon mobile telecommunications service under IC 36-8-16.5; and
(3) any other tax, charge, or fee levied by the state or a taxingjurisdiction within Indiana as a fixed charge for each customeror measured by gross amounts charged to customers for mobiletelecommunications service, regardless of whether the tax,charge, or fee is imposed on the vendor or customer of theservice and regardless of the terminology used to describe thetax, charge, or fee;
on bills for mobile telecommunications service issued to customersafter July 31, 2002.
(b) This chapter does not apply to:
(1) any tax, charge, or fee levied upon or measured by the netincome, capital stock, net worth, or property value of theprovider of mobile telecommunications service; (2) any tax, charge, or fee that is applied to an equitablyapportioned amount that is not determined on a transactionalbasis;
(3) any tax, charge, or fee that:
(A) represents compensation for a mobiletelecommunications service provider's use of publicrights-of-way or other public property; and
(B) is not levied by the taxing jurisdiction as a fixed chargefor each customer or measured by gross amounts charged tocustomers for mobile telecommunication service;
(4) any generally applicable business and occupation tax that isimposed by the state, is applied to gross receipts or grossproceeds, is the legal liability of the home service provider, andthat statutorily allows the home service provider to elect to usethe sourcing method required in this section; or
(5) the determination of the taxing situs of:
(A) prepaid telephone calling service; or
(B) air-ground radiotelephone service as defined in Section22.99 of Title 47 of the Code of Federal Regulations as ineffect June 1, 1999.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-14
Sourcing of telecommunications service
Sec. 14. (a) Notwithstanding any other law, mobiletelecommunications service provided in a taxing jurisdiction to acustomer, the charges for which are billed by or for the customer'shome service provider, are considered to be provided by thecustomer's home service provider.
(b) All charges for mobile telecommunications service that areconsidered to be provided by the customer's home service providerunder this chapter are authorized to be subjected to tax, charge, orfee by the taxing jurisdictions whose territorial limits encompass thecustomer's place of primary use, regardless of where the mobiletelecommunication service originates, terminates, or passes through.
(c) This chapter does not:
(1) authorize a taxing jurisdiction to impose a tax, charge, or feethat the jurisdiction is not otherwise authorized to impose; or
(2) modify, impair, supersede, or authorize the modification,impairment, or supersession of the law of any taxingjurisdiction pertaining to taxation except as expressly providedby this chapter.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-15
Electronic data base
Sec. 15. (a) The department may provide an electronic data baseto a home service provider or, if the department does not provide anelectronic data base to home service providers, the designated database provider may provide an electronic data base to a home service
provider. The department or the designated data base provider shallprovide the data base in a format that complies with the requirementsof the federal Mobile Telecommunications Sourcing Act (4 U.S.C.116 et seq.).
(b) The department or designated data base provider shall providenotice of the availability of the then current electronic data base andany subsequent revisions of the data base by publication in themanner normally employed for the publication of informational tax,charge, or fee notices to taxpayers in Indiana.
(c) A home service provider using the data contained in anelectronic data base described in this section shall be held harmlessfrom any tax, charge, or fee liability that otherwise would be duesolely as a result of any error or omission in the data base. The homeservice provider shall reflect changes made to the data base duringa calendar quarter not later than thirty (30) days after the end of thecalendar quarter.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-16
Use of enhanced ZIP codes
Sec. 16. (a) If an electronic data base is not provided undersection 15 of this chapter, a home service provider shall be heldharmless from any tax, charge, or fee liability in Indiana thatotherwise would be due solely as a result of an assignment of a streetaddress to an incorrect taxing jurisdiction if, subject to section 18 ofthis chapter, the home service provider employs an enhanced ZIPcode to assign each street address to a specific taxing jurisdiction foreach level of taxing jurisdiction and exercises due diligence at eachlevel of taxing jurisdiction to ensure that each street address isassigned to the correct taxing jurisdiction. If an enhanced ZIP codeoverlaps boundaries of taxing jurisdictions of the same level, thehome service provider must designate one (1) specific jurisdictionwithin the enhanced ZIP code for use in taxing the activity for thatenhanced ZIP code for each level of taxing jurisdiction. Anyenhanced ZIP code assignment changed in accordance with section18 of this chapter is considered to be in compliance with this section.
(b) For purposes of this section, there is a rebuttable presumptionthat a home service provider has exercised due diligence if the homeservice provider demonstrates that it has:
(1) expended reasonable resources to implement and maintainan appropriately detailed electronic data base of street addressassignments to taxing jurisdictions;
(2) implemented and maintained reasonable internal controls topromptly correct misassignments of street addresses to taxingjurisdictions; and
(3) used all reasonably obtainable and usable data pertaining tomunicipal annexation, incorporations, reorganizations, and anyother changes in jurisdictional boundaries that materially affectthe accuracy of the data base.
(c) This section applies to a home service provider that is in
compliance with the requirements of this section until the later of:
(1) eighteen (18) months after the nationwide standard numericcode described in the federal Mobile TelecommunicationsSourcing Act (4 U.S.C. 116 et seq.) has been approved by theFederation of Tax Administrators and the Multistate TaxCommission; or
(2) six (6) months after the department or a designated data baseprovider provides a data base as described in section 15 of thischapter.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-17
Reliance on address supplied by customer
Sec. 17. (a) A home service provider is responsible for obtainingand maintaining the customer's place of primary use. Subject tosection 18 of this chapter, a home service provider may rely on theapplicable residential or business street address supplied by the homeservice provider's customer and is not liable for any additional taxes,charges, or fees based on a different determination of the place ofprimary use for taxes, charges, or fees that are customarily passed onto the customer as a separate itemized charge if the reliance oninformation provided by its customer is in good faith.
(b) Except as provided in section 18 of this chapter, a homeservice provider may treat the address used by the home serviceprovider for tax purposes for any customer under a service contractor agreement in effect on or before July 28, 2002, as that customer'splace of primary use for the remaining term of the service contract oragreement, excluding any extension or renewal of the servicecontract or agreement, for purposes of determining the taxingjurisdictions to which taxes, charges, or fees on charges for mobiletelecommunications service are remitted.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-18
Correction of erroneous data by department
Sec. 18. (a) The department may determine that the address usedfor purposes of determining the taxing jurisdictions to which taxes,charges, or fees for mobile telecommunications service are remitteddoes not meet the definition of "place of primary use" in this chapterand give binding notice to the home service provider to change theplace of primary use on a prospective basis from the date of noticeof determination. Before the department gives a notice ofdetermination, the customer must be given an opportunity todemonstrate in accordance with department rules and administrativeprocedures that the address is the customer's place of primary use.
(b) The department may determine that the assignment of a taxingjurisdiction by a home service provider under section 16 of thischapter does not reflect the correct taxing jurisdiction and givebinding notice to the home service provider to change the assignmenton a prospective basis from the date of notice of determination. The
home service provider must be given an opportunity to demonstratein accordance with department rules and administrative proceduresthat the assignment reflects the correct taxing jurisdiction.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-19
Identification of nontaxable services
Sec. 19. If charges for nontaxable mobile telecommunicationsservice are aggregated with and not separately stated from chargesthat are subject to taxation, the charges for nontaxable mobiletelecommunications service are subject to taxation unless the homeservice provider can reasonably identify charges not subject to thetax, charge, or fee from its books and records that are kept in theregular course of business.
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-20
Application of chapter if federal law invalidated
Sec. 20. Notwithstanding any other provision of this chapter, thischapter does not apply to any tax, charge, or fee levied by the stateor a taxing jurisdiction within Indiana beginning on the date of entryof a final judgment on the merits by a court that:
(1) is based on federal law;
(2) is no longer subject to appeal; and
(3) substantially limits or impairs the essential elements of thefederal Mobile Telecommunications Sourcing Act (4 U.S.C.116 et seq.).
As added by P.L.104-2002, SEC.2.
IC 6-8.1-15-21
Customer remedies
Sec. 21. (a) If a customer believes that an amount of tax, charge,or fee or an assignment of place of primary use or taxing jurisdictionincluded on a bill under this chapter is erroneous, the customer shallnotify the home service provider in writing. The customer shallinclude in the written notification the street address for thecustomer's place of primary use, the account name and number forwhich the customer seeks a correction, a description of the errorasserted by the customer, and any other information that the homeservice provider reasonably requires to process the request.
(b) Within sixty (60) days after receiving a notice under thissection, the home service provider shall review its records todetermine the customer's taxing jurisdiction. If the review shows thatthe amount of tax, charge, or fee or assignment of place of primaryuse or taxing jurisdiction is in error, the home service provider shallcorrect the error and refund or credit the amount of tax, charge, orfee erroneously collected from the customer for a period of up to two(2) years. If the review shows that the amount of tax, charge, or feeor assignment of place of primary use or taxing jurisdiction iscorrect, the home service provider shall provide a written explanation
to the customer.
(c) The procedures set forth in this section are the first course ofremedy available to a customer seeking correction of assignment ofplace of primary use or taxing jurisdiction, or a refund of or othercompensation for taxes, charges, or fees erroneously collected by thehome service provider. No cause of action based upon a disputearising from the collection of any such taxes, charges, or fees shallaccrue until a customer has exhausted the remedies set forth in thissection.
As added by P.L.104-2002, SEC.2.