Current through Register Vol. 48, No. 38, September 20, 2024
a) For taxable years ending on or after
December 31, 2008, IITA Section 304(a)(3)(B-5) provides express guidance for
determining when gross receipts from the sale of telecommunications service or
mobile telecommunications service are in this State for purposes of computing
the sales factor in IITA Section 304(a)(3).
b) Definitions. For purposes of this Section,
the follow terms have the following meanings:
1) "Ancillary services" means services that
are associated with or incidental to the provision of "telecommunications
services", including but not limited to "detailed telecommunications billing",
"directory assistance", "vertical service", and "voice mail services". (IITA
Section 304(a)(3)(B-5)(i))
2)
"Air-to-ground radiotelephone service" means a radio service, as that term is
defined in
47 CFR
22.99(2007), in which common
carriers are authorized to offer and provide radio telecommunications service
for hire to subscribers in aircraft. (IITA Section 304(a)(3)(B-5)(i))
47 CFR
22.99 defines "air-to-ground ratiotelephone
service" to mean a "radio service in which licensees are authorized to offer
and provide radio telecommunications service for hire to subscribers in
aircraft".
3) "Call-by-call basis"
means any method of charging for telecommunications services where the price is
measured by individual calls. (IITA Section 304(a)(3)(B-5)(i))
4) "Communications channel" means a physical
or virtual path of communications over which signals are transmitted between or
among customer channel termination points. (IITA Section
304(a)(3)(B-5)(i))
5) "Conference
bridging service" means an ancillary service that links two or more
participants of an audio or video conference call and may include the provision
of a telephone number. "Conference bridging service" does not include the
telecommunications services used to reach the conference bridge. (IITA Section
304(a)(3)(B-5)(i))
6) "Customer
channel termination point" means the location where the customer either inputs
or receives the communications. (IITA Section 304(a)(3)(B-5)(i))
7) "Detailed telecommunications billing
service" means an ancillary service of separately stating information
pertaining to individual calls on a customer's billing statement. (IITA Section
304(a)(3)(B-5)(i))
8) "Directory
assistance" means an ancillary service of providing telephone number
information, and/or address information. (IITA Section
304(a)(3)(B-5)(i))
9) "Home service
provider"means the facilities-based carrier or reseller with which the customer
contracts for the provision of "mobile telecommunications services". (IITA
Section 304(a)(3)(B-5)(i))
10)
"Mobile telecommunications service"means commercial mobile radio service, as
defined in
47
CFR 20.3 (June 1, 1999). (IITA Section
304(a)(3)(B-5)(i))
A) "Commercial mobile
radio service" is defined in
47
CFR 20.3 (June 1, 1999) as "mobile service
that is provided for profit, i.e., with the intent of receiving compensation or
monetary gain; an interconnected service; and available to the public, or to
such classes of eligible users as to be effectively available to a substantial
portion of the public; or that is the functional equivalent of such a mobile
service."
B) "Interconnected
service" is defined in
47
CFR 20.3 (June 1, 1999) as a "service that is
interconnected with the public switched network, or interconnected with the
public switched network through an interconnected service provider, that gives
subscribers the capability to communicate to or receive communication from all
other users on the public switched network; or for which a request for such
interconnection is pending pursuant to
47 USC
332(c)(1)(B). A mobile
service offers interconnected service even if the service allows subscribers to
access the public switched network only during specified hours of the day, or
if the service provides general access to points on the public switched network
but also restricts access in certain limited ways. Interconnected service does
not include any interface between a licensee's facilities and the public
switched network exclusively for a licensee's internal control
purposes."
11) "Place of
primary use" means the street address representative of where the customer's
use of the telecommunications service primarily occurs, which must be the
residential street address or the primary business street address of the
customer. In the case of mobile telecommunications services, "place of primary
use" must be within the licensed service area of the home service provider.
(IITA Section 304(a)(3)(B-5)(i))
12) "Post-paid telecommunication service"
means the telecommunications service obtained by making a payment on a
call-by-call basis either through the use of a credit card or payment mechanism
such as a bank card, travel card, credit card, or debit card, or by charge made
to a telephone number which is not associated with the origination or
termination of the telecommunications service. A post-paid calling service
includes telecommunications service, except a prepaid wireless calling service,
that would be a prepaid calling service except it is not exclusively a
telecommunication service. (IITA Section 304(a)(3)(B-5)(i))
13) "Prepaid telecommunication service" means
the right to access exclusively telecommunications services, which must be paid
for in advance and which enables the origination of calls using an access
number or authorization code, whether manually or electronically dialed, and
that is sold in predetermined units or dollars of which the number declines
with use in a known amount. (IITA Section 304(a)(3)(B-5)(i))
14) "Prepaid mobile telecommunication
service" means a telecommunications service that provides the right to utilize
mobile wireless service as well as other non-telecommunication services,
including but not limited to ancillary services, which must be paid for in
advance that is sold in predetermined units or dollars of which the number
declines with use in a known amount. (IITA Section 304(a)(3)(B-5)(i))
15) "Private communication service" means a
telecommunication service that entitles the customer to exclusive or priority
use of a communications channel or group of channels between or among
termination points, regardless of the manner in which such channel or channels
are connected, and includes switching capacity, extension lines, stations, and
any other associated services that are provided in connection with the use of
such channel or channels. (IITA Section 304(a)(3)(B-5)(i))
16) "Service address" means:
A) The location of the telecommunications
equipment to which a customer's call is charged and from which the call
originates or terminates, regardless of where the call is billed or paid. (IITA
Section 304(a)(3)(B-5)(i))
B) If
the location in subsection (b)(16)(A) is not known, service address means the
origination point of the signal of the telecommunications services first
identified by either the seller's telecommunications system or in information
received by the seller from its service provider where the system used to
transport such signals is not that of the seller. (IITA Section
304(a)(3)(B-5)(i))
C) If the
locations in subsections (b)(16)(A) and (B) are not known, the service address
means the location of the customer's place of primary use. (IITA Section
304(a)(3)(B-5)(i))
17)
"Telecommunications service" means the electronic transmission, conveyance, or
routing of voice, data, audio, video, or any other information or signals to a
point, or between or among points. The term "telecommunications service"
includes such transmission, conveyance, or routing in which computer processing
applications are used to act on the form, code or protocol of the content for
purposes of transmission, conveyance or routing without regard to whether such
service is referred to as voice over Internet protocol services or is
classified by the Federal Communications Commission as enhanced or value added.
"Telecommunications service" does not include:
A) Data processing and information services
that allow data to be generated, acquired, stored, processed, or retrieved and
delivered by an electronic transmission to a purchaser when such purchaser's
primary purpose for the underlying transaction is the processed data or
information;
B) Installation or
maintenance of wiring or equipment on a customer's premises;
C) Tangible personal property;
D) Advertising, including but not limited to
directory advertising;
E) Billing
and collection services provided to third parties;
F) Internet access service;
G) Radio and television audio and video
programming services, regardless of the medium, including the furnishing of
transmission, conveyance and routing of such services by the programming
service provider. Radio and television audio and video programming services
shall include but not be limited to cable service as defined in
47
USC 522(6) and audio and
video programming services delivered by commercial mobile radio service
providers, as defined in
47
CFR 20.3.
i) Under
47
USC 522(6), "cable service"
is defined to mean "the one-way transmission to subscribers of video
programming or other programming service, and subscriber interaction, if any,
which is required for the selection or use of such video programming or other
programming service".
ii) For the
provisions of
47
CFR 20.3, see subsection (b)(1).
H) "Ancillary services";
or
I) Digital products "delivered
electronically", including but not limited to software, music, video, reading
materials or ring tones. (IITA Section 304(a)(3)(B-5)(i))
18) "Vertical service" means an "ancillary
service" that is offered in connection with one or more "telecommunications
services", which offers advanced calling features that allow customers to
identify callers and to manage multiple calls and call connections, including
"conference bridging services". (IITA Section 304(a)(3)(B-5)(i))
19) "Voice mail service" means an "ancillary
service" that enables the customer to store, send or receive recorded messages.
"Voice mail service" does not include any "vertical services" that the customer
may be required to have in order to utilize the "voice mail service". (IITA
Section 304(a)(3)(B-5)(i))
c) Receipts from the sale of
telecommunications service sold on an individual call-by-call basis are in this
State if either of the following applies:
1)
The call both originates and terminates in this State. (IITA Section
304(a)(3)(B-5)(ii)(a))
2) The call
either originates or terminates in this State and the service address is
located in this State. (IITA Section 304(a)(3)(B-5)(ii)(b))
d) Receipts from the sale of
postpaid telecommunications service at retail are in this State if the
origination point of the telecommunication signal, as first identified by the
service provider's telecommunication system or as identified by information
received by the seller from its service provider if the system used to
transport telecommunication signals is not the seller's, is located in this
State. (IITA Section 304(a)(3)(B-5)(iii))
f) Receipts from the sale of private
communication services are in this State as follows:
1) One hundred percent of receipts from
charges imposed at each channel termination point in this State. (IITA Section
304(a)(3)(B-5)(v)(a))
2) One
hundred percent of receipts from charges for the total channel mileage between
each channel termination point in this State. (IITA Section
304(a)(3)(B-5)(v)(b))
3) Fifty
percent of the total receipts from charges for service segments when those
segments are between two customer channel termination points, one of which is
located in this State and the other is located outside of this State, which
segments are separately charged. (IITA Section 304(a)(3)(B-5)(v)(c))
4) The receipts from charges for service
segments with a channel termination point located in this State and in two or
more other states, and which segments are not separately billed, are in this
State based on a percentage determined by dividing the number of customer
channel termination points in this State by the total number of customer
channel termination points. (IITA Section 304(a)(3)(B-5)(v)(d))
g) Receipts from charges for
ancillary services for telecommunications service sold to customers at retail
are in this State if the customer's primary place of use of telecommunications
services associated with those ancillary services is in this State. If the
seller of those ancillary services cannot determine where the associated
telecommunications are located, then the ancillary services shall be based on
the location of the purchaser. (IITA Section 304(a)(3)(B-5)(vi))
h) Receipts to access a carrier's network or
from the sale of telecommunication services or ancillary services for resale
are in this State as follows:
1) one hundred
percent of the receipts from access fees attributable to intrastate
telecommunications service that both originates and terminates in this State.
(IITA Section 304(a)(3)(B-5)(vii)(a))
2) fifty percent of the receipts from access
fees attributable to interstate telecommunications service if the interstate
call either originates or terminates in this State. (IITA Section
304(a)(3)(B-5)(vii)(b))
3) one
hundred percent of the receipts from interstate end user access line charges,
if the customer's service address is in this State. As used in this subsection
(h)(3), "interstate end user access line charges" includes, but is not limited
to, the surcharge approved by the Federal Communications Commission and levied
pursuant to 47 CFR 69. (IITA Section 304(a)(3)(B-5)(vii)(c))
4) Gross receipts from sales of
telecommunication services or from ancillary services for telecommunications
services sold to other telecommunication service providers for resale shall be
sourced to this State using the apportionment concepts used for non-resale
receipts of telecommunications services if the information is readily available
to make that determination. If the information is not readily available, then
the taxpayer may use any other reasonable and consistent method. (IITA Section
304(a)(3)(B-5)(vii)(d))