[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1755 Introduced in Senate (IS)]
106th CONGRESS
1st Session
S. 1755
To amend the Communications Act of 1934 to regulate interstate commerce
in the use of mobile telephones.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 20, 1999
Mr. Brownback (for himself and Mr. Dorgan) introduced the following
bill; which was read twice and referred to the Committee on Commerce,
Science, and Transportation
_______________________________________________________________________
A BILL
To amend the Communications Act of 1934 to regulate interstate commerce
in the use of mobile telephones.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mobile Telecommunications Sourcing
Act''.
SEC. 2. FINDINGS
The Congress finds the following:
(1) The provision of mobile telecommunications services is
a matter of interstate commerce within the jurisdiction of the
United States Congress under Article I, Section 8 of the United
States Constitution. Certain aspects of mobile
telecommunications technologies and services do not respect,
and operate independently of, State and local jurisdictional
boundaries.
(2) The mobility afforded to millions of American consumers
by mobile telecommunications services helps to fuel the
American economy, facilitate the development of the information
superhighway and provide important safety benefits.
(3) Users of mobile telecommunications services can
originate a call in one State or local jurisdiction and travel
through other States or local jurisdictions during the course
of the call. These circumstances make it more difficult to
track the separate segments of a particular call with all of
the States and local jurisdictions involved with the call. In
addition, expanded home calling areas, bundled service
offerings and other marketing advances make it increasingly
difficult to assign each transaction to a specific taxing
jurisdiction.
(4) State and local taxes imposed on mobile
telecommunications services that are not consistently based can
subject consumers, businesses and others engaged in interstate
commerce to multiple, confusing and burdensome State and local
taxes and result in higher costs to consumers and the industry.
(5) State and local taxes that are not consistently based
can result in some telecommunications revenues inadvertently
escaping State and local taxation altogether, thereby violating
standards of tax fairness, creating inequities among
competitors in the telecommunications market and depriving
State and local governments of needed tax revenues.
(6) Because State and local tax laws and regulations of
many jurisdictions were established before the proliferation of
mobile telecommunications services, the application of these
laws to the provision of mobile telecommunications services may
produce conflicting or unintended tax results.
(7) State and local governments provide essential public
services, including services that Congress encourages State and
local governments to undertake in partnership with the Federal
government for the achievement of important national policy
goals.
(8) State and local governments provide services that
support the flow of interstate commerce, including services
that support the use and development of mobile
telecommunications services.
(9) State governments as sovereign entities in our Federal
system may require that interstate commerce conducted within
their borders pay its fair share of tax to support the
governmental services provided by those governments.
(10) Local governments as autonomous subdivisions of a
State government may require that interstate commerce conducted
within their borders pay its fair share of tax to support the
governmental services provided by those governments.
(11) To balance the needs of interstate commerce and the
mobile telecommunications industry with the legitimate role of
State and local governments in our system of federalism,
Congress needs to establish a uniform and coherent national
policy regarding the taxation of mobile telecommunications
services through the exercise of its constitutional authority
to regulate interstate commerce.
(12) Congress also recognizes that the solution established
by this legislation is a necessarily practical one and must
provide for a system of State and local taxation of mobile
telecommunications services that in the absence of this
solution would not otherwise occur. To this extent, Congress
exercises its power to provide a reasonable solution to
otherwise insoluble problems of multi-jurisdictional commerce.
SEC. 3. AMENDMENT OF COMMUNICATIONS ACT OF 1934 TO PROVIDE RULES FOR
DETERMINING STATE AND LOCAL GOVERNMENT TREATMENT OF
CHARGES RELATED TO MOBILE TELECOMMUNICATIONS SERVICES.
The Communications Act of 1934 (47 U.S.C. 151 et seq.) is amended
by adding at the end thereof the following:
``TITLE VIII--STATE AND LOCAL TREATMENT OF CHARGES FOR MOBILE
TELECOMMUNICATIONS SERVICES.
``SEC. 801. APPLICATION OF TITLE.
``(a) In General.--This title applies 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 title does 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 gross 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; or
``(4) any fee related to obligations under section 254 of
this Act.''.
``(c) Specific Exceptions.--This title--
``(1) does not apply to the determination of the taxing
situs of prepaid telephone calling services;
``(2) does not affect the taxability of either the initial
sale of mobile telecommunications services or subsequent
resale, whether as sales of the service alone or as a part of a
bundled product, where the Internet Tax Freedom Act would
preclude a taxing jurisdiction from subjecting the charges of
the sale of these mobile telecommunications 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) does not apply to the determination of the taxing
situs of air-ground radiotelephone service as defined in
section 22.99 of the Commission's regulations (47 C.F.R.
22.99).
``SEC. 802. SOURCING RULES.
``(a) In General.--Notwithstanding the law of any State or
political subdivision thereof to the contrary, 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) Jurisidiction.--All charges for mobile telecommunications
services that are deemed to be provided by the customer's home service
provider under 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. 803. LIMITATIONS.
``This title does not--
``(1) provide authority to a taxing jurisdiction to impose
a tax, charge, or fee that the laws of the jurisdiction do not
authorize the 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 this title.
``SEC. 804. ELECTRONIC DATABASES FOR NATIONWIDE STANDARD NUMERIC
JURISDICTIONAL CODES.
``(a) Electronic Database.--A State may provide an electronic
database to a home service provider or, if a State 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. The 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. The 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. 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 that State.
``(c) User Held Harmless.--A home service provider using the data
contained in the 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 the
electronic database provided by a State or designated database
provider. The home service provider shall reflect changes made to the
electronic database during a calendar quarter no later than 30 days
after the end of that calendar quarter for each State that issues
notice of the availability of an electronic database reflecting such
changes under subsection (b).
``SEC. 805. PROCEDURE WHERE NO ELECTRONIC DATABASE PROVIDED.
``(a) In General.--If neither a State nor designated database
provider provides an electronic database under section 804, a home
service provider shall be held harmless from any tax, charge, or fee
liability in that 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 806, 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. Where an enhanced zip code overlaps boundaries of taxing
jurisdictions of the same level, the home service provider must
designate one specific jurisdiction within such enhanced zip code for
use in taxing the activity for that enhanced zip code for each level of
taxing jurisdiction. Any enhanced zip code assignment changed in
accordance with section 806 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 the
electronic database.
``(b) 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 804 until the later of--
``(1) 18 months after the nationwide standard numeric code
described in section 804(a) has been approved by the Federation
of Tax Administrators and the Multistate Tax Commission; or
``(2) 6 months after that State or a designated database
provider in that State provides the electronic database as
prescribed in section 804(a).
``SEC. 806. 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
809(3) 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) where 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 customer is given an opportunity, prior
to such notice of determination, 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 805 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--
``(A) where 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. 807. DUTY OF HOME SERVICE PROVIDER REGARDING PLACE OF PRIMARY
USE.
``(a) Place of Primary Use.--A home service provider is responsible
for obtaining and maintaining the customer's place of primary use (as
defined in section 809). Subject to section 806, and if the home
service provider's reliance on information provided by its customer is
in good faith, a home service provider--
``(1) may rely on the applicable residential or business
street address supplied by the home service provider's
customer; and
``(2) is not 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 as provided in
section 806, a home service provider may 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 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. 808. SCOPE; SPECIAL RULES.
``(a) Title Does Not Supersede Customer's Liability to Taxing
Jurisdiction.--Nothing in this title 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
otherwise non-taxable 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) Non-taxable Charges.--If a taxing jurisdiction does not
subject charges for mobile telecommunications services to taxation, a
customer may not rely upon the non-taxability of charges for mobile
telecommunications services unless the customer's home service provider
separately states the charges for non-taxable mobile telecommunications
services from taxable charges or the home 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 non- taxable charges.
``(d) References to Regulations.--Any reference in this title to
the Commission's regulations is a reference to those regulations as
they were in effect on June 1, 1999.
``SEC. 809. DEFINITIONS.
``In 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 the
Commission's regulations (47 C.F.R. 20.3), 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) 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.
``(3) 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 either--
``(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.
``(4) 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.
``(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) 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) where 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.
``(7) 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 the electronic
database prescribed in section 804(a) if the State has
not provided such electronic database; and
``(B) sanctioned by municipal and county
associations or leagues of the State whose
responsibility it would otherwise be to provide the
electronic database prescribed by this title.
``(8) 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.
``(9) 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; but
``(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.
``(10) 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.
``(11) Mobile telecommunications service.--The term `mobile
telecommunications service' means commercial mobile radio
service, as defined in section 20.3 of the Commission's
regulations (47 C.F.R. 20.3).
``(12) Enhanced zip code.--The term `enhanced zip code'
means a United States postal zip code of 9 or more digits.
``SEC. 810. COMMISSION NOT TO HAVE JURISDICTION OF TITLE.
``Notwithstanding any other provision of this Act, the Commission
shall have no jurisidiction over the interpretation, implementation, or
enforcement of this title.
``SEC. 811. NONSEVERABILITY.
``If a court of competent jurisdiction enters a final judgment on
the merits that is no longer subject to appeal, which substantially
limits or impairs the essential elements of this title based on Federal
statutory or Federal Constitutional grounds, or which determines that
this title violates the United States Constitution, then the provisions
of this title are null and void and of no effect.
``SEC. 812. NO INFERENCE.
``(a) Internet Tax Freedom Act.--Nothing in this title may be
construed as bearing on Congressional intent in enacting the Internet
Tax Freedom Act or as affecting that Act in any way.
``(b) Telecommunications Act of 1996.--Nothing in this title shall
limit or otherwise affect the implementation of the Telecommunications
Act of 1996 or the amendments made by that Act.''.
SEC. 4. EFFECTIVE DATE.
The amendment made by section 3 applies to customer bills issued
after the first day of the first month beginning more than 2 years
after the date of enactment of this Act.
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