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SECTION 186-E
Excise tax on telecommunication services
Tax (TAX) CHAPTER 60, ARTICLE 9
§ 186-e. Excise tax on telecommunication services. 1. Definitions. As
used in this section, where not otherwise specifically defined and
unless a different meaning is clearly required:

(a) (1) "Gross receipt" means the amount received in or by reason of
any sale, conditional or otherwise, of telecommunication services or in
or by reason of the furnishing of telecommunication services. Gross
receipt from the sale of mobile telecommunications service provided by a
home service provider shall include "charges for mobile
telecommunications service" as described in paragraph one of subdivision
(l) of section eleven hundred eleven of this chapter, regardless of
where the mobile telecommunications service originates, terminates or
passes through. Gross receipt is expressed in money, whether paid in
cash, credit or property of any kind or nature, and shall be determined
without any deduction therefrom on account of the cost of the service
sold or the cost of materials, labor or services used or other costs,
interest or discount paid, or any other expenses whatsoever except that
there shall, however, be allowed a deduction for bad debts with respect
to charges previously subjected to the tax hereunder when the debt has
become worthless in accordance with generally accepted accounting
principles consistently applied by the taxpayer. "Amount received" for
the purpose of the definition of gross receipt, as the term gross
receipt is used throughout this article, means the amount charged for
the provision of a telecommunication service.

(2) (A) Any charge for a service or property billed by or for a mobile
telecommunications customer's home service provider shall be deemed to
be provided by such mobile telecommunications customer's home service
provider.

(B) Charges for mobile telecommunications service that are provided or
deemed to be provided by a mobile telecommunications customer's home
service provider shall be sourced to the taxing jurisdiction where the
mobile telecommunications customer's place of primary use is located,
regardless of where the mobile telecommunications service originates,
terminates or passes through.

(b)(1) "Interexchange carrier" means any provider of telecommunication
services between two or more exchanges that qualifies as a common
carrier. Common carrier means any person engaged as a common carrier for
hire in intrastate, interstate or foreign telecommunication services.

(2) "Local carrier" means any provider of telecommunication services
for hire to the public, which is subject to the supervision of the
public service commission and is engaged in providing carrier access
service to a switched network. For the sole purpose of the application
of the sale for resale exclusion under paragraph (b) of subdivision two
of this section, a reference to an "interexchange carrier" or "local
carrier" shall include a cellular common carrier which is a
facilities-based cellular common carrier without regard to a
determination of whether such carrier is providing local or
interexchange service as such.

(c) "Person" means persons, corporations, companies, associations,
joint-stock companies or associations, partnerships or limited liability
companies, estates, assignee of rents, any person acting in a fiduciary
capacity, or any other entity, and persons, their assignees, lessees,
trustees or receivers, appointed by any court whatsoever, or by any
other means, except the state, municipalities, political and civil
subdivisions of the state or municipality, public districts and
corporations and associations organized and operated exclusively for
religious, charitable or educational purposes, no part of the net
earnings of which inures to the benefit of any private shareholder or
individual.

(d) "Private telecommunication service" means a dedicated
telecommunication service that entitles the user or users to the
exclusive or priority use of a communications channel or group of
channels from one or more locations to one or more locations.
"Exclusive" as used herein means that the user-subscribers have use of a
communications channel to the exclusion of all others who are not
authorized to use such channel, and "priority" as used herein means that
only authorized user-subscribers, as opposed to unauthorized persons,
receive preferential use of a communications channel, but not
necessarily a preference to the use of such channel with respect to each
other.

(e) "Provider of telecommunication services" means any person who
furnishes or sells telecommunications services regardless of whether
such activities are the main business of such person or are only
incidental thereto. Where a reference is made to a "utility" in this
chapter in regard to the tax imposed by this section or by this section
and section one hundred eighty-six-a of this article, such reference to
"utility" shall be deemed to include a reference to a provider of
telecommunication services.

(f) "Service address" means the location of the telecommunication
equipment from which the telecommunication is originated or at which the
telecommunication is received from the provider of telecommunication
services. The foregoing rule is amplified, but not limited, by the
following special provisions, which are listed in order of priority of
application so that only the first applicable special provision will
apply, if more than one potentially applies: (i) if the
telecommunication originates or terminates in this state and the service
is charged to telecommunication equipment which is not associated with
the origination or termination of the telecommunication (for example, by
the use of a calling card or third party billing) and the location of
such equipment is in this state, the service address of the
telecommunication will be deemed to be in this state; (ii) if the
service is obtained through the use of a credit or payment mechanism
such as a bank, travel, credit or debit card or if the service is
obtained by charging telecommunication equipment which is not associated
with the origination or termination of the telecommunication (for
example, by the use of a calling card or third party billing) and the
equipment is not located in the state of origination or termination,
then the service address is deemed to be the location of the origination
of the telecommunication; and (iii) if the service address is not a
defined location, as in the case of mobile telephones, paging systems,
maritime systems, air-to-ground systems and the like, service address
shall mean the location of the subscriber's primary use of the
telecommunication equipment as defined by telephone number,
authorization code, or location in this state where bills are sent,
provided, however, the location of the mobile telephone switching office
or similar facility in this state that receives and transmits the
signals of the telecommunication will be deemed the service address
where the mobile telephone switching office or similar facility is
outside the subscriber's assigned service area.

(g) "Telecommunication services" means telephony or telegraphy, or
telephone or telegraph service, including, but not limited to, any
transmission of voice, image, data, information and paging, through the
use of wire, cable, fiber-optic, laser, microwave, radio wave, satellite
or similar media or any combination thereof and shall include services
that are ancillary to the provision of telephone service (such as, but
not limited to, dial tone, basic service, directory information, call
forwarding, caller-identification, call-waiting and the like) and also
include any equipment and services provided therewith. Provided, the
definition of telecommunication services shall not apply to separately
stated charges for any service which alters the substantive content of
the message received by the recipient from that sent.

(h) For the purpose of applying the provisions of this section to
mobile telecommunications service, the following terms when used in
relation to mobile telecommunications service shall be defined as such
terms are defined in section eleven hundred one of this chapter: "mobile
telecommunications service," "mobile telecommunications customer," "home
service provider," "licensed service area," "reseller," "serving
carrier," "place of primary use" and "taxing jurisdiction".

2. Imposition. (a) (1) There is hereby imposed an excise tax on the
sale of telecommunication services, except for the sale of mobile
telecommunication services that are subject to tax under subparagraph
two of this paragraph, by any person which is a provider of
telecommunication services, to be paid by such person, at the rate of
three and one-half percent prior to October first, nineteen hundred
ninety-eight, three and one-quarter percent from October first, nineteen
hundred ninety-eight through December thirty-first, nineteen hundred
ninety-nine, and two and one-half percent on and after January first,
two thousand of gross receipt from: (i) any intrastate telecommunication
services; (ii) any interstate and international telecommunication
services (other than interstate and international private
telecommunication services) which originate or terminate in this state
and which telecommunication services are charged to a service address in
this state, regardless of where the amounts charged for such services
are billed or ultimately paid; and (iii) interstate and international
private telecommunication services, the gross receipt to which the tax
shall apply shall be determined as prescribed in subdivision three of
this section.

(2) There is hereby imposed an excise tax on the sale of mobile
telecommunication services, by any person which is a provider of
telecommunication services, to be paid by such person, at the rate of
two and nine-tenths percent on and after May first, two thousand fifteen
of gross receipts from any mobile telecommunications service provided by
a home service provider where the mobile telecommunications customer's
place of primary use is within this state.

(b) (1) Sale for resale exclusion. There shall be excluded from the
tax imposed by this section the sale of telecommunication services to a
provider of telecommunication services where such services are purchased
by such provider for resale as telecommunication services to its
purchasers. (i) All gross receipts are deemed taxable to the provider of
telecommunication services under this section, unless the provider,
within ninety days after the provision of telecommunication services,
has taken from the purchaser a certificate of resale in the form the
commissioner has prescribed, to document that the telecommunication
services were purchased for resale as telecommunication services. If the
provider of telecommunication services obtains a properly completed
certificate of resale from the purchaser within ninety days after the
provision of telecommunication services, that certificate constitutes
conclusive proof that the telecommunication services covered by the
certificate were sold for resale as telecommunication services, the
provider is relieved of liability for the tax due on the sale of those
services, and the burden of proving that the gross receipt is not
taxable is on the purchaser. Where a certificate of resale is received
within the time prescribed, but is deficient in some material manner,
and that deficiency is later removed, the receipt of the certificate
will be deemed to have satisfied all of the requirements of this clause.
Where a certificate of resale is not received within ninety days after
the provision of telecommunication services, the provider may, within
sixty days after a request by the commissioner, either prove that the
telecommunication services were sold for resale as telecommunication
services, or obtain a fully completed certificate of exemption from the
purchaser. A certificate of exemption obtained within this sixty day
period constitutes evidence, but not conclusive proof, that the
telecommunication services covered by the certificate were sold for
resale as telecommunication services. The certificate of exemption will
be administered in a manner consistent with subdivision (c) of section
eleven hundred thirty-two of this chapter.

(ii) A certificate of resale is not properly completed if it does not
include the purchaser's certificate of authority number issued pursuant
to section eleven hundred thirty-four of this chapter, or if the
purchaser's certificate of authority has expired or is invalid because
it has been suspended or revoked as provided in section eleven hundred
thirty-four of this chapter and the commissioner has furnished providers
of telecommunication services registered under that section with
information identifying those persons whose certificates of authority
have expired or have been suspended or revoked.

(iii) The relief provided by this subparagraph does not apply to a
provider of telecommunication services that fraudulently fails to pay
tax or solicits a purchaser or purchasers to submit one or more unlawful
certificates of exemption.

(iv) Any person who issues a false or fraudulent certificate of resale
with intent to evade tax is, in addition to any other penalty imposed,
subject to a penalty of one hundred percent of the tax that would have
been due had there not been a misuse of that certificate, plus a penalty
of fifty dollars for each false or fraudulent certificate.

(v) For any other sale of telecommunication services by a provider of
telecommunication services to a purchaser who resells those services as
telecommunication services but does not provide a properly completed
certificate of resale to the provider of telecommunication services in
accordance with the provisions of this subparagraph, the credit allowed
in subparagraph one of paragraph (a) of subdivision four of this section
shall be allowed.

(2) Cable television service exclusion. The sale of cable television
service shall in no event constitute a telecommunications service, and
the receipts from the sale of such service are without the scope of the
tax imposed by this section. The provision of such service shall mean
the transmitting to subscribers of programs broadcast by one or more
television or radio stations or any other programs originated by any
person by means of wire, cable, microwave or any other means.

(3) Air safety and navigation exclusion. There shall be excluded from
the tax imposed by this section, the sale of telecommunication services
to air carriers solely for the purpose of air safety and navigation
where such telecommunication service is provided by an organization, at
least ninety percent of which (if a corporation, ninety percent of the
voting stock of which) is owned, directly or indirectly, by air
carriers, and which organization's principal function is to fulfill the
requirements of (i) the federal aviation administration (or the
successor thereto) or (ii) the international civil aviation organization
(or the successor thereto), relating to the existence of a communication
system between aircraft and dispatcher, aircraft and air traffic control
or ground station and ground station (or any combination or the
foregoing) for the purposes of air safety and navigation.

(4) With respect to services or property described in subparagraph (B)
of paragraph one of subdivision (1) of section eleven hundred eleven of
this chapter and internet access service, a home service provider shall
pay tax on the gross receipt from any charge that is aggregated with and
not separately stated from other charges for mobile telecommunications
service. Provided, however, if such home service provider uses an
objective, reasonable and verifiable standard for identifying each of
the components of the charge for mobile telecommunications service, then
such home service provider may separately account for and quantify the
amount of each such component charge. If a home service provider chooses
to so separately account for and quantify and separately sells the
subparagraph (B) property or service or internet access service, then
the charge for such property or service shall be based upon the price
for such property or service as separately sold. If a home service
provider chooses to so separately account for and quantify and does not
separately sell such property or service, then the charge for such
property or service shall be based upon the prevailing retail price of
comparable property or service sold separately by other home service
providers. In any case, the charge for such property or service shall be
reasonable and proportionate to the total charge to the mobile
telecommunications customer. Such charges for such subparagraph (B)
services or property or internet access service, as the case may be,
will not constitute gross receipts from charges for mobile
telecommunications services. Nothing herein shall be construed to exempt
from tax any service or property otherwise subject to tax under this
section.

(c) Federal limitations. The tax imposed by this section shall not be
made applicable to the sale of telecommunication services under
circumstances which would preclude the application of such tax by reason
of the United States constitution and the laws of the United States
enacted pursuant thereto.

3. Apportionment for certain private telecommunication services. (a)
General. With respect to interstate and international private
telecommunication services, the gross receipt, if not separately
ascertainable for each use of such service, shall be determined as
follows: (1) one hundred percent of the charge imposed at each channel
termination point within this state, (2) one hundred percent of the
charge imposed for the use of a channel between channel termination
points within this state, and (3)(i) if each segment between each
termination point is separately billed and the amounts so billed are
fairly reflective of New York origination and/or termination traffic,
then one hundred percent of the charge imposed at each termination point
in New York and for service in New York between those points and fifty
percent of the charge imposed for service between a channel termination
point outside the state and a point inside the state measured by the
nearest termination point inside the state to first termination point
outside the state relative to such point inside the state, or (ii) if
each segment of the interstate or international circuit between each
channel termination point is not separately billed or if such billing
does not fairly reflect the New York origination and/or termination
traffic handled by such private telecommunication service, an allocated
portion of the interstate and international channel charge with respect
to points in New York and points outside the state based on the ratio
which the number of channel termination points in this state bears to
the total number of channel termination points within and without the
state.

(b) Other allocation methods. Where the commissioner decides that,
with respect to a certain provider of telecommunication services, the
method prescribed in paragraph (a) of this subdivision does not fairly
and equitably reflect the private telecommunication services
attributable to this state, the commissioner shall prescribe methods of
allocation which fairly and equitably reflect the private
telecommunication services attributable to this state. Provided,
further, that the commissioner may require that another allocation
method be used so as to insure that the sum of the allocation factor of
this state and the allocation factor of the other jurisdiction involved
is not greater than one. In making this determination, the commissioner
may take into account the reasonableness of the allocation prescribed by
other states.

4. Credits against tax. (a) Allowance of credits. The following
credits against the tax imposed under this section shall be allowed:

(1) Certain resold telecommunication services. A credit equal to the
amount of tax imposed by this section, with respect to the sale of
telecommunication services, shall be allowed to the purchaser where such
purchaser is a provider of telecommunication services, and where the
telecommunication service purchased are later resold by such purchaser
as telecommunication services, and the exclusion in subparagraph one of
paragraph (b) of subdivision two of this section is not allowed. To
accomplish the purpose of the credit, it shall be determined as follows:
the tax on the resold service shall be computed so that the tax under
this section is imposed on the difference between the amount of the
charge made by the provider to the purchaser and the amount of the
charge made by the purchaser for the resold service.

(2) Tax paid in another jurisdiction. With respect to the tax on
interstate or international telecommunication services imposed under
this section, in order to prevent actual multijurisdictional taxation of
a sale of telecommunication services which is the subject of taxation
under this section, any provider of telecommunication services or such
provider's purchaser, upon proof that such provider or purchaser has
actually paid a like tax to another state or country, or jurisdiction
thereof on such telecommunication services, shall be allowed a credit
against the tax imposed under this section. The amount of the credit
shall be the amount of tax lawfully due and paid to such other state or
country or jurisdiction, provided, however, the amount of the credit
shall in no event exceed the tax due to this state.

(b) Refunds-overpayments of tax. In lieu of the credits set forth in
paragraph (a) of this subdivision, the taxpayer may elect to take a
refund. Amounts to be credited or refunded under this subdivision shall
be considered overpayments of tax in accordance with the provisions of
section one thousand eighty-six of this chapter; provided, however, the
provisions of subsection (c) of section one thousand eighty-eight of
this chapter notwithstanding, no interest shall be paid on any credit or
refund allowed under subparagraph one of paragraph (a) of this
subdivision.

5. Record keeping. Every provider of telecommunication services
subject to tax under this section shall keep such records of its
business and in such form as the commissioner may require, and such
records shall be preserved for a period of three years, except that the
commissioner may consent to their destruction within that period or may
require that they be kept longer.

6. Returns. Every provider of telecommunication services subject to
tax under this section shall file, on or before March fifteenth of each
year, for taxable years beginning before January first, two thousand
sixteen, and on or before April fifteenth of each year, for taxable
years beginning on or after January first, two thousand sixteen, a
return for the year ended on the preceding December thirty-first, and
pay the tax due, which return shall state the gross receipts for the
period covered by each such return and the resale exclusions during such
period. Returns shall be filed with the commissioner on a form to be
furnished by the commissioner for such purpose and shall contain such
other data, information or matter as the commissioner may require to be
included therein. Notwithstanding the foregoing provisions of this
subdivision, the commissioner may require any provider of
telecommunication services to file an annual return, which shall contain
any data specified by the commissioner, regardless of whether such
provider is subject to tax under this section. Every return shall have
annexed thereto a certification by the head of the provider of
telecommunication services making the same, or of the owner or of a
partner or member thereof, or of a principal officer of the corporation,
if such business be conducted by a corporation, to the effect that the
statements contained therein are true.

7. (a) Applicability of article nine. If any provision of this section
conflicts with any other provision contained in this article, the
provision of this section shall control, but the provisions of this
article which do not conflict with the provisions of this section shall
apply with respect to the taxes under this section, so far as they are,
or may be made applicable. The taxes and surcharges imposed by this
section and sections one hundred eighty-four, one hundred eighty-four-a,
one hundred eighty-six-a, one hundred eighty-six-c, and one hundred
eighty-eight of this article may be jointly administered with respect to
years ending in nineteen hundred ninety-five and thereafter, in the
manner established by the commissioner.

(b) Applicability of Mobile Telecommunications Sourcing Act. The
provisions of sections 119(c), 120, 121 and 122 of title 4 of the United
States Code as enacted and in effect on July twenty-eighth, two
thousand, to the extent relevant and to the extent required by
preemption, shall apply to the provisions of this section in the same
manner and with the same force and effect as if the language of such
sections of such title 4 of the United States Code had been incorporated
in full into this section and had expressly referred to the tax under
this section, with such modifications as may be necessary in order to
adapt the language of such provisions to the tax imposed by this
section.

8. Enhanced emergency telephone system surcharge fee and public safety
communications surcharge. Notwithstanding any other provision contained
in this chapter or any other law, any surcharge collected or any
administrative fee retained by any provider of telecommunication
services acting as collection agent for a municipality pursuant to the
provisions of article six of the county law or acting as a collection
agent for the state pursuant to the provisions of section one hundred
eighty-six-f of this article will not be considered as, nor included in
the determination of gross receipts of the provider.

9. Distribution. Seven and six-tenths percent of the monies collected
from the excise tax imposed by this section shall be distributed
pursuant to subdivision three of section two hundred five of this
chapter.