Mobile Telecommunications Sourcing Act
PL 106-252 (H.R.4391), enacted 07/28/2000

114 STAT. 626 
PUBLIC LAW 106-252^JULY 28, 2000 
Public Law 106-252 
106th Congress 
An Act 
Jiily 28, 2000 
To amend title 4 of the United States Code to establish sourcing requirements 
4 u s e 1 note. 
[H.R. 4391] 
^°^ State and local taxation of mobile telecommunication services. 
Be it enacted by the Senate and House of Representatives 
of 
Mobile Tele- 
the United States of America in Congress assembled, 
communications 
Sourcing Act. 
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: 
*
*
§ 116. Rules for determining State and local government 
treatment of charges related to mobile tele-
communications 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 
titl 
PUBLIC LAW 106-252—JULY 28, 2000 
114 STAT. 627 
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 Commu-
nications Commission. 
"(c) SPECIFIC EXCEPTIONS.—^This section through 126 of this 
"(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. 
*
*
§ 117. Sourcing rules 
"(a) 
TREATMENT OF CHARGES FOR MOBILE 
TELECOMMUNI-
CATIONS SERVICES.—^Notwithstanding the law of any State or polit-
ical 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. 
"§ 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 modifica-
tion, 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. 
"§ 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 
11.4 STAT. 628 
PUBLIC LAW 106-252-JULY 28, 2000 
Deadline. 
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 pro-
vided 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 appro-
priate 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 appro-
priate 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 combina-
tion 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 pro-
vider 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 data-
base provider. 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). 
*
*
§ 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 
PUBLIC LAW 106-252^JULY 28, 2000 
114 STAT. 629 
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 assign-
ment 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 exer-
cised due diligence if such home service provider demonstrates 
that it has— 
"(1) expended reasonable resources to implement and main-
tain an appropriately detailed electronic database of street 
address assignments to taxing jurisdictions; 
"(2) implemented and maintained reasonable internal con-
trols to promptly correct misassignments of street addresses 
to taxing jurisdictions; and 
"(3) used all reasonably obtainable and usable data per-
taining to municipal annexations, incorporations, reorganiza-
tions and any other changes in jurisdictional boundaries that 
materially affect the accuracy of such database. 
"(b) TERMINATION OF SAFE HARBOR.—Subsection (a) applies 
to a home service provider that is in compliance with the require-
ments of subsection (a), with respect to a State for which an 
electronic database is not provided under section 119 until the 
later of— 
"(1) 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). 
^§ 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 deter-
mining 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 determina-
tion 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 prospec-
tive basis from the date of notice of determination if— 
Applicability. 
Deadline. 
114 STAT. 630 
PUBLIC LAW 106-252—JULY 28, 2000 
"(A) if the taxing jurisdiction making such determina-
tion 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. 
"§ 122. Detiermination 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 addi-
tional 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. 
Effective date. 
"(b) ADDRESS UNDER EXISTING AGREEMENTS.—Except as pro-
vided 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 juris-
dictions to which taxes, charges, or fees on charges for mobile 
telecommunications services are remitted. 
"§ 123. Scope; special rules 
"(a) 
ACT DOES NOT SUPERSEDE CUSTOMER'S LIABILITY TO 
TAXING JURISDICTION.—Nothing in sections 116 through 126 modi-
fies, impairs, supersedes, or authorizes the modification, impair-
ment, 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 
PUBLIC LAW 106-252^JULY 28, 2000 
114 STAT. 631 
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. 
"§ 124. Definitions 
"In sections 116 through 126 of this title: 
"(1) 
CHARGES FOR MOBILE TELECOMMUNICATIONS SERV-
ICES.—The term 'charges for mobile telecommunications serv-
ices' 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 trans-
missions 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 'des-
ignated 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 other-
wise 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 pro-
vider' means the facilities-based carrier or reseller with which 
the customer contracts for the provision of mobile telecommuni-
cations services. 
"(6) LICENSED SERVICE AREA.—The term 'Hcensed 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. 
114 STAT. 632 
PUBLIC LAW 106-252—JULY 28, 2000 
"(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 cus-
tomer's use of the mobile telecommunications service primarily 
occurs, which must be— 
"(A) the residential street address or the primary busi-
ness 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 elec-
tronically 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 telecommuni-
cations services from another telecommunications service 
provider and then resells, uses as a component part of, 
or integrates the purchased services into a mobile tele-
communications 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 munici-
pality, 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. 
"§ 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. 
"§ 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. 
PUBLIC LAW 106-252—JULY 28, 2000 
114 STAT. 633 
"(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. 
"130, Procedvire 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. EFFECTIVE DATE; APPLICATION OF AMENDMENT. 
4 USC 116 note. 
(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. 
L E G I S L A T I V E 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. 
Jxily 14, considered and passed Senate.