NY Tax L § 186-E (2021)
2021 New York Laws TAX - Tax Article 9 - Corporation Tax 186-E - Excise Tax on Telecommunication Services.

§  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.