2023 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.