2023 Texas Statutes › Tax Code › Title 2 - State Taxation › Subtitle E - Sales, Excise, and Use Taxes › Chapter 151 - Limited Sales, Excise, and Use Tax › Subchapter C. Imposition and Collection of Sales Tax › Section 151.061. Sourcing of Charges for Mobile Telecommunications Services

Sec. 151.061.  SOURCING OF CHARGES FOR MOBILE TELECOMMUNICATIONS SERVICES.  (a)  In this section:
(1)  "Home service provider" means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications services.
(2)  "Place of primary use" means the street address that is representative of where the customer's use of the mobile telecommunications service primarily occurs.  That location must be the residential street address or the primary business street address of the customer that is within the licensed service area of the home service provider.
(3)  "Electronic database" means a database provided by the state or by a designated database provider to home service providers.  Such electronic database shall, allowing for de minimis deviations, designate for each street address in the state, including, to the extent practical, any multiple postal street addresses applicable to one street location, the appropriate taxing jurisdictions, and the appropriate code for each taxing jurisdiction, for each level of taxing jurisdiction, identified by one nationwide numeric code.  The nationwide standard numeric codes shall contain the same number of numeric digits, with each digit or combination of digits referring to the same level of taxing jurisdiction throughout the United States using a format similar to FIPS 55-3 or other appropriate standard approved by the Federation of Tax Administrators and the Multistate Tax Commission or their successors.  Each address shall be provided in standard postal format.  Such electronic database shall also provide the appropriate code for each street address with respect to political subdivisions which are not taxing jurisdictions when reasonably needed to determine the proper taxing jurisdictions.
(b)  This section applies to state and local sales and use taxes administered and computed under this title or Title 3 and to which this title or Title 3 applies, including this chapter.
(c)  The federal Mobile Telecommunications Sourcing Act (4 U.S.C. Sections 116-126) governs the sourcing of charges for mobile telecommunications services.  In accordance with that Act:
(1)  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;  and
(2)  all charges for mobile telecommunications services that are deemed to be provided by the customer's home service provider in accordance with this Act 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 telecommunications services originate, terminate, or pass through, and no other taxing jurisdiction may impose taxes, charges, or fees on charges for such mobile telecommunications services.
(d)  If a customer believes that an amount of tax or an assignment of place of primary use or taxing jurisdiction included on a billing is erroneous, the customer shall notify the home service provider in writing.  The customer shall include in the written notification:
(1)  the customer's street address for the customer's place of primary use;
(2)  the account name and number for which the customer requests the correction;
(3)  a description of the error asserted by the customer;  and
(4)  any other information that the home service provider reasonably requires to process the request.
(e)  Not later than the 60th day after the date the home service provider receives a request under Subsection (d), the home service provider shall review the provider's records and the electronic database or enhanced zip code to determine the correct amount of the tax imposed or the assignment of the customer's place of primary use or taxing jurisdiction, as appropriate.  If the home service provider determines that the amount of tax imposed or the assignment of place of primary use or taxing jurisdiction is incorrect, the home service provider shall correct the error and refund or credit any amount of tax erroneously collected from the customer.  The home service provider shall correct the error and refund or credit the amount of tax erroneously collected from the customer for a period of up to four years.  If the home service provider determines that the amount of tax imposed or the assignment of place of primary use or taxing jurisdiction is correct, the home service provider shall provide a written explanation to the customer.
(f)  The procedures prescribed by Subsections (d) and (e) are the first course of remedy available to a customer requesting a correction of assignment of place of primary use or of taxing jurisdiction or a refund of or other compensation for taxes erroneously collected by the home service provider.
(g)  The state may provide an electronic database, described in Subsection (a)(3), to a home service provider or, if the state does not provide such an electronic database to home service providers, the designated database provider may provide an electronic database to a home service provider.
(h)  The state or the designated database provider that provides or maintains an electronic database described in Subsection (a)(3) shall provide notice of the availability of the then current electronic database, and any subsequent revisions thereof, by publication in the manner normally employed by the state.
(i)  A home service provider using the data contained in an electronic database described in Subsection (a)(3) 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 the state or designated database 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.
(j)  If neither the state nor the designated database provider provides an electronic database as described in Subsection (a)(3), a home service provider shall be held harmless from any tax, charge, or fee liability in the 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 Subsection (n), 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 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 assignment changed in accordance with Subsection (n) is deemed to be in compliance with this section.  For purposes of this section, there is a rebuttable presumption that a home service provider has exercised due diligence if such home service provider demonstrates that it has:
(1)  expended reasonable resources to implement and maintain an appropriately detailed electronic database of street address assignments to taxing jurisdictions;
(2)  implemented and maintained reasonable internal controls to promptly correct misassignments of street addresses to taxing jurisdictions;  and
(3)  used all reasonably obtainable and usable data pertaining to municipal annexations, incorporations, reorganizations, and any other changes in jurisdictional boundaries that materially affect the accuracy of such database.
(k)  Subsection (j) applies to a home service provider that is in compliance with the requirements of Subsection (j), if an electronic database as defined in Subsection (a)(3) is not provided until the later of:
(1)  18 months after the nationwide standard numeric code described in Subsection (a)(3) has been approved by the Federation of Tax Administrators and the Multistate Tax Commission;  or
(2)  6 months after the state or a designated database provider in the state provides such database as prescribed in Subsection (a)(3).
(l)  A home service provider shall be responsible for obtaining and maintaining the customer's place of primary use as defined in Subsection (a)(2).  Subject to Subsection (n), 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 additional taxes, charges, or fees based on a different determination of the place of primary use for taxes, charges, or fees that are customarily passed on to the customer as a separate itemized charge.
(m)  Except as provided in Subsection (n), 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 two years after the date of the enactment of the Mobile Telecommunications Sourcing Act (4 U.S.C. Sections 116-126) as that customer's place of primary use for the remaining term of such service contract or agreement, excluding any extension or renewal of such service contract or agreement, for purposes of determining the taxing jurisdictions to which taxes, charges, or fees on charges for mobile telecommunications services are remitted.
(n)  The state may:
(1)  determine that the address used for purposes of determining the taxing jurisdictions to which taxes, charges, or fees for mobile telecommunications services are remitted does not meet the definition of place of primary use under Subsection (a)(2) 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.  Before the state gives such notice of determination, the customer shall be given an opportunity to demonstrate in accordance with applicable state administrative procedures that the address is the customer's place of primary use;  and
(2)  determine that the assignment of a taxing jurisdiction by a home service provider under Subsection (j) does not reflect the correct taxing jurisdiction and give binding notice to the home service provider to change the assignment on a prospective basis from the date of notice of determination.  The home service provider shall be given an opportunity to demonstrate in accordance with applicable state administrative procedures that the assignment reflects the correct taxing jurisdiction.
(o)(1) 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.
(2)  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 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.
Added by Acts 2001, 77th Leg., ch. 370, Sec. 1, eff. Aug. 1, 2002.