Iowa Administrative Code › Agency 701 - Revenue Department › Title III - Sales, Use, and Excise Tax › Chapter 217 - Telecommunication Services › Rule 701-217.6 - Sourcing Telecommunication Service

Current through Register Vol. 47, No. 3, July 24, 2024
(1) The general
				sourcing principles found in Iowa Code section
				423.15 apply to
				telecommunication services and ancillary services, unless the service falls
				under one of the exceptions set forth in subrule 217.6(2).
(2) Exceptions. The following
				telecommunication services and products are sourced as follows:
a. Mobile telecommunication service is
				sourced to the place of primary use, unless the service is prepaid wireless
				calling service.
b. The sale of
				prepaid calling service or prepaid wireless calling service is sourced as
				provided under Iowa Code section
				423.15. However, in the case of
				prepaid wireless calling service, Iowa Code section
				423.15(1)
"e"
shall include as an option the location associated with
				the mobile telephone number.
EXAMPLE 1: An Iowa seller sells a prepaid wireless service
				  airtime card to a consumer at an Iowa retail location. The sale of the prepaid
				  wireless service will be sourced to Iowa.
EXAMPLE 2: An Iowa resident purchases a prepaid wireless
				  service airtime card at a Nebraska retail location. The sale of the prepaid
				  wireless service will be sourced to Nebraska.
EXAMPLE 3: An Iowa consumer with an Iowa billing and mailing
				  address purchases prepaid wireless service through a retailer's website. No
				  items are delivered. The sale would be sourced to the consumer's Iowa billing
				  address.
EXAMPLE 4: A seller based in California uses a website to
				  sell prepaid wireless services to consumers in a number of states. A consumer
				  with an Iowa billing address and a Nebraska mailing address purchases prepaid
				  wireless service from the seller's website. The consumer already owns a prepaid
				  wireless phone; therefore, no item is delivered. Since there is no in-person
				  transaction, and no item delivered, the sale would be sourced to the consumer's
				  billing address in Iowa.
EXAMPLE 5: A seller based in California uses a website to
				  sell prepaid wireless services to consumers in a number of states. A consumer
				  with an Iowa mailing address and a Florida billing address purchases a prepaid
				  wireless phone and 100 minutes of prepaid wireless service from the California
				  seller. The prepaid wireless phone is shipped to the Iowa mailing address. The
				  sale would be sourced to Iowa.
EXAMPLE 6: A consumer who is currently living in Iowa to
				  attend a local university orders prepaid wireless service from a California
				  seller through the seller's website. No items are delivered. The consumer uses
				  a Nebraska billing address. The sale would be sourced to Nebraska.
c. A sale of a private
				telecommunication service is sourced as follows:
(1) Service for a separate charge related to
				a customer channel termination point is sourced to each level of jurisdiction
				in which the customer channel termination point is located.
(2) Service where all customer termination
				points are located entirely within one jurisdiction or levels of jurisdiction
				is sourced in the jurisdiction in which the customer channel termination points
				are located.
(3) Service for
				segments of a channel between two customer channel termination points located
				in different jurisdictions and which segments of channel are separately charged
				is sourced 50 percent in each level of jurisdiction in which the customer
				channel termination points are located.
(4) Service for segments of a channel located
				in more than one jurisdiction or levels of jurisdiction and which segments are
				not separately billed is sourced in each jurisdiction based on the percentage
				determined by dividing the number of customer channel termination points in the
				jurisdiction by the total number of customer channel termination
				points.
d. The sale of
				Internet access service is sourced to the customer's place of primary
				use.
e. The sale of an ancillary
				service is sourced to the customer's place of primary use.
f. A postpaid calling service is sourced to
				the origination point of the telecommunication signal as first identified by
				either:
(1) The seller's telecommunication
				system; or
(2) Information received
				by the seller from its service provider, where the system used to transport the
				signals is not that of the seller.
g. The sale of telecommunication service sold
				on a call-by-call basis is sourced to:
(1)
				Each level of taxing jurisdiction where the call originates and terminates in
				that jurisdiction; or
(2) Each
				level of taxing jurisdiction where the call either originates or terminates and
				in which the service address is also located.
h. The sale of telecommunication service sold
				on a basis other than a call-by-call basis is sourced to the customer's place
				of primary use.
i. The sale of the
				following telecommunication services is sourced to each level of taxing
				jurisdiction as follows:
(1) A sale of mobile
				telecommunication service, other than prepaid calling service, is sourced to
				the customer's place of primary use as required by the federal Mobile
				Telecommunications Sourcing Act.
(2) A sale of postpaid calling service is
				sourced to the origination point of the telecommunication signal as first
				identified by either the seller's telecommunication system or information
				received by the seller from its service provider, where the system used to
				transport such signals is not that of the seller.
This rule is intended to implement Iowa Code section
				  423.20.