§ 68-55001. Definitions – Implementation of federal law – Taxes to which act applies – Services deemed to be provided by home service provider.

A.  As used in this section:

1.  “Charges for mobile telecommunications services” 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 transmissions originate or terminate within the licensed service area of the home service provider;

2.a.              “Customer” means, in general:

(1)the person or entity that contracts with the home service provider for mobile telecommunications services, or

(2)if the end user of mobile telecommunications services is not the contracting party, the end user of the mobile telecommunications service, but this division applies only for the purpose of determining the place of primary use.

b.The term “customer” does not include:

(1)a reseller of mobile telecommunications service, or

(2)a serving carrier under an arrangement to serve the customer outside the home service provider's licensed service area;

3.  “Designated database provider” means a corporation, association, or other entity representing the state and political subdivisions of the state that is:

a.responsible for providing an electronic database prescribed in Section 3 of this act, and

b.approved by the Tax Commission;

4.  “Enhanced zip code” means a United States postal zip code of 9 or more digits;

5.  “Home service provider” means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications services;

6.  “Licensed 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;

7.  “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” means the street address representative of where the customer's use of the mobile telecommunications service primarily occurs, which must be:

a.the residential street address or the primary business street address of the customer, and

b.within the licensed service area of the home service provider;

9.  “Prepaid telephone calling services” 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 electronically 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” means a provider who purchases telecommunications services from another telecommunications service provider and then resells, uses as a component part of, or integrates the purchased services into a mobile telecommunications service.  The term “reseller” 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; and

11.  “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.

B.  The Oklahoma Legislature finds that the United States Congress has enacted the Mobile Telecommunications Sourcing Act for the purpose of establishing uniform nationwide sourcing rules for state and local taxation of mobile telecommunications services.  In general, the rules provide that taxes on mobile telecommunications services shall be paid to the jurisdiction where the customer’s primary use of such services occurs, irrespective of where the mobile telecommunications services originate, terminate, or pass through.  The Oklahoma Legislature desires to implement the federal Mobile Telecommunications Sourcing Act in the state, and to make state and local government officials aware of its provisions.  The Oklahoma Legislature recognizes that the federal act is intended to provide sourcing rules in a manner that is revenue-neutral among the states, and that the sourcing rules required by it are likely in fact to be revenue-neutral at the state level.  The Oklahoma Legislature further finds that the federal requirements are within the powers of the federal government.

C.  1.  This act shall apply to the tax imposed by Section 1354 of Title 68 of the Oklahoma Statutes and any tax, charge, or fee that may be levied by the state or a taxing jurisdiction within this state 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.

2.  This act does not apply to:

a.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,

b.any tax, charge, or fee that is applied to an equitably apportioned amount that is not determined on a transactional basis,

c.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, or

d.any generally applicable business and occupation tax that is imposed by the 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 to use the sourcing method required in this section.

3.  The provisions of this act:

a.do not apply to the determination of the taxing situs of prepaid telephone calling services, and

b.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.

D.  1.  Notwithstanding any other provision of law of this state or any political subdivision of this 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.

2.  All charges for mobile telecommunications services that are subject to the tax imposed by Section 1354 of Title 68 of the Oklahoma Statutes and that are deemed under this act to be provided to a customer’s place of primary use within this state by the customer's home service provider are subject to the tax, regardless of where the mobile telecommunication services originate, terminate, or pass through.

3.  A home service provider shall be responsible for obtaining and maintaining the customer's place of primary use.  Subject to the provisions of paragraph 5 of this subsection, a home service provider may rely on the applicable residential or business street address supplied by the home service provider's customer, and will not be 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 if the reliance on information provided by its customer is in good faith.

4.  Except as provided in paragraph 5 of this subsection, a home service provider may treat the address used by the home service provider for tax purposes for any customer under a service contract or agreement in effect on or before July 28, 2002, 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.

5.  The Oklahoma Tax Commission may:

a.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” in this section 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 Tax Commission gives such notice of determination, the customer shall be given an opportunity to demonstrate in accordance with Tax Commission rules and administrative procedures that the address is the customer's place of primary use, or

b.determine that the assignment of a taxing jurisdiction by a home service provider under Section 3 of this act 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 Tax Commission rules and administrative procedures that the assignment reflects the correct taxing jurisdiction.

6.  If charges for nontaxable mobile telecommunications services are aggregated with and not separately stated from charges that are subject to taxation, then the charges for nontaxable mobile telecommunications services will be subject to taxation unless the home service provider can reasonably identify charges not subject to the tax, charge, or fee from its books and records that are kept in the regular course of business.

7.  If a customer believes that an amount of tax, charge or fee, or 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 this written notification the street address for the place of primary use, the account name and number for which the customer seeks a correction of the tax assignment, a description of the error asserted by the customer, and any other information that the home service provider reasonably requires to process the request.  Within sixty (60) days of receiving a notice under this section, the home service provider shall review its records and the electronic database or enhanced zip code to determine the customer’s taxing jurisdiction.  If this review shows that the amount of tax, charge or fee, or assignment of place of primary use or taxing jurisdiction is in error, the home service provider shall correct the error and refund or credit the amount of tax, charge or fee erroneously collected from the customer for a period of up to two (2) years.  If this review shows that the amount of tax, charge or fee, or assignment of place of primary use or taxing jurisdiction is correct, the home service provider shall provide a written explanation to the customer.  The procedures in this section shall be the first course of remedy available to customers seeking correction of assignment of place of primary use or taxing jurisdiction, or a refund of or other compensation for taxes, charges or fees erroneously collected by the home service provider, and no cause of action based upon a dispute arising from the Act shall accrue until a customer has reasonably exercised the rights and procedure set forth herein.

Added by Laws 2001, c. 153, § 2.