Section 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) There is hereby imposed an excise tax on the sale
  of telecommunication services 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: (1) any intrastate telecommunication
  services,  except  any telecommunication services the gross receipt from
  which is subject to tax under subparagraph four of this  paragraph;  (2)
  any  interstate and international telecommunication services (other than
  interstate and international private telecommunication services and  any
  telecommunication  services  the  gross receipt from which is subject to
  tax under subparagraph  four  of  this  paragraph)  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; (3)  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, except any telecommunication services
  the  gross  receipt from which is subject to tax under subparagraph four
  of this paragraph; and (4) 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,   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.