§ 423.20 — Telecommunications service sourcing

Iowa § 423.20

• Jurisdiction: Iowa
• Title X: FINANCIAL RESOURCES
• Ch. 423: STREAMLINED SALES AND USE TAX ACT

Text

1. As used in this section:
a. “Air-to-ground radiotelephone service” means a radio service, as that term is used
in 47 C.F.R. §22.99, in which common carriers are authorized to offer and provide radio
telecommunications service for hire to subscribers in aircraft.
b. “Call-by-call basis” means any method of charging for the telecommunications service
where the price is measured by individual calls.
c. “Communications channel” means a physical or virtual path of communications over
which signals are transmitted between or among customer channel termination points.
d. “Customer” means the person or entity that contracts with the seller of the
telecommunications service. If the end user of the telecommunications service is not the
contracting party, the end user of the telecommunications service is the customer of the
telecommunications service, but this sentence only applies for the purpose of sourcing sales
of the telecommunications service under this section. “Customer” does not include a reseller

of a telecommunications service or for mobile telecommunications service of a serving
carrier under an agreement to serve the customer outside the home service provider’s
licensed service area.
e. “Customer channel termination point” means the location where the customer either
inputs or receives the communications.
f. “End user” means the person who utilizes the telecommunications service. In the case
of an entity, “end user” means the individual who utilizes the service on behalf of the entity.
g. “Home service provider” means the same as that term is defined in the federal Mobile
Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. §124(5).
h. “Mobile telecommunications service” means the same as that term is defined in the
federal Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252, 4 U.S.C. §124(7).
i. “Place of primary use” means the street address representative of where the customer’s
use of the telecommunications service primarily occurs, which must be the residential
street address or the primary business street address of the customer. In the case of mobile
telecommunications service, “place of primary use” must be within the licensed service area
of the home service provider.
j. “Postpaid calling service” means the telecommunications service obtained by making a
payment on a call-by-call basis either through the use of a credit card or payment mechanism
such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone
numberwhichisnotassociatedwiththeoriginationorterminationofthetelecommunications
service. A “postpaid calling service” includes a telecommunications service, except a prepaid
wireless calling service, that would be a prepaid calling service except it is not exclusively a
telecommunications service.
k. “Prepaid calling service” means the right to access exclusively telecommunications
services, which must be paid for in advance and which enables the origination of calls using
an access number or authorization code, whether manually or electronically dialed, and that
is sold in predetermined units or dollars of which the amount declines with use in a known
amount.
l. “Prepaid wireless calling service” means a telecommunications service that provides
the right to utilize mobile wireless service as well as other nontelecommunications services,
including the download of digital products delivered electronically, content and ancillary
services, which must be paid for in advance and that is sold in predetermined units or dollars
of which the amount declines with use in a known amount.
m. “Private communication service” means a telecommunications service that entitles the
customer to exclusive or priority use of a communications channel or group of channels
between or among termination points, regardless of the manner in which such channel or
channels are connected, and includes switching capacity, extension lines, stations, and any
other associated services that are provided in connection with the use of such channel or
channels.
n. “Service address” means one of the following:
(1) The location of the telecommunications equipment to which a customer’s call is
charged and from which the call originates or terminates, regardless of where the call is
billed or paid.
(2) If the location in subparagraph (1) is not known, “service address” means the
origination point of the signal of the telecommunications service first identified by either the
seller’s telecommunications system or in information received by the seller from its service
provider, where the system used to transport such signals is not that of the seller.
(3) If the locations in subparagraphs (1) and (2) are not known, the “service address”
means the location of the customer’s place of primary use.
2. Sales of telecommunications services shall be sourced in the following manner:
a. Except for the defined telecommunications services in paragraph “c”, the sale of
telecommunications services sold on a call-by-call basis shall be sourced to one of the
following:
(1) Each level of taxing jurisdiction where the call originates and terminates in that
jurisdiction.

(2) Each level of taxing jurisdiction where the call either originates or terminates and in
which the service address is also located.
b. Except for the defined telecommunications services in paragraph “c”, a sale of
telecommunications services sold on a basis other than a call-by-call basis is sourced to the
customer’s place of primary use.
c. Sale of the following telecommunications services shall be sourced to each level of
taxing jurisdiction as follows:
(1) A sale of mobile telecommunications services other than air-to-ground radiotelephone
service, prepaid calling service, or prepaid wireless 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
telecommunications signal as first identified by either of the following:
(a) The seller’s telecommunications system.
(b) Information received by the seller from its service provider, where the system used to
transport such signals is not that of the seller.
(3) A sale of prepaid calling service or a sale of prepaid wireless calling service is sourced
in accordance with section 423.15. However, in the case of a sale of a prepaid wireless calling
service, the rule provided in section 423.15, subsection 1, paragraph “e”, shall include as an
option the location associated with the mobile telephone number.
(4) A sale of a private telecommunications service is sourced as follows:
(a) Service for a separate charge related to a customer channel termination point is
sourced to each level of jurisdiction in which such customer channel termination point is
located.
(b) Service where all customer termination points are located entirely within one
jurisdiction or level of jurisdiction is sourced in such jurisdiction in which the customer
channel termination points are located.
(c) Service for segments of a channel between two customer channel termination points
located in different jurisdictions and which segments of a channel are separately charged is
sourced fifty percent in each level of jurisdiction in which the customer channel termination
points are located.
(d) Service for segments of a channel located in more than one jurisdiction or levels of
jurisdictionandwhichsegmentsarenotseparatelybilledissourcedineachjurisdictionbased
onthepercentagedeterminedbydividingthenumberofcustomerchannelterminationpoints
in such jurisdiction by the total number of customer channel termination points.