CHAPTER 399
FORMERLY
HOUSE BILL NO. 492
AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TAXATION OF PUBLIC UTILITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each house thereof concurring therein):
Section 1. Amend § 5501(1)(a), Title 30 of the Delaware Code, by striking Subparagraph (iii) of said paragraph in its entirety and substituting in lieu thereof a new Subparagraph (iii) to read as follows:
“(iii) intrastate telephone services that are not intrastate mobile telecommunications services, intrastate mobile telecommunication services, and telegraph communication services;”.
Section 2. Amend § 5501(6), Title 30 of the Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new Subsection (6) to read as follows:
“(6)(a) ‘Intrastate mobile telecommunications services’ shall include the following:
(i) mobile telecommunications that originate and terminate in this State or that originate and terminate in the same state and, in either case, that are billed to a customer with a place of primary use in this State, other than charges which are specifically exempt from tax under § 5506, provided, however, that the taxation of such services shall be subject to the provisions of § 5508 of this Chapter; and
(ii) all mobile telecommunications services that are sold to a customer whose place of primary use is within this State for a fixed periodic charge, whether or not calls provided within that fixed periodic charge originate or terminate in the same state; provided, however, that the taxation of such services shall be subject to the provisions of § 5508 of this Chapter.
(b) ‘Intrastate mobile telecommunications services’ shall not include separately stated electronic paging services, internet access as defined in § 1104(5) of the Internet Tax Freedom Act, Pub. L. 105-277, 47 U.S.C. § 151 note (1998) as in effect on March 29, 2002, and interstate wireless data services.”.
Section 3. Amend § 5502(a), Title 30 of the Delaware Code, by striking said subsection in its entirety and substituting in lieu thereof a new Subsection (a) to read as follows:
“(a) A tax is imposed on intrastate telephone commodities and services distributed within this State and on intrastate mobile telecommunications services at the rate of 4.25% of the charges for such services.”.
Section 4. Amend § 5506(e), Title 30 of the Delaware Code, by striking the following phrase as it appears in said subsection “cellular communication services are provided to nonresidential consumers or users unless it can be demonstrated that the services are charged to a service address which is” and substitute in lieu thereof the following phrase:
“mobile telecommunications services are provided to nonresidential consumers or users unless it can be demonstrated that the services are charged to a place of primary use which is”.
Section 5. Amend Title 30 of the Delaware Code by adding thereto a new § 5508 to read as follows:
Ҥ 5508. Sourcing Rules for Mobile Telecommunications Services.
(a) Mobile telecommunications services shall be sourced according to the provisions of the federal Mobile Telecommunications Sourcing Act, 4 U.S.C. §§ 116-126. The definitions and provisions of such Act are hereby incorporated into this section by reference.
(b) (1) 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 written notification shall include the street address for the customer’s place of primary use, the account name and number for which the customer seeks a correction, a description of the error asserted by the customer, and any other information that the home service provider reasonably requests to process the claim.
(2) (i) Within sixty days of receiving a notice under this Section, the home service provider shall review its records. If this review shows the amount of tax or assignment of place of primary use or taxing jurisdiction is in error, then the home service provider shall correct the error and, within 90 days, refund or credit the amount of tax erroneously collected from the customer for a period of up to two years from the date of the customer’s written notice. If this review shows that the amount of tax or assignment of place of primary use or taxing jurisdiction is correct, then the home service provider shall provide a written explanation to the customer. In either event, the home service provider shall provide notice of any determination under this paragraph to the Director.
(ii) If the determination is adverse to the customer, the customer may protest such determination to the Director under § 523 of this Title as if such determination were a notice of proposed assessment. If the determination is in favor of the taxpayer, the Director may nonetheless direct the home service provider to treat Delaware as the place of primary use and shall give notice to the customer of such determination, from which the customer may protest as if the home service provider had determined adversely to the customer.
(3) The procedures in Subdivisions (b)(1) and (b)(2)(ii) of 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 erroneously collected by the home service provider, and no cause of action based upon a dispute arising from such taxes shall accrue to the extent otherwise permitted by law until a customer has reasonably exercised the rights and procedures set forth in those subdivisions of this section.”.
Section 6. It is declared to be the legislative intent that, if a Court of competent jurisdiction enters a final judgment on the merits that is based on federal law, is no longer subject to appeal, and substantially limits or impairs the essential elements of 4 U.S.C. §§ 116-126, then the provisions of this Act are invalid and have no legal effect as of the date of entry of such judgment.
Section 7. This act shall be effective for customer bills issued after August 1, 2002.