Full Text of HB5257 94th General Assembly
HB5257 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB5257
Introduced 01/25/06, by Rep. Bill Mitchell SYNOPSIS AS INTRODUCED: |
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35 ILCS 630/2 |
from Ch. 120, par. 2002 |
35 ILCS 638/10 |
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Amends the Telecommunications Excise Tax Act and the Mobile Telecommunications Sourcing Conformity Act. Provides that the terms "service address" and "primary place of use" include the 9-digit enhanced United States postal zip code. Effective immediately.
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A BILL FOR
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HB5257 |
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Telecommunications Excise Tax Act is amended | 5 |
| by changing Section 2 as follows:
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| (35 ILCS 630/2) (from Ch. 120, par. 2002)
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| Sec. 2. As used in this Article, unless the context clearly | 8 |
| requires
otherwise:
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| (a) "Gross charge" means the amount paid for the act or
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| privilege of originating or receiving telecommunications in | 11 |
| this State and
for all services and equipment provided in | 12 |
| connection therewith by a
retailer, valued in money whether | 13 |
| paid in money or otherwise, including
cash, credits, services | 14 |
| and property of every kind or nature, and shall be
determined | 15 |
| without any deduction on account of the cost of such
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| telecommunications, the cost of materials used, labor or | 17 |
| service costs or
any other expense whatsoever. In case credit | 18 |
| is extended, the amount
thereof shall be included only as and | 19 |
| when paid.
"Gross charges" for private line service shall | 20 |
| include charges imposed at
each channel termination point | 21 |
| within this State, charges for the channel
mileage
between each | 22 |
| channel termination point within this State, and charges for
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| that portion
of the interstate inter-office channel provided | 24 |
| within Illinois. Charges for
that portion of the interstate | 25 |
| inter-office channel provided in Illinois shall
be determined | 26 |
| by the retailer as follows: (i) for interstate
inter-office | 27 |
| channels having 2 channel termination points, only one of which
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| is in Illinois, 50% of the total charge imposed; or (ii) for | 29 |
| interstate
inter-office channels having more than 2 channel | 30 |
| termination points, one or
more of which
are in Illinois, an | 31 |
| amount equal to the total charge
multiplied by a fraction, the | 32 |
| numerator of which is the number of channel
termination points |
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| within Illinois and the denominator of which is the total
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| number of channel termination points. Prior to January 1,
2004, | 3 |
| any method consistent with this
paragraph or other method that | 4 |
| reasonably apportions the total charges for
interstate | 5 |
| inter-office channels among the states in which channel | 6 |
| terminations
points are located shall be accepted as a | 7 |
| reasonable method to determine the
charges for
that portion of | 8 |
| the interstate inter-office channel provided within Illinois
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| for that period. However, "gross charges" shall not include any | 10 |
| of the
following:
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| (1) Any amounts added to a purchaser's bill because of | 12 |
| a charge made
pursuant to (i) the tax imposed by this | 13 |
| Article; (ii) charges added to
customers' bills pursuant to | 14 |
| the provisions of Sections 9-221 or 9-222 of
the Public | 15 |
| Utilities Act, as amended, or any similar charges added to
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| customers' bills by retailers who are not subject to rate | 17 |
| regulation by
the Illinois Commerce Commission for the | 18 |
| purpose of recovering any of the
tax liabilities or other | 19 |
| amounts specified in such provisions of such
Act; (iii) the | 20 |
| tax imposed by Section 4251 of the Internal Revenue Code;
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| (iv) 911 surcharges; or (v) the tax imposed by the | 22 |
| Simplified Municipal
Telecommunications Tax Act.
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| (2) Charges for a sent collect telecommunication | 24 |
| received outside of the
State.
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| (3) Charges for leased time on equipment or charges for | 26 |
| the storage of
data or information for subsequent retrieval | 27 |
| or the processing of data or
information intended to change | 28 |
| its form or content. Such equipment
includes, but is not | 29 |
| limited to, the use of calculators, computers, data
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| processing equipment, tabulating equipment or accounting | 31 |
| equipment and also
includes the usage of computers under a | 32 |
| time-sharing agreement.
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| (4) Charges for customer equipment, including such | 34 |
| equipment that is
leased or rented by the customer from any | 35 |
| source, wherein such charges are
disaggregated and | 36 |
| separately identified from other charges.
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| (5) Charges to business enterprises certified under | 2 |
| Section 9-222.1
of the Public Utilities Act, as amended, to | 3 |
| the extent of such exemption
and during the period of time | 4 |
| specified by the Department of Commerce and
Economic | 5 |
| Opportunity
Community Affairs .
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| (6) Charges for telecommunications and all services | 7 |
| and equipment
provided in connection therewith between a | 8 |
| parent corporation and its
wholly owned subsidiaries or | 9 |
| between wholly owned subsidiaries when the tax
imposed | 10 |
| under this Article has already been paid to a
retailer and | 11 |
| only to the extent that the charges between the parent
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| corporation and wholly owned subsidiaries or between | 13 |
| wholly owned
subsidiaries represent expense allocation
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| between the corporations and not the generation of profit | 15 |
| for the
corporation rendering such service.
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| (7) Bad debts. Bad debt means any portion of a debt | 17 |
| that is related
to a sale at retail for which gross charges | 18 |
| are not otherwise deductible or
excludable that has become | 19 |
| worthless or uncollectable, as determined under
applicable | 20 |
| federal income tax standards. If the portion of the debt | 21 |
| deemed to
be bad is subsequently paid, the retailer shall | 22 |
| report and pay the tax on that
portion during the reporting | 23 |
| period in which the payment is made.
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| (8) Charges paid by inserting coins in coin-operated | 25 |
| telecommunication
devices.
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| (9) Amounts paid by telecommunications retailers under | 27 |
| the
Telecommunications Municipal Infrastructure | 28 |
| Maintenance Fee Act.
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| (10) Charges for nontaxable services or | 30 |
| telecommunications if (i) those
charges are
aggregated
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| with other
charges for telecommunications that are | 32 |
| taxable, (ii) those charges are not
separately stated
on | 33 |
| the
customer bill or invoice, and (iii) the retailer can | 34 |
| reasonably identify the
nontaxable
charges on
the | 35 |
| retailer's books and records kept in the regular course of | 36 |
| business. If the
nontaxable
charges cannot reasonably be |
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| identified, the gross charge from the sale of both
taxable
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| and nontaxable services or telecommunications billed on a | 3 |
| combined basis shall
be
attributed to the taxable services | 4 |
| or telecommunications. The burden of proving
nontaxable
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| charges
shall be on the retailer of the telecommunications.
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| (b) "Amount paid" means the amount charged to the | 7 |
| taxpayer's service
address in this State regardless of where | 8 |
| such amount is billed or paid.
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| (c) "Telecommunications", in addition to the meaning | 10 |
| ordinarily and
popularly ascribed to it, includes, without | 11 |
| limitation, messages or
information transmitted through use of | 12 |
| local, toll and wide area telephone
service; private line | 13 |
| services; channel services; telegraph services;
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| teletypewriter; computer exchange services; cellular mobile
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| telecommunications service; specialized mobile radio; | 16 |
| stationary two way
radio; paging service; or any other form of | 17 |
| mobile and portable one-way or
two-way communications; or any | 18 |
| other transmission of messages or
information by electronic or | 19 |
| similar means, between or among points by
wire, cable, | 20 |
| fiber-optics, laser, microwave, radio, satellite or similar
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| facilities. As used in this Act, "private line" means a | 22 |
| dedicated non-traffic
sensitive service for a single customer, | 23 |
| that entitles the customer to
exclusive or priority use of a | 24 |
| communications channel or group of channels,
from one or more | 25 |
| specified locations to one or more other specified
locations. | 26 |
| The definition of "telecommunications" shall not include value
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| added services in which computer processing applications are | 28 |
| used to act on
the form, content, code and protocol of the | 29 |
| information for purposes other
than transmission. | 30 |
| "Telecommunications" shall not include purchases of
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| telecommunications by a telecommunications service provider | 32 |
| for use as a
component part of the service provided by him to | 33 |
| the ultimate retail
consumer who originates or terminates the | 34 |
| taxable end-to-end
communications. Carrier access charges, | 35 |
| right of access charges, charges
for use of inter-company | 36 |
| facilities, and all telecommunications resold in
the |
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| subsequent provision of, used as a component of, or integrated | 2 |
| into
end-to-end telecommunications service shall be | 3 |
| non-taxable as sales for resale.
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| (d) "Interstate telecommunications" means all | 5 |
| telecommunications that
either originate or terminate outside | 6 |
| this State.
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| (e) "Intrastate telecommunications" means all | 8 |
| telecommunications that
originate and terminate within this | 9 |
| State.
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| (f) "Department" means the Department of Revenue of the | 11 |
| State of Illinois.
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| (g) "Director" means the Director of Revenue for the | 13 |
| Department of
Revenue of the State of Illinois.
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| (h) "Taxpayer" means a person who individually or through | 15 |
| his agents,
employees or permittees engages in the act or | 16 |
| privilege of originating or
receiving telecommunications in | 17 |
| this State and who incurs a tax liability
under this Article.
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| (i) "Person" means any natural individual, firm, trust, | 19 |
| estate, partnership,
association, joint stock company, joint | 20 |
| venture, corporation, limited liability
company, or a | 21 |
| receiver, trustee, guardian or other representative appointed | 22 |
| by
order of any court, the Federal and State governments, | 23 |
| including State
universities created by statute or any city, | 24 |
| town, county or other political
subdivision of this State.
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| (j) "Purchase at retail" means the acquisition, | 26 |
| consumption or use of
telecommunication through a sale at | 27 |
| retail.
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| (k) "Sale at retail" means the transmitting, supplying or | 29 |
| furnishing of
telecommunications and all services and | 30 |
| equipment provided in connection
therewith for a consideration | 31 |
| to persons other than the Federal and State
governments, and | 32 |
| State universities created by statute and other than between
a | 33 |
| parent corporation and its wholly owned subsidiaries or between | 34 |
| wholly
owned subsidiaries for their use or consumption and not | 35 |
| for resale.
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| (l) "Retailer" means and includes every person engaged in |
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| the business
of making sales at retail as defined in this | 2 |
| Article. The Department may, in
its discretion, upon | 3 |
| application, authorize the collection of the tax
hereby imposed | 4 |
| by any retailer not maintaining a place of business within
this | 5 |
| State, who, to the satisfaction of the Department, furnishes | 6 |
| adequate
security to insure collection and payment of the tax. | 7 |
| Such retailer shall
be issued, without charge, a permit to | 8 |
| collect such tax. When so
authorized, it shall be the duty of | 9 |
| such retailer to collect the tax upon
all of the gross charges | 10 |
| for telecommunications in this State in the same
manner and | 11 |
| subject to the same requirements as a retailer maintaining a
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| place of business within this State. The permit may be revoked | 13 |
| by the
Department at its discretion.
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| (m) "Retailer maintaining a place of business in this | 15 |
| State", or any
like term, means and includes any retailer | 16 |
| having or maintaining within
this State, directly or by a | 17 |
| subsidiary, an office, distribution
facilities, transmission | 18 |
| facilities, sales office, warehouse or other place
of business, | 19 |
| or any agent or other representative operating within this
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| State under the authority of the retailer or its subsidiary, | 21 |
| irrespective
of whether such place of business or agent or | 22 |
| other representative is
located here permanently or | 23 |
| temporarily, or whether such retailer or
subsidiary is licensed | 24 |
| to do business in this State.
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| (n) "Service address" means the location , including the | 26 |
| 9-digit enhanced United States postal zip code, of | 27 |
| telecommunications equipment
from which the telecommunications | 28 |
| services are originated or at which
telecommunications | 29 |
| services are received by a taxpayer. In the event this may
not | 30 |
| be a defined location, as in the case of mobile phones, paging | 31 |
| systems,
maritime systems, service address means the | 32 |
| customer's place of primary use
as defined in the Mobile | 33 |
| Telecommunications Sourcing Conformity Act , including the | 34 |
| 9-digit enhanced United States postal zip code . For
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| air-to-ground systems and the like, service address shall mean | 36 |
| the location , including the 9-digit enhanced United States |
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| postal zip code,
of a taxpayer's primary use of the | 2 |
| telecommunications equipment as defined by
telephone number, | 3 |
| authorization code, or location in Illinois where bills are
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| sent.
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| (o) "Prepaid telephone calling arrangements" mean the | 6 |
| right to exclusively
purchase telephone or telecommunications | 7 |
| services that must be paid for in
advance and enable the | 8 |
| origination of one or more intrastate, interstate, or
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| international telephone calls or other telecommunications | 10 |
| using an access
number, an authorization code, or both, whether | 11 |
| manually or electronically
dialed, for which payment to a | 12 |
| retailer must be made in advance, provided
that, unless | 13 |
| recharged, no further service is provided once that prepaid
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| amount of service has been consumed. Prepaid telephone calling | 15 |
| arrangements
include the recharge of a prepaid calling | 16 |
| arrangement. For purposes of this
subsection, "recharge" means | 17 |
| the purchase of additional prepaid telephone or
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| telecommunications services whether or not the purchaser | 19 |
| acquires a different
access number or authorization code. | 20 |
| "Prepaid telephone calling arrangement"
does not include an | 21 |
| arrangement whereby a customer purchases a payment card and
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| pursuant to which the service provider reflects the amount of | 23 |
| such purchase as
a credit on an invoice issued to that customer | 24 |
| under an existing subscription
plan.
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| (Source: P.A. 92-474, eff. 8-1-02; 92-526, eff.
1-1-03; 92-878, | 26 |
| eff. 1-1-04; 93-286, 1-1-04; revised 12-6-03.)
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| Section 10. The Mobile Telecommunications Sourcing | 28 |
| Conformity Act is amended by changing Section 10 as follows:
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| (35 ILCS 638/10)
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| Sec. 10. Definitions. As used in this Act:
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| "Charges for mobile telecommunications services" means any | 32 |
| charge for, or
associated with, the provision of commercial | 33 |
| mobile radio service, as defined
in Section 20.3 of Title 47 of | 34 |
| the Code of Federal Regulations as in effect on
June 1, 1999, |
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| or any charge for, or associated with, a service provided as an
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| adjunct to a commercial mobile radio service, that is billed to | 3 |
| the customer by
or for the customer's home service provider | 4 |
| regardless of whether individual
transmissions originate or | 5 |
| terminate within the licensed service area of the
home service | 6 |
| provider.
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| "Customer" means (i) the person or entity that contracts | 8 |
| with the home
service provider for mobile telecommunications | 9 |
| services or (ii) if the end
user of mobile telecommunications | 10 |
| services is not the contracting party, the
end user of the | 11 |
| mobile telecommunications services, but this clause (ii)
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| applies
only for the purpose of determining the place of | 13 |
| primary use. "Customer" does
not include (i) a reseller of | 14 |
| mobile telecommunications service or (ii) a
serving carrier | 15 |
| under an arrangement to serve the customer outside the home
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| service provider's licensed service area.
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| "Designated database provider" means a corporation, | 18 |
| association, or other
entity representing all the political | 19 |
| subdivisions of a State that is:
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| (i) responsible for providing an electronic database | 21 |
| prescribed in
Section 25 if the State has not provided such | 22 |
| electronic
database; and
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| (ii) approved by municipal and county associations or | 24 |
| leagues of the State
whose responsibility it would | 25 |
| otherwise be to provide such database prescribed
by | 26 |
| Sections 116 through 126 of Title 4 of the United States | 27 |
| Code.
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| "Enhanced zip code" means a United States postal zip code | 29 |
| of 9 or more
digits.
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| "Home service provider" means the facilities-based carrier | 31 |
| or reseller with
which the customer contracts for the provision | 32 |
| of mobile telecommunications
services.
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| "Licensed service area" means the geographic area in which | 34 |
| the home service
provider is authorized by law or contract to | 35 |
| provide commercial mobile radio
service to the customer.
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| "Mobile telecommunications service" means commercial |
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| mobile radio service, as
defined in Section 20.3 of Title 47 of | 2 |
| the Code of Federal Regulations as in
effect on June 1, 1999.
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| "Place of primary use" means the street address , including | 4 |
| the 9-digit enhanced United States postal zip code, | 5 |
| representative of where the
customer's use of the mobile | 6 |
| telecommunications service primarily occurs, which
must be:
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| (i) the residential street address or the primary | 8 |
| business street address
of the customer; and
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| (ii) within the licensed service area of the home | 10 |
| service provider.
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| "Prepaid telephone calling services" means the right to | 12 |
| purchase exclusively
telecommunications services that must be | 13 |
| paid for in advance that enables the
origination of calls using | 14 |
| an access number, authorization code, or both,
whether manually | 15 |
| or electronically dialed, if the remaining amount of units of
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| service that have been prepaid is known by the provider of the | 17 |
| prepaid service
on a continuous basis.
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| "Reseller" means a provider who purchases | 19 |
| telecommunications services from
another telecommunications | 20 |
| service provider and then resells, uses as a
component part of, | 21 |
| or integrates the purchased services into a mobile
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| telecommunications service. "Reseller" does not include a | 23 |
| serving carrier with
which a home service provider arranges for | 24 |
| the services to its customers
outside the home service | 25 |
| provider's licensed service area.
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| "Serving carrier" means a facilities-based carrier | 27 |
| providing mobile
telecommunications service to a customer | 28 |
| outside a home service provider's or
reseller's licensed | 29 |
| service area.
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| "Taxing jurisdiction" means any of the several states, the | 31 |
| District of
Columbia, or any territory or possession of the | 32 |
| United States, any
municipality, city, county, township, | 33 |
| parish, transportation district, or
assessment jurisdiction, | 34 |
| or any other political subdivision within the
territorial | 35 |
| limits of the United States with the authority to impose a tax,
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| charge, or fee.
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| (Source: P.A. 92-474, eff. 8-1-02.)
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| Section 99. Effective date. This Act takes effect upon | 3 |
| becoming law.
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