Levy of tax; procedure for collecting tax.

(a) There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as provided herein, a privilege or license tax against every home service provider doing business in the State of Alabama on account of the furnishing of mobile telecommunications service to a customer with a place of primary use in the State of Alabama by said home service provider. The amount of the tax shall be determined by the application of the rates against gross sales or gross receipts, as the case may be, from the monthly charges from the furnishing of mobile telecommunications service to a customer with a place of primary use in the State of Alabama and shall be computed monthly with respect to each person to whom services are furnished at the rate of four percent on bills dated prior to February 1, 2002, and at the rate of six percent on bills dated on or after February 1, 2002, regardless of when the services being billed were provided. The home service provider furnishing such mobile telecommunications services shall be entitled to deduct and retain from the gross amount of tax billed by the home service provider nine-tenths of one percent of the amount of such tax billed on or after February 1, 2002, in consideration of the costs incurred by the home service provider in collecting and remitting the tax levied by this article; provided, however, that on and following October 1, 2002, the amount deducted and retained by such provider shall be one-fourth of one percent of the gross amount of such tax billed.

(b) Every home service provider subject to the tax herein levied in subsection (a) shall add to the price or charge for such services and collect from every customer thereof an amount equal to the prescribed percentage of gross price or gross charge therefor. It shall be unlawful for any home service provider to fail or refuse to collect from the customer the amount required by this section to be collected, to refund or offer to refund all or any part of the amount collected, or to absorb or advertise directly or indirectly the absorption or refund of the amount or any portion thereof. The provisions of this subsection that the tax herein levied shall be collected from the customer shall in no way relieve any home service provider of the tax herein levied. Nor shall the inability, impracticality, refusal, or failure so to collect from such customer the amounts provided herein relieve such provider of the tax herein levied. All taxes paid in pursuance of this section shall be conclusively presumed to be a direct tax on the customer precollected for the purpose of convenience and facility only.

(c) Monthly charges for mobile telecommunications service provided to a customer and billed by or for the customer's home service provider are deemed to be provided at the customer's place of primary use. Such monthly charges are subject to the tax imposed by this chapter if the customer's place of primary use is located in this state.

(d) If nontaxable charges for mobile telecommunications service are aggregated with and not separately stated from charges that are subject to taxation, then the charges for nontaxable mobile telecommunications service may be subject to taxation unless the home service provider can reasonably identify charges not subject to taxation from its books and records that are kept in the regular course of business.

(e) If charges for mobile telecommunications service are not subject to taxation, a customer may not rely upon the nontaxability of charges for mobile telecommunications service unless the customer's home service provider separately states the charges for nontaxable mobile telecommunications service from taxable charges or the home service provider elects, after receiving a written request from the customer in the form required by the provider, to provide verifiable data based upon the home service provider's books and records that are kept in the regular course of business that reasonably identifies the nontaxable charges.

(f)(1) A home service provider is to be held harmless from any tax, charge, or fee liability in this state that otherwise would be due solely as a result of an assignment of a street address to an incorrect taxing jurisdiction if, subject to subsection (i), the home service provider employs an enhanced zip code to assign each street address to a specific taxing jurisdiction for each level of taxing jurisdiction and exercises due diligence at each level of taxing jurisdiction to ensure that each street address is assigned to the correct taxing jurisdiction. If an enhanced zip code overlaps boundaries of taxing jurisdictions of the same level, the home service provider must designate one specific jurisdiction within the enhanced zip code for use in taxing the activity for the enhanced zip code for each level of taxing jurisdiction. Any enhanced zip code assignment changed in accordance with subsection (i) is in compliance with this subsection. For purposes of this subsection, there is a rebuttable presumption that a home service provider has exercised due diligence if the home service provider demonstrates that it has all of the following:

a. Expended reasonable resources to implement and maintain an appropriately detailed electronic database of street address assignments to taxing jurisdictions.

b. Implemented and maintained reasonable internal controls to promptly correct misassignments of street addresses to taxing jurisdictions.

c. Used all reasonably obtainable and usable data pertaining to municipal annexations, incorporations, reorganizations, and any other changes in jurisdictional boundaries that materially affect the accuracy of the database.

(2)a. The department may elect to provide an electronic database that satisfies the requirements of 4 U.S.C. § 119. If the department provides such database, a home service provider using the data contained in such database shall be held harmless from any liability, including tax, interest, and penalties, which would otherwise be due solely as a result of an assignment of a place of primary use to an incorrect local jurisdiction.

b. Paragraph a. shall apply to a home service provider who is in compliance with the terms of such subdivision until the later of (i) 18 months after the approval described in 4 U.S.C. § 119(a), or (ii) 6 months after the department provides an electronic database that satisfies the requirements of 4 U.S.C. § 119.

(g) A home service provider is responsible for obtaining and maintaining the customer's place of primary use. Subject to subsection (i) and if the home service provider's reliance on information provided by its customer is in good faith, a taxing jurisdiction shall allow a home service provider to rely on the applicable residential or business street address supplied by the home service provider's customer and not hold a home service provider 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.

(h) Except as provided in subsection (i), a taxing jurisdiction shall allow a home service provider to 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 the service contract or agreement, excluding any extension or renewal of the service contract or agreement, for purposes of determining the taxing jurisdictions to which taxes, charges, or fees on charges for mobile telecommunications service are remitted.

(i) A taxing jurisdiction or the state on behalf of any taxing jurisdiction may:

(1) Determine that the address used for purposes of determining the taxing jurisdictions to which taxes, charges, or fees for mobile telecommunications service are remitted does not meet the definition of place of primary use 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 if the taxing jurisdiction making the determination is not the state, the taxing jurisdiction obtains the consent of all affected taxing jurisdictions within this state before giving the notice of determination, and before the taxing jurisdiction gives the notice of determination, the customer is given an opportunity to demonstrate in accordance with applicable state or local tax, charge, or fee administrative procedures that the address is the customer's place of primary use.

(2) Determine that the assignment of a taxing jurisdiction by a home service provider under subdivision (1) 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 if the taxing jurisdiction making the determination is not the state, the taxing jurisdiction obtains the consent of all affected taxing jurisdictions within the state before giving the notice of determination, and the home service provider is given an opportunity to demonstrate in accordance with applicable state or local tax, charge, or fee administrative procedures that the assignment reflects the correct taxing jurisdiction.

(j) Nothing in this section modifies, impairs, supersedes, or authorizes the modification, impairment, or supersession of any law allowing a taxing jurisdiction to collect a tax, charge, or fee from a customer that has failed to provide its place of primary use.

(k) If a customer believes that an amount of tax, charge, or fee 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 customer shall include in this written notification the street address for the customer's place of primary use, the account name and number for which a customer seeks a correction, 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 60 days of receiving a notice under this section, the home service provider shall review its records 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 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, and/or fees erroneously collected by the home service provider, and no cause of action based upon a dispute arising from such taxes, charges, or fees shall accrue until a customer has reasonably exercised the rights and procedures set forth in this section.

(Acts 1990, No. 90-97, p. 104, §2(a), (b); Acts 1992, No. 92-623, p. 1466, §12; Act 99-399, p. 663, §1; Act 2001-1090, 4th Sp. Sess., p. 1120, §1.)