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O-2003-4
AN ORDINANCE
AMENDING SECTIONS 3.01.020, 3.01.120, 3.01.180, AND 3.01.250 OF CHAPTER 3.01 AND SECTION 3.01.120 OF RULES AND REGULATIONS AND SPECIAL REGULATIONS OF THE LAKEWOOD MUNICIPAL CODE RELATING TO SALES AND USE TAX
WHEREAS, the City Council of the City of Lakewood, Colorado previously has adopted Chapter 3.01 of the Lakewood Municipal Code relating to sales and use tax; and
WHEREAS, in July, 2000, the United States Congress enacted the Mobile Telecommunications Sourcing Act (hereinafter "MTSA"), 4 U.S.C., Sections 116 to 126, to establish sourcing requirements for state and local taxation of mobile telecommunications services; and
WHEREAS, the MTSA provides that taxes on mobile telecommunications services are to be collected and remitted to the jurisdiction where the customer's primary use of said services occurs, regardless of where the mobile telecommunication services originate, pass through, or terminate; and
WHEREAS, pursuant to House Bill 02-1208, the Colorado General Assembly enacted legislation to conform state sales and use tax laws to the MTSA and to require local taxing jurisdictions to do the same where such jurisdictions impose a sales tax on mobile telecommunications services; and
WHEREAS, because the City currently imposes a sales tax on telecommunications and mobile telecommunications services, it is necessary to amend Chapter 3.01 and the corresponding Rules and Regulations to comply with the MTSA and state law.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Lakewood, Colorado that:
SECTION 1. Section 3.01.020, Definitions, of the City of Lakewood Municipal Code, is hereby amended by adding, in alphabetical order, new definitions to read as follows:
"Commercial Mobile Radio Service" or "Mobile Telecommunications Service" means a mobile service that is: (a)(1) provided for profit, i.e., with the intent of receiving compensation or monetary gain; (2) an interconnected service; and (3) available to the public, or to such classes of eligible users as to be effectively available to a substantial portion of the public; or (b) the functional equivalent of such a mobile service described in paragraph (a). (Reference Section 20.3 of Title 47 of the Code of Federal Regulations)
"Customer" means the person or entity that contracts with the home service provider for mobile telecommunications services, or if the end user of the mobile telecommunications services is not the contracting party, the end user of the mobile telecommunications service. The term "customer" does not include a reseller of mobile telecommunications service or a serving carrier under an arrangement to serve the customer outside the home service provider's licensed service area. (Reference 4 U.S.C. Section 128(2))
"Enhanced Zip Code" means a United States postal zip code of 9 or more digits. (Reference 4 U.S.C. Section 128(4))
"Home Service Provider" means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications service. (Reference 4 U.S.C. Section 128(5))
"Interconnected Service" means a service (a) that is interconnected with the public switched network, or interconnected with the public switched network through an interconnected service provider, that gives subscribers the capability to communicate to or receive communication from all other users on the public switched network; or (b) for which a request for such interconnection is pending pursuant to section 332 (c)(1)(B) of the Federal Communication Act, 47 U.S.C 332(c)(1)(B). A mobile service offers interconnected service even if the service allows subscribers to access the public switched network only during specified hours of the day, or if the service provides general access to points on the public switched network but also restricts access in certain limited ways. Interconnected services do not include any interface between a licensee's facilities and the public switched network exclusively for a licensee's internal control purposes. (Reference Section 20.3 of Title 47 of the Code of Federal Regulations)
"Mobile Service" means a radio communication service carried on between mobile stations or receivers and land stations, and by mobile stations communicating among themselves, and includes: (a) both one-way and two-way radio communications services; (b) a mobile service which provides a regularly interacting group of base, mobile, portable, and associated control and relay stations (whether licensed on an individual, cooperative, or multiple basis) for private one-way or two-way land mobile radio communications by eligible users over designated areas of operation; and (c) any service for which a license is required in a personal communications service under Section 20.3 of Title 47 of the Code of Federal Regulations. (Reference Section 20.3 of Title 47 of the Code of Federal Regulations)
"Place of Primary Use" means the street address representative of where the customer's use of the mobile telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer and within the licensed service area of the Home Service Provider. (Reference 4 U.S.C. Section 124(8))
SECTION 2. Subsection (C)(1) of Section 3.01.120, Property and Services Taxed, of the Lakewood Municipal Code is hereby amended to read as follows:
C.1. Upon telecommunication services, including access services sold by local telephone exchange companies to providers of telecommunication services for use in providing such services, whether furnished by public or private corporations or enterprises, for all intrastate telecommunication services originating from or received on telecommunication equipment in the city if the charge for the service is billed to a person in the city or billed to an affiliate or division of such person in the city on behalf of a person in the city.
a. Mobile Telecommunications. On or after August 1, 2002, mobile telecommunications service shall be subject to the tax imposed by this Section only if the service is provided to a customer whose place of primary use is within the City and the service originates and terminates within the City. (Reference 4 U.S.C. Sections. 116 to 126)
SECTION 3. Section 3.01.180, Exemptions, of the Lakewood Municipal Code is hereby amended by adding a new subsection 35 to read as follows:
35. In accordance with the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sections 116 to 126, as amended, on or after August 1, 2002, mobile telecommunications service provided to a customer whose place of primary use is outside the boundaries of the City.
SECTION 4. Subsection (E) of Section 3.01.250, Refunds, of the Lakewood Municipal Code is hereby amended by renumbering the existing subsection "(E)" as "(E)(1)" and by adding a new sub-subsection (E)(2) to read as follows:
E.2. In accordance with the Mobile Telecommunications Sourcing Act, all refunds
for charges of mobile telecommunications service shall be made in accordance
with the City's Rules and Regulations adopted in conformity with this chapter.
SECTION 5. Regulation 3.01.120(3)(a) of the Sales and Use Tax Rules and Regulations
as part of the Sales and Use Tax Ordinance of the Lakewood Municipal Code is
hereby amended by renumbering the existing subsection "(3)(a)" as
"(C)(1)" and by adding subsections (C)(2); (C)(3); (C)(4); (C)(5);
and (C)(6) to read as follows:
C.2. Treatment of Charges for Mobile Telecommunications Services.
a. In accordance with 4 U.S.C. Secs. 116 to 126 of the Mobile Telecommunications Sourcing Act, the City may only impose a sales tax on Mobile Telecommunications service taxable within the geographical boundaries of the City if the customer's Place of Primary Use is within the geographical boundaries of the City.
b. Any customer that believes a tax, charge, or fee assessed by the City in the customer's bill for Mobile Telecommunications Services is erroneous, or that an assignment of Place of Primary Use or taxing jurisdiction on said bill is incorrect, shall notify the Home Service Provider in writing within two years after the date the bill was issued. The notification from the customer 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 alleged error, and any other information that the Home Service Provider may require. No later than sixty days after receipt of notice from a customer, the Home Service Provider shall review the information submitted by the customer and any other relevant information and documentation to determine whether an error was made. If the Home Service Provider determines that an error was made, the Home Service Provider shall refund or credit to the customer any tax, fee, or charge erroneously collected from the customer for a period not to exceed two years. If the Home Service Provider determines that no error was made, the Home Service Provider shall provide a written explanation of its determination to the customer.
c. Any customer that believes that a tax, charge, or fee assessed by the City in the customer's bill for Mobile Telecommunications services is erroneous, or that an assignment of Place of Primary Use or taxing jurisdiction on said bill is incorrect may file a claim in the appropriate district court only after complying with the provisions of this Regulation 3.01.120(C)(2).
C.3. Electronic Database.
a. The State may provide an electronic database to a Home Service Provider or, if the State does not provide such an electronic database to a Home Service Provider, then the designated database provider may provide an electronic database to a Home Service Provider.
b. Such electronic database, whether provided by the State or the designated database provider, shall be provided in a format approved by the American National Standards Institute's Accredited Standards Committee X12, that, allowing for de minimis deviations, designates for each street address in the State, including to the extent practicable, any multiple postal street addresses applicable to one street location, the appropriate taxing jurisdictions, and the appropriate code for each taxing jurisdiction, for each level of taxing jurisdiction, identified by one nationwide standard numeric code.
i. Such electronic database shall also provide the appropriate code for each street address with respect to political subdivisions, which are not taxing jurisdictions when reasonably needed to determine the property-taxing jurisdiction.
ii. The nationwide standard numeric codes shall contain the same number of numeric digits with each digit or combination of digits referring to the same level of taxing jurisdiction throughout the United States using a format similar to FIPS 55-3 or other appropriate standard approved by the Federation of Tax Administrators and the Multistate Tax Commission or their successors. Each address shall be provided in standard postal format.
iii. The State or designated database provider that provides or maintains an electronic database described in subsection (i) shall provide notice of the availability of the then current electronic database, and any subsequent revisions thereof, by publication in the manner normally employed for the publication of informational tax, charge, or fee notices to taxpayers.
C.4. User Held Harmless.
A Home Service Provider using the data contained in an electronic database described in section 3(b) above shall be held harmless from any tax, charge, or fee liability that otherwise would be due solely as a result of any error or omission in such database provided by the State or designated database provider. The Home Service Provider shall reflect changes made to such database during a calendar quarter not later than 30 days after the end of such calendar quarter for each State that issues notice of the availability of an electronic database reflecting such changes.
C.5. Safe Harbor.
a. If neither the State nor designated database provider provides an electronic database, a Home Service Provider shall be held harmless from any tax, charge, or fee liability in the State that otherwise would be due solely as a result of an assignment of a street address to an incorrect taxing jurisdiction if, 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 such 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 such enhanced zip code for use in taxing the activity for such enhanced zip code for each level of taxing jurisdiction. Any enhanced zip code assignment changed in accordance with section 121 of the Mobile Telecommunications Sourcing Act is deemed to be in compliance with this section. For purposes of this section, there is a rebuttable presumption that a Home Service Provider has exercised due diligence if such Home Service Provider demonstrates that it has: (1) expended reasonable resources to implement and maintained an appropriately detailed electronic database of street address assignments to taxing jurisdictions; (2) implemented and maintained reasonable internal controls to promptly correct misassignments of street addresses to taxing jurisdictions; and (3) used all reasonably obtainable and usable data pertaining to municipal annexations, incorporation, reorganizations and any other changes in jurisdictional boundaries that materially affect the accuracy of such database.
C.6. Correction of Erroneous Data for Place of Primary Use.
The City or State on behalf of the City, may:
a. determine that the address used for purposes of determining the taxing jurisdictions to which taxes, charges or fees for mobile telecommunications services are remitted does not meet the definition of Place of Primary Use and give 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: (a) the City obtains the consent of all affected taxing jurisdictions within the State before giving such notice of determination, and (b) before the City gives such 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;
b. determine that the assignment of a taxing jurisdiction by a Home Service Provider 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: (a) the City obtains the consent of all affected taxing jurisdictions within the State before giving such notice of determination; and (b) 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.
SECTION 6. Effective date. This ordinance shall take effect thirty (30) days after final publication.
I hereby attest and certify that the within and foregoing ordinance was introduced and read on first reading at a regular meeting of the Lakewood City Council on the 27th day of January, 2003, published in full in the Lakewood Sentinel on the 30th day of January, 2003; set for public hearing on the 10th day of February, 2003; and signed and approved by the Mayor on the 11th day of February, 2003.
Stephen A. Burkholder, Mayor
ATTEST:
Margy Greer, City Clerk
Approved as to form:
City Attorney
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