Did Florida communications services tax apply when a Florida serving carrier handled roaming for foreign-carrier customers?

Plain-English summary

The Florida Department of Revenue concluded that a mobile carrier's international roaming sales were not subject to Florida communications services tax when the end users' places of primary use were outside Florida.

The foreign carriers contracted with and billed their customers, making them the home service providers. The Florida taxpayer merely served those customers while they roamed in its service area. Under the federal sourcing rule and Florida law, the services were deemed provided by the home service provider and sourced to the jurisdiction containing each customer's place of primary use.

The conclusion depended on the customers' residential or primary business service addresses being outside Florida.

What this means for you

Mobile carriers

The physical location of a roaming call or data session did not control this ruling; home-provider status and the customer's place of primary use controlled sourcing.

Tax and billing teams

Maintain reliable service-address records and distinguish the home service provider from the serving carrier.

Common questions

Q: Was the Florida taxpayer the customers' home service provider?
A: No. It was the serving carrier under agreements with the foreign carriers.

Q: Did roaming in Florida by itself create Florida communications services tax?
A: No, where the customers' places of primary use were outside Florida.

Q: Where were the services sourced?
A: To the taxing jurisdiction containing each customer's place of primary use.

Citations and references

• Fla. Stat. §§ 202.11(7), (14), (17), and (19)-(23), 202.12(1)(d), 202.19, and 213.22
• Mobile Telecommunications Sourcing Act § 117, Pub. L. No. 106-252

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 15A19-001

Original ruling text

Executive Director
Marshall Stranburg

ISSUE: WHETHER REVENUE RELATED TO CHARGES FOR INTERNATIONAL
ROAMING MOBILE COMMUNICATIONS SERVICES FOR CUSTOMERS OF FOREIGN
CARRIERS IS SUBJECT TO CST.
RESPONSE: FLORIDA CST APPLIES TO THE SALES PRICE OF MOBILE
COMMUNICATIONS SERVICES PROVIDED TO A CUSTOMER BY A HOME SERVICE
PROVIDER PURSUANT TO S. 117(a) OF THE MTSA, IF SUCH CUSTOMER’S SERVICE
ADDRESS IS LOCATED WITHIN FLORIDA. IN THIS CASE, THE TAXPAYER IS NOT
THE “HOME SERVICE PROVIDER” FOR THE CUSTOMER. FURTHER, MOBILE
COMMUNICATIONS SERVICES DEEMED TO BE PROVIDED TO A “CUSTOMER” BY A
“HOME SERVICE PROVIDER” MUST BE SOURCED TO THE TAXING JURISDICTION
IN WHICH THE MOBILE COMMUNICATIONS SERVICES CUSTOMERS’ “PLACES OF
PRIMARY USE” ARE LOCATED. IF UNDER THE FACTS PRESENTED, THE
CUSTOMERS’ “PLACES OF PRIMARY USE,” SERVICE ADDRESSES, ARE NOT IN
FLORIDA, THEN SALES OF ROAMING MOBILE COMMUNICATIONS SERVICES TO
SUCH CUSTOMERS ARE NOT SUBJECT TO CST.
January 7, 2015
RE:

Technical Assistance Advisement –TAA 15A19-001
Communications Services Tax
XXXX (Taxpayer)
FEI #: XXXX
Chapter 202, Florida Statutes

Dear XXXX,
This is a response to your letter dated XXXX. You have requested a Technical Assistance
Advisement (TAA) regarding the Department’s position on whether Florida Communications
Services Tax (CST) applies to charges for roaming mobile communications services provided to
customers of other foreign carriers. The information provided with your letter established that you
meet the requirements for a TAA.
The TAA was requested by XXXX “on behalf of XXXX, along with related XXXX entities.” The
Taxpayer has provided a signed DR-835, Power of Attorney (POA) form for “XXXX and Affiliates
listed on Exhibit A,” which is attached to the POA. The POA lists the following XXXX related
entities to whom the TAA is requested to apply:

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Howard Moyes,Interim Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2
Entity
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX

FEI #
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX

ISSUE
Whether revenue related to charges for international roaming mobile communications services for
customers of foreign carriers is subject to CST.
FACTS
XXXX and related entities (Taxpayer) provide mobile communications services. In addition to
providing these services to its own customers, the Taxpayer has also entered into agreements
with foreign carriers. Under these agreements, the Taxpayer provides international roaming
services to customers of foreign carriers when the foreign carriers’ customers are “roaming” in
the Taxpayer’s service area. The agreements require that the Taxpayer charge the foreign carrier
for the roaming services and the foreign carrier, in turn, charges its customer for the roaming
services. The end-user customers roaming in Taxpayer's service area have residential or business
street addresses, “place of primary use,” that are located outside Florida.
The Taxpayer provided copies of “International Roaming Agreement[s] for GSM and/or 3GSM”
for various foreign carriers. Pertinent excerpts are taken from one of the contracts, as follows
below.
XXXX (XXXX) and XXXX (XXXX)
This contract, dated October 2002 and signed on January 27, 2004 and February 11, 2004,
provides, in part, the following:
The above mentioned parties agree to establish International Roaming between
each other, by operating GSM and or 3GSM digital cellular telecommunications
service on the terms and conditions as stated below.

Page 5 of the contract provides, in part,

Technical Assistance Advisement
Page 3

2. Introduction
   2.1 The Memorandum of Understanding on GSM provides for the establishment of
   International Roaming Services whereby a subscriber provided with Services in
   one country by one of the network operators can also gain access to the Services
   of any of the other network operators in their respective countries.

3. Definitions

3.2 “Roaming subscriber” shall mean a person or entity with valid subscription for
international use issued by one of the Parties and using a GSM SIM (Subscriber
Identity Module) and/or GSM USIM (Universal Subscriber Identity Module) who
seeks GSM and/or 3GSM service(s) in a geographic area outside the area served
by its HPMN Operator.

3.6 “HPMN Operator” shall mean a Party who is providing Services to its subscribers in
a geographic area where it holds a license or has a right to establish and operate a
GSM and/or 3GSM network.
3.7 “VPMN Operator” shall mean a Party who allows Roaming Subscribers to use its
GSM and/or 3GSM network(s).

3.12 “Services” shall mean the services for International GSM and/or International
3GSM Roaming as agreed upon by the Parties in AA.14 and may include: [The
next 2 paragraphs list various switched services provided]

8. Charging, Billing and Accounting

8.1.1 Both parties agree that when a Roaming Subscriber uses the Services of the VPMN
Operator, the Roaming Subscriber’s HPMN Operator shall be responsible for
payment of charges for the Services so used in accordance with the tariff of the
VPMN Operator stated in Annex I.3.1. (Emphasis added.)

Contracts and portions of contracts were provided between other XXXX entities and foreign
carriers such as XXXX, XXXX, XXXX, XXXX, XXXX, and others. These contracts indicate
that the parties agree to establish International Roaming between each other.
TAXPAYER POSITION
The Taxpayer states that the roaming services provided to the customers of the foreign carriers
are not subject to CST based on the definitions and sourcing provisions provided in Sections
202.11 and 202.12, F.S., and the Mobile Telecommunications Sourcing Act, Pub. L. No 106-252

Technical Assistance Advisement
Page 4
(MTSA). The Taxpayer first states that the customers’ “place of primary use” is located outside
Florida. Second, the Taxpayer opines that the MTSA, in Section 117(a), states that charges billed
by or for a mobile telecommunications customer’s home service provider shall be deemed to be
provided by such telecommunications customer’s home service provider. Florida law, in s.
202.12(1)(d), F.S., provides that charges for mobile communications service deemed to be
provided by a mobile communication customer’s home service provider are only subject to CST
if the customer’s service address, the “place of primary use,” is located in Florida.
The foreign customers’ “home service provider,” the foreign carrier, has contracted with the
customers to provide mobile communications services. It is therefore the “home service
provider’s” requirement to charge CST, and then, only when the customer’s service address is
located in Florida. Therefore, the Taxpayer’s charges to the foreign carrier are not subject to
CST.
LAW AND DISCUSSION
Section 202.11, F.S., defines the following terms applicable to the issue presented:

(7) “Mobile communications service” means commercial mobile radio service, as
defined in 47 C.F.R. s. 20.3 as in effect on June 1, 1999. The term does not
include air-ground radiotelephone service as defined in 47 C.F.R. s. 22.99 as in
effect on June 1, 1999.

(14) “Service address” means:

(c) In the case of mobile communications services, the customer’s place of
primary use. (Emphasis added.)

(17)(a) “Customer” means:

1. The person or entity that contracts with the home service provider for mobile
   communications services; or
2. If the end user of mobile communications services is not the contracting party,
   the end user of the mobile communications service. This subparagraph only
   applies for the purpose of determining the place of primary use.
   (b) “Customer” does not include:
3. A reseller of mobile communications services; or
4. A serving carrier under an agreement to serve the customer outside the home
   service provider's licensed service area.

Technical Assistance Advisement
Page 5
(19) “Home service provider” means the facilities-based carrier or reseller with
which the customer contracts for the provision of mobile communications
services.
(20) “Licensed service area” means the geographic area in which the home
service provider is authorized by law or contract to provide mobile
communications service to the customer.
(21) “Place of primary use” means the street address representative of where the
customer’s use of the mobile communications service primarily occurs, which
must be:
(a) The residential street address or the primary business street address of the
customer; and
(b) Within the licensed service area of the home service provider.
(22)(a) “Reseller” means a provider who purchases communications services
from another communications service provider and then resells, uses as a
component part of, or integrates the purchased services into a mobile
communications service.
(b) “Reseller” does not include a serving carrier with which a home service
provider arranges for the services to its customers outside the home service
provider’s licensed service area.
(23) “Serving carrier” means a facilities-based carrier providing mobile
communications service to a customer outside a home service provider’s or
reseller's licensed service area.

Section 202.12(1)(d), provides that CST applies to the sales price of mobile communications
services if the customer’s service address is located in Florida:
At the rate set forth in paragraph (a) applied to the sales price of all mobile
communications services deemed to be provided to a customer by a home service
provider pursuant to s. 117(a) of the Mobile Telecommunications Sourcing Act,
Pub. L. No. 106-252, if such customer’s service address is located within this
state.
Section 117, Mobile Telecommunications Sourcing Act, Public Law No. 106-252, provides,
(a) TREATMENT OF CHARGES FOR MOBILE TELECOMMUNICATIONS
SERVICES.—Notwithstanding the law of any State or political subdivision of
any State, mobile telecommunications services provided in a taxing jurisdiction
to a customer, the charges for which are billed by or for the customer’s home
service provider, shall be deemed to be provided by the customer’s home service
provider.

Technical Assistance Advisement
Page 6
(b) JURISDICTION.—All charges for mobile telecommunications services that
are deemed to be provided by the customer’s home service provider under
sections 116 through 126 of this title are authorized to be subjected to tax, charge,
or fee by the taxing jurisdictions whose territorial limits encompass the
customer’s place of primary use, regardless of where the mobile
telecommunication services originate, terminate, or pass through, and no other
taxing jurisdiction may impose taxes, charges, or fees on charges for such mobile
telecommunications services.
(Emphasis added.)

Pursuant to Sections 202.12(l)(d) and 202.19, F.S., Florida communications services tax and
local communications services tax apply to the sales price of all mobile communications services
deemed to be provided to a customer by a home service provider pursuant to s. 117(a) of the
MTSA, if such customer’s service address is located within Florida.
Pursuant to Florida law, a “home service provider” is “… the facilities-based carrier or reseller
with which the customer contracts for the provision of mobile communications services….” The
“customer” is the person/entity that contracts with the home service provider for mobile
communications services and/or is the end user of the mobile communications service. A
“customer” is not a reseller of mobile communications services or a “… serving carrier under an
agreement to serve the customer [end user] outside the home service provider’s licensed area.” A
“serving carrier” is the facilities-based carrier providing mobile communications service to a
customer outside a home service provider’s or reseller's licensed service area.
The Taxpayer, the serving carrier, provides mobile communications services to end users under
an agreement with the end users’ “home service provider” (a foreign carrier). The end users are
billed by their “home service provider.” Because the end users are billed by their “home service
provider,” the mobile communications services at issue are deemed to be provided by the “home
service provider,” rather than by Taxpayer. (Section 202.12(l)(d), F.S.; and Section 117(a) of the
MTSA .)
As provided in section 202.11(17)(a)2., F.S., because these end users are not the contracting
party with the Taxpayer, they are deemed to be the “customer(s)” receiving the mobile
communications services. Furthermore, pursuant to section 202.12(l)(d), F.S., mobile
communications services deemed to be provided to a “customer” by a “home service provider”
must be sourced to the taxing jurisdiction in which the mobile communications services
customers’ “places of primary use” are located.
If under the facts presented, the customers’ “places of primary use,” service addresses, are not in
Florida, then Taxpayer’s sales of roaming mobile communications services to such customers are
not subject to CST.

Technical Assistance Advisement
Page 7
CONCLUSION
Based upon the discussion above, Taxpayer's sales of roaming services are not subject to CST, if
the services are provided to mobile communications services customers whose “places of
primary use” are outside the State of Florida.
This response constitutes a Technical Assistance Advisement under section 213.22, F.S., which
is binding on the Department only under the facts and circumstances described in the request for
this advice as specified in section 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above. You are advised that subsequent statutory or administrative
rule changes, or judicial interpretations of the statutes or rules, upon which this advice is based,
may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of section 213.22, F.S. Confidential information must be deleted before public disclosure. In an
effort to protect confidentiality, we request you provide the undersigned with an edited copy of
your request for Technical Assistance Advisement, the backup material and this response,
deleting names, addresses and any other details which might lead to identification of the
taxpayer. Your response should be received by the Department within 15 days of the date of this
letter.
Should you have any questions, please feel free to contact me.
Sincerely,
Carla M. Bruce
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6315
Record ID: 165158