New York Advisory Opinion TSB-A-10(5)C/(24)S: Are roaming charges for foreign carriers' customers (with a place of primary use outside New York) subject to New York sales or telecom excise tax?

Plain-English summary

A facilities-based mobile carrier provided roaming service in its US coverage areas to subscribers of foreign mobile carriers. The foreign carriers paid the petitioner and then billed their own customers. The petitioner asked whether those roaming charges are subject to New York State and local sales taxes or the telecommunications excise tax.

The Department concluded they are not. Under the federal Mobile Telecommunications Sourcing Act (incorporated by Tax Law section 1111(l) for sales tax and mirrored in Tax Law section 186-e.1(a) for the excise tax), a charge billed by or for a mobile customer's home service provider is deemed provided by that home service provider and is sourced to the customer's "place of primary use" -- the customer's residential or primary business street address -- no matter where the call originates, terminates, or passes through. Here the foreign carriers are the customers' home service providers, the petitioner is only a "serving carrier," and the customers' places of primary use are all outside New York. Because the service is sourced outside New York, it is not subject to New York sales tax or the telecommunications excise tax. The Department did not need to reach the alternative sale-for-resale argument.

What this means for you

Wireless carriers and roaming partners

Roaming charges follow the customer's home address, not where the towers are. If the end customer's place of primary use is outside New York, New York gets no sales or excise tax even though the roaming physically happened here. The home service provider -- not the serving carrier -- is treated as the one providing the service.

Accountants and tax professionals

The sourcing rule is mechanical: identify the home service provider, then the customer's place of primary use, then tax (or don't) based on that address. The same definitions govern both the sales tax and the section 186-e excise tax.

Common questions

Q: Where is mobile/roaming service taxed in New York?
A: At the customer's "place of primary use" -- the residential or primary business street address -- regardless of where the service is used.

Q: Does New York tax roaming for out-of-state customers used inside New York?
A: No. If the customer's place of primary use is outside New York, the charge is sourced outside New York and is not taxed here.

Citations and references

• Tax Law § 1111(l) (Mobile Telecommunications Sourcing Act for sales tax; deemed provider and sourcing)
• Tax Law § 186-e.1(a) (identical sourcing for the telecommunications excise tax)
• Tax Law § 1101(b)(26) (place of primary use); Tax Law § 1101(b)(27) (home service provider; serving carrier; mobile telecommunications customer)
• 4 USC § 116 et seq. (federal Mobile Telecommunications Sourcing Act)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/corporation_ao_2010.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/multitax/a10_5c_24s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-10(5)C
Corporation Tax
TSB-A-10(24)S
Sales Tax
May 4, 2010

Office of Counsel
Advisory Opinion Unit

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. Z091116B

Petitioner name and address redacted, requests an Advisory Opinion about whether roaming
mobile telecommunications services provided to customers of foreign mobile telecommunications carriers
and billed to the customer by the foreign carrier are subject to New York State and local sales taxes or the
telecommunications excise tax.
We conclude that the services described by Petitioner are not subject to State and local sales taxes
and the telecommunications excise tax because they are provided to mobile telecommunications
customers with places of primary use outside New York State.
Facts
Petitioner is a facilities-based provider of mobile telecommunication services. It provides mobile
telecommunication services directly to its end-user subscribers, as well as to subscribers of other domestic
and foreign carriers who are “roaming” in Petitioner’s service areas. Petitioner has entered into
agreements with foreign mobile telecommunications carriers under which it supplies roaming services to
the foreign carriers’ customers while in the United States. These customers’ residential or business street
addresses are located outside New York State. Under these agreements, the foreign carriers pay
Petitioner for the roaming services. The foreign carriers, in turn, bill their customers for the roaming
services supplied by Petitioner.
Petitioner asks the following questions:
1. Are the roaming services excluded from New York State and local sales taxes and the
telecommunications excise tax under the federal Mobile Telecommunications Sourcing Act on the ground
that they are provided to a customer with a place of primary use outside New York State?
2. Alternatively, are the roaming services provided by Petitioner to customers of foreign mobile
telecommunications carriers excluded from New York State and local sales taxes and the
telecommunications excise tax as sales for resale?
Analysis
Petitioner’s sales of roaming services are not subject to State and local sales taxes or the
telecommunications excise tax because they are provided to mobile telecommunications customers with
places of primary use outside New York State. Tax Law section 1111(l), which incorporates the
provisions of the federal Mobile Telecommunications Sourcing Act (4 USC § 116, et seq.) for purposes
of New York State and local sales taxes, provides:

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TSB-A-10(5)C
Corporation Tax
TSB-A-10(24)S
Sales Tax
May 4, 2010

(3)(A) Any charge for a service or property billed by or for a mobile telecommunications
customer’s home service provider shall be deemed to be provided by such mobile
telecommunications customer’s home service provider.
(B) Charges for mobile telecommunications service that are provided or deemed to be
provided by a mobile telecommunications customer’s home service provider shall be sourced to
the taxing jurisdiction where the mobile telecommunications customer’s place of primary use is
located, regardless of where the mobile telecommunications service originates, terminates or
passes through.
Tax Law section 186-e.1(a) contains identical provisions covering the telecommunications excise tax.
A “home service provider” is a facilities-based carrier or reseller, with which the mobile
telecommunications customer contracts for the provision of mobile telecommunications service. See Tax
Law § 1101(b)(27)(ii).
A “serving carrier” is “a facilities-based carrier providing mobile
telecommunications service to a mobile telecommunications customer outside the home service
provider’s or reseller’s licensed service area.” See Tax Law § 1101(b)(27)(v).
“Mobile telecommunications customer” means either:
(A) a person or entity that contracts with a home service provider for mobile
telecommunications services; or (B) if the end user of mobile telecommunications services is not
the contracting party, the end user of the mobile telecommunications service, but this clause (B)
applies only for the purpose of determining the place of primary use.
“Mobile
telecommunications customer” does not include either (a) a reseller of mobile
telecommunications service; or (b) a serving carrier under an arrangement to serve a mobile
telecommunications customer outside the home service provider’s licensed service area.
See Tax Law § 1101(b)(27)(i). “Place of primary use” means:
[T]he street address representative of where a mobile telecommunications customer’s use of the
mobile telecommunication service primarily occurs, and must be
(i) the residential street address or the primary business street address of the mobile
telecommunications customer and
(ii) within the licensed service area of the home service provider.
Tax Law § 1101(b)(26). All of the above definitions also apply to the telecommunications excise tax.
See Tax Law § 186-e.1(h).
The foreign carriers’ customers are “mobile telecommunications customers” as defined by Tax
Law section 1101(b)(27)(i), because they are the end users of the service provided by Petitioner. The
foreign carriers, not Petitioner, are the mobile telecommunications customers’ home service providers.
Petitioner, as a serving carrier, provides service to the mobile telecommunications customers under an
agreement with the home service provider, for which the customers are billed by their home service
provider. Because Petitioner’s roaming services are billed to the customer by the home service provider,

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TSB-A-10(5)C
Corporation Tax
TSB-A-10(24)S
Sales Tax
May 4, 2010

they are deemed to be provided by the home service provider. See Tax Law § 1111(l)(3)(A).
Accordingly, these services must be sourced to the taxing jurisdiction in which the mobile
telecommunications customers’ places of primary use are located. See Tax Law § 1111(l)(3)(B).
Because the customers’ places of primary use (i.e., their residential or business street addresses) are not
located in New York State, the service is not sourced within the State and is not subject to State or local
sales taxes or the telecommunications excise tax.
Petitioner also asks whether its sales of roaming services described above are exempt from the
sales and telecommunications excise taxes as sales for resale. Under the definition of “mobile
telecommunications customer” in Tax Law section 1101(b)(27)(i), the end user is deemed to be the
customer for purposes of determining the place of primary use. Under the facts presented, the end users
are the foreign carrier’s customers, whose residential or business street addresses are all outside of
New York State. Thus, because the sales by Petitioner to the foreign carrier would all be sourced outside
the state, and therefore not subject to New York sales and excise taxes, it is not necessary to address
whether these sales are exempt sales for resale.

DATED: May 4, 2010

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel
An Advisory Opinion is issued at the request of a person or entity. It is limited to
the facts set forth therein and is binding on the Department only with respect to
the person or entity to whom it is issued and only if the person or entity fully and
accurately describes all relevant facts. An Advisory Opinion is based on the law,
regulations, and Department policies in effect as of the date the Opinion is issued
or for the specific time period at issue in the Opinion.