Approved Resolution, Changes to the Model City Tax Code:"2014-2018 Legislative Actions Amendment"
Article IV - Privilege Taxes
Sec. ___-470. Telecommunication services.
(a) The tax rate shall be at an amount equal to _______ percent (___%) of the gross income from the business activity upon every person engaging or continuing in the business of providing telecommunication services to consumers within this City.
(1) Telecommunication services shall include:
(A) two-way voice, sound, and/or video communication over a communications channel.
(B) one-way voice, sound, and/or video transmission or relay over a communications channel.
(C) facsimile transmissions.
(D) providing relay or repeater service.
(E) providing computer interface services over a communications channel.
(F) time-sharing activities with a computer accomplished through the use of a communications channel.
(2) Gross income from the business activity of providing telecommunication services to consumers within this City shall include:
(A) all fees for connection to a telecommunication system.
(B) toll charges, charges for transmissions, and charges for other telecommunications services; provided that such charges relate to transmissions originating in the City and terminating in this State.
(C) fees charged for access to or subscription to or membership in a telecommunication system or network.
(D) charges for telephone, fax or Internet access services provided at an additional charge by a hotel business subject to taxation under Section ___-444.
(b) Resale telecommunication services. Gross income from sales of telecommunication services to another provider of telecommunication services for the purpose of providing the purchaser's customers with such service shall be exempt from the tax imposed by this Section; provided, however, that such purchaser is properly licensed by the City to engage in such business.
(c) Interstate transmissions. Charges by a provider of telecommunication services for transmissions originating in the City and terminating outside the State are exempt from the tax imposed by this Section.
(d) Tax credit offset for franchise fees. There shall be allowed as an offset, up to the amount of tax due, any amounts paid to the City for license fees or franchise fees, but such offset shall not be allowed against taxes imposed by any other Section of this Chapter. Such offset shall not be deemed in conflict with or violation of subsection ___-400(b).
**(Model Option #11:
(d) (Reserved))**
(e) (Reserved)
++(Local Option #DD:
(e) However, gross income from the providing of telecommunication services by a cable television system, as such system is defined in A.R.S. Section 9-505, shall be exempt from the tax imposed by this Section.)++
(f) Prepaid calling cards. Telecommunications services purchased with a prepaid calling card that are taxable under Section ___-460 are exempt from the tax imposed under this Section.
(g) Internet access services. The gross income subject to tax under this Section shall not include sales of internet access services to the person's subscribers and customers. For the purposes of this subsection:
(1) "Internet" means the computer and telecommunications facilities that comprise the interconnected worldwide network of networks that employ the transmission control protocol or internet protocol, or any predecessor or successor protocol, to communicate information of all kinds by wire or radio.
(2) "Internet Access" means a service that enables users to access content, information, electronic mail or other services over the internet. Internet access does not include telecommunication services provided by a common carrier.
(H) ALARM MONITORING SERVICES. THE GROSS INCOME SUBJECT TO TAX UNDER THIS SECTION SHALL NOT INCLUDE SALES OF MONITORING SERVICES RELATING TO AN ALARM SYSTEM AS DEFINED IN A.R.S. SECTION 32-101.