BILL REQ. #:  S-0766.1 

Read first time 01/21/11.   Referred to Committee on Environment, Water & Energy.

     AN ACT Relating to the taxation of prepaid wireless telecommunications service; amending RCW 82.14B.030; reenacting and amending RCW 82.14B.020; adding a new chapter to Title 82 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 82.14B.020 and 2010 1st sp.s. c 19 s 2 are each reenacted and amended to read as follows:
     As used in this chapter:
     (1) "Emergency services communication system" means a multicounty or countywide communications network, including an enhanced 911 emergency communications system, which provides rapid public access for coordinated dispatching of services, personnel, equipment, and facilities for police, fire, medical, or other emergency services.
     (2) "Enhanced 911 emergency communications system" means a public communications system consisting of a network, database, and on-premises equipment that is accessed by dialing or accessing 911 and that enables reporting police, fire, medical, or other emergency situations to a public safety answering point. The system includes the capability to selectively route incoming 911 voice or data to the appropriate public safety answering point that operates in a defined 911 service area and the capability to automatically display the name, address, and telephone number of incoming 911 voice or data at the appropriate public safety answering point. "Enhanced 911 emergency communications system" includes the modernization to next generation 911 systems.
     (3) "Interconnected voice over internet protocol service" has the same meaning as provided by the federal communications commission in 47 C.F.R. Sec. 9.3 on January 1, 2009, or a subsequent date determined by the department.
     (4) "Interconnected voice over internet protocol service line" means an interconnected voice over internet protocol service that offers an active telephone number or successor dialing protocol assigned by a voice over internet protocol provider to a voice over internet protocol service customer that has inbound and outbound calling capability, which can directly access a public safety answering point when such a voice over internet protocol service customer has a place of primary use in the state.
     (5) "Local exchange company" has the meaning ascribed to it in RCW 80.04.010.
     (6) "Place of primary use" means the street address representative of where the subscriber's use of the radio access line or interconnected voice over internet protocol service line occurs, which must be:
     (a) The residential street address or primary business street address of the subscriber; and
     (b) In the case of radio access lines, within the licensed service area of the home service provider.
     (7) "Prepaid wireless telecommunications service" has the same meaning as provided for "prepaid wireless calling service" in RCW 82.04.065.
     (8) "Private telecommunications system" has the meaning ascribed to it in RCW 80.04.010.
     (((8))) (9) "Radio access line" means the telephone number assigned to or used by a subscriber for two-way local wireless voice service available to the public for hire from a radio communications service company. Radio access lines include, but are not limited to, radio-telephone communications lines used in cellular telephone service, personal communications services, and network radio access lines, or their functional and competitive equivalent. Radio access lines do not include lines that provide access to one-way signaling service, such as paging service, or to communications channels suitable only for data transmission, or to nonlocal radio access line service, such as wireless roaming service, or to a private telecommunications system.
     (((9))) (10) "Radio communications service company" has the meaning ascribed to it in RCW 80.04.010, except that it does not include radio paging providers. It does include those persons or entities that provide commercial mobile radio services, as defined by 47 U.S.C. Sec. 332(d)(1), and both facilities-based and nonfacilities-based resellers.
     (((10))) (11) "Subscriber" means the retail purchaser of telecommunications service, a competitive telephone service, or interconnected voice over internet protocol service.
     (((11))) (12) "Switched access line" means the telephone service line which connects a subscriber's main telephone(s) or equivalent main telephone(s) to the local exchange company's switching office.

Sec. 2   RCW 82.14B.030 and 2010 1st sp.s. c 19 s 3 are each amended to read as follows:
     (1) The legislative authority of a county may impose a county enhanced 911 excise tax on the use of switched access lines in an amount not exceeding seventy cents per month for each switched access line. The amount of tax must be uniform for each switched access line. Each county must provide notice of the tax to all local exchange companies serving in the county at least sixty days in advance of the date on which the first payment is due. The tax imposed under this subsection must be remitted to the department by local exchange companies on a tax return provided by the department. The tax must be deposited in the county enhanced 911 excise tax account as provided in RCW 82.14B.063.
     (2) The legislative authority of a county may also impose a county enhanced 911 excise tax on the use of radio access lines whose place of primary use is located within the county in an amount not exceeding seventy cents per month for each radio access line. The amount of tax must be uniform for each radio access line. The county must provide notice of the tax to all radio communications service companies serving in the county at least sixty days in advance of the date on which the first payment is due. The tax imposed under this section must be remitted to the department by radio communications service companies, including those companies that resell radio access lines, on a tax return provided by the department. The tax must be deposited in the county enhanced 911 excise tax account as provided in RCW 82.14B.063.
     (3)(a) The legislative authority of a county may impose a county enhanced 911 excise tax on the use of interconnected voice over internet protocol service lines in an amount not exceeding seventy cents per month for each interconnected voice over internet protocol service line. The amount of tax must be uniform for each line and must be levied on no more than the number of voice over internet protocol service lines on an account that are capable of simultaneous unrestricted outward calling to the public switched telephone network.
     (b) The interconnected voice over internet protocol service company must use the place of primary use of the subscriber to determine which county's enhanced 911 excise tax applies to the service provided to the subscriber.
     (c) The tax imposed under this section must be remitted to the department by interconnected voice over internet protocol service companies on a tax return provided by the department.
     (d) The tax must be deposited in the county enhanced 911 excise tax account as provided in RCW 82.14B.063.
     (e) To the extent that a local exchange carrier and an interconnected voice over internet protocol service company contractually jointly provide a single service line, only one service company is responsible for remitting the enhanced 911 excise taxes, and nothing in this section precludes service companies who jointly provide service from agreeing by contract which of them ((shall)) must remit the taxes collected.
     (4) Counties imposing a county enhanced 911 excise tax must provide an annual update to the enhanced 911 coordinator detailing the proportion of their county enhanced 911 excise tax that is being spent on:
     (a) Efforts to modernize their existing enhanced 911 communications system; and
     (b) Enhanced 911 operational costs.
     (5) A state enhanced 911 excise tax is imposed on all switched access lines in the state. The amount of tax may not exceed twenty- five cents per month for each switched access line. The tax must be uniform for each switched access line. The tax imposed under this subsection must be remitted to the department by local exchange companies on a tax return provided by the department. Tax proceeds must be deposited by the treasurer in the enhanced 911 account created in RCW 38.52.540.
     (6) A state enhanced 911 excise tax is imposed on all radio access lines whose place of primary use is located within the state in an amount of twenty-five cents per month for each radio access line. The tax must be uniform for each radio access line. The tax imposed under this section must be remitted to the department by radio communications service companies, including those companies that resell radio access lines, on a tax return provided by the department. Tax proceeds must be deposited by the treasurer in the enhanced 911 account created in RCW 38.52.540. The tax imposed under this section is not subject to the state sales and use tax or any local tax.
     (7) A state enhanced 911 excise tax is imposed on all interconnected voice over internet protocol service lines in the state. The amount of tax may not exceed twenty-five cents per month for each interconnected voice over internet protocol service line whose place of primary use is located in the state. The amount of tax must be uniform for each line and must be levied on no more than the number of voice over internet protocol service lines on an account that are capable of simultaneous unrestricted outward calling to the public switched telephone network. The tax imposed under this subsection must be remitted to the department by interconnected voice over internet protocol service companies on a tax return provided by the department. Tax proceeds must be deposited by the treasurer in the enhanced 911 account created in RCW 38.52.540.
     (8)(a) For calendar year 2011, the taxes imposed by subsections (5) and (7) of this section must be set at their maximum rate. By August 31, 2011, and by August 31st of each year thereafter, the state enhanced 911 coordinator must recommend the level for the next year of the state enhanced 911 excise tax imposed by subsections (5) and (7) of this section, based on a systematic cost and revenue analysis, to the utilities and transportation commission. The commission must by the following October 31st determine the level of the state enhanced 911 excise taxes imposed by subsections (5) and (7) of this section for the following year.
     (b) Beginning in calendar year 2012, the systematic cost and revenue analysis includes the proceeds of revenues from the tax imposed by chapter 82.--- RCW (the new chapter created in section 8 of this act).
     (9) The excise tax imposed by this section does not apply to prepaid wireless telecommunications service, which is subject to the tax imposed under chapter 82.--- RCW (the new chapter created in section 8 of this act).

NEW SECTION.  Sec. 3   The following definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Consumer" means a person who purchases prepaid wireless telecommunications service in a retail transaction.
     (2) "Prepaid wireless enhanced 911 excise tax" means the tax that is required to be collected by a seller from a consumer under this chapter.
     (3) "Prepaid wireless telecommunications service" has the same meaning as "prepaid wireless calling service" as provided in RCW 82.04.065.
     (4) "Provider" means a person that provides prepaid wireless telecommunications service pursuant to a license issued by the federal communications commission.
     (5) "Retail transaction" means the purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale.
     (6) "Seller" means a person who sells prepaid wireless telecommunications service to another person.

NEW SECTION.  Sec. 4   (1) There is imposed a prepaid wireless enhanced 911 excise tax of two and one-half percent of the sales price on each retail transaction.
     (2)(a) The prepaid wireless enhanced 911 excise tax must be collected by the seller from the consumer with respect to each retail transaction occurring in this state. The amount of the prepaid wireless enhanced 911 excise tax must be either separately stated on an invoice, receipt, or other similar document that is provided to the consumer by the seller, or otherwise disclosed to the consumer.
     (b) For purposes of this subsection, the transaction occurs in this state if it is sourced to this state under the provisions of RCW 82.32.520(3)(c).
     (3) The prepaid wireless enhanced 911 excise tax is the liability of the consumer and not of the seller or of any provider, except that the seller is liable to remit all prepaid wireless enhanced 911 excise taxes that the seller collects from consumers as provided in section 5 of this act, including all such excise taxes that the seller is deemed to collect where the amount of the tax has not been separately stated on an invoice, receipt, or other similar document provided to the consumer by the seller.
     (4) The amount of the prepaid wireless enhanced 911 excise tax that is collected by a seller from a consumer, if such amount is separately stated on an invoice, receipt, or other similar document provided to the consumer by the seller, may not be included in the base for measuring any tax, fee, surcharge, or other charge that is imposed by this state, any political subdivision of this state, or any intergovernmental agency.
     (5) When prepaid wireless telecommunications service is sold with one or more other products or services for a single, nonitemized price, then the tax under this chapter is imposed on the entire nonitemized price unless the seller elects to impose the tax on:
     (a) A dollar amount, if the amount of the prepaid wireless telecommunications service is disclosed to the consumer as a dollar amount; or
     (b) The portion of the price that is attributable to the prepaid wireless telecommunications service by reasonable and verifiable standards from its books and records that are kept in the regular course of business for other purposes including, but not limited to, nontax purposes, if the seller can identify such portion.
     (6) If a minimal amount of prepaid wireless telecommunications service is sold with a prepaid wireless device for a single, nonitemized price, then the seller may elect not to impose the tax under this chapter on such sale. For purposes of this subsection, "minimal" means an amount of service denominated as ten minutes or less, or five dollars or less.

NEW SECTION.  Sec. 5   (1) Prepaid wireless enhanced 911 excise taxes collected by sellers under this chapter must be remitted to the department at the times and in the manner provided by chapter 82.08 RCW with respect to the sales tax imposed under chapter 82.08 RCW. The department must establish registration and payment procedures that substantially coincide with the registration and payment procedures that apply to the tax imposed under chapter 82.08 RCW.
     (2) A seller is permitted to deduct and retain two percent of prepaid wireless enhanced 911 excise taxes that are collected by the seller from consumers.
     (3) The audit and appeal procedures applicable to the retail sales tax imposed under chapter 82.08 RCW apply to prepaid wireless enhanced 911 excise taxes.
     (4) The department must establish procedures by which a seller of prepaid wireless telecommunications service may document that a sale is not a retail transaction, which procedures must substantially coincide with the procedures for documenting sale for resale transactions for purposes of the retail sales tax imposed under chapter 82.08 RCW.
     (5) The department must transfer all remitted prepaid wireless enhanced 911 excise taxes as directed by this chapter within thirty days of receipt. Funds must be distributed as follows:
     (a) Seventy-three and seven-tenths percent must be transferred to the county enhanced 911 excise tax account as provided in RCW 82.14B.063. Such funds must be distributed to counties in the same proportion as the distribution of funds under RCW 82.14B.063 as of October 1, 2011, and are subject to the provisions of RCW 82.14B.050; and
     (b) Twenty-six and three-tenths percent must be transferred to the enhanced 911 account created in RCW 38.52.540.

NEW SECTION.  Sec. 6   (1) A provider or seller of prepaid wireless telecommunications service is not liable for damages to any person resulting from or incurred in connection with the provision of, or failure to provide, 911 or enhanced 911 service, or for identifying, or failing to identify, the telephone number, address, location, or name associated with any person or device that is accessing or attempting to access 911 or enhanced 911 service.
     (2) A provider or seller of prepaid wireless telecommunications service is not liable for damages to any person resulting from or incurred in connection with the provision of any lawful assistance to any investigative or law enforcement officer of the United States, this or any other state, or any political subdivision of this or any other state, in connection with any lawful investigation or other law enforcement activity by such law enforcement officer.
     (3) In addition to the provisions of this chapter, a provider or seller of prepaid wireless telecommunications service is subject to the provisions of RCW 38.52.550.

NEW SECTION.  Sec. 7   The prepaid wireless enhanced 911 excise tax imposed by this chapter is the only enhanced 911 funding obligation imposed with respect to prepaid wireless telecommunications service in this state, and no other tax, fee, surcharge, or charge may be imposed by this state, any political subdivision of this state, or any intergovernmental agency, for enhanced 911 funding purposes, upon any provider, seller, or consumer with respect to the sale, purchase, use, or provision of prepaid wireless telecommunications service.

NEW SECTION.  Sec. 8   Sections 3 through 7 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION.  Sec. 9   This act takes effect October 1, 2011.