701—217.6(423) Sourcing telecommunication service.
	217.6(1) The general sourcing principles found in Iowa Code section 423.15 apply to telecommunication services and ancillary services unless the service falls under one of the exceptions set forth in subrule 224.6(2).
	217.6(2) Exceptions. The following telecommunication services and products are sourced as follows:
	a. 	Mobile telecommunication service is sourced to the place of primary use, unless the service is prepaid wireless calling service.
	b. 	The sale of prepaid calling service or prepaid wireless calling service is sourced as provided under Iowa Code section 423.15. However, in the case of prepaid wireless calling service, Iowa Code section 423.15(1)“e” shall include as an option the location associated with the mobile telephone number.
Example 1: An Iowa seller sells a prepaid wireless service airtime card to a consumer at an Iowa retail location. The sale of the prepaid wireless service will be sourced to Iowa.
Example 2: An Iowa resident purchases a prepaid wireless service airtime card at a Nebraska retail location. The sale of the prepaid wireless service will be sourced to Nebraska.
Example 3: An Iowa consumer with an Iowa billing and mailing address purchases prepaid wireless service through a retailer’s website. No items are delivered. The sale would be sourced to the consumer’s Iowa billing address.
Example 4: A seller based in California uses a website to sell prepaid wireless services to consumers in a number of states. A consumer with an Iowa billing address and a Nebraska mailing address purchases prepaid wireless service from the seller’s website. The consumer already owns a prepaid wireless phone; therefore, no item is delivered. Since there is no in-person transaction, and no item delivered, the sale would be sourced to the consumer’s billing address in Iowa.
Example 5: A seller based in California uses a website to sell prepaid wireless services to consumers in a number of states. A consumer with an Iowa mailing address and a Florida billing address purchases a prepaid wireless phone and 100 minutes of prepaid wireless service from the California seller. The prepaid wireless phone is shipped to the Iowa mailing address. The sale would be sourced to Iowa.
Example 6: A consumer who is currently living in Iowa to attend a local university orders prepaid wireless service from a California seller through the seller’s website. No items are delivered. The consumer uses a Nebraska billing address. The sale would be sourced to Nebraska.
	c. 	A sale of a private telecommunication service is sourced as follows:
	(1)	Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which the customer channel termination point is located.
	(2)	Service where all customer termination points are located entirely within one jurisdiction or levels of jurisdiction is sourced in the jurisdiction in which the customer channel termination points are located.
	(3)	Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located.
	(4)	Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points.
	d. 	The sale of Internet access service is sourced to the customer’s place of primary use.
	e. 	The sale of an ancillary service is sourced to the customer’s place of primary use.
	f. 	A postpaid calling service is sourced to the origination point of the telecommunication signal as first identified by either:
	(1)	The seller’s telecommunication system; or
	(2)	Information received by the seller from its service provider, where the system used to transport the signals is not that of the seller.
	g. 	The sale of telecommunication service sold on a call-by-call basis is sourced to:
	(1)	Each level of taxing jurisdiction where the call originates and terminates in that jurisdiction; or
	(2)	Each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
	h. 	The sale of telecommunication service sold on a basis other than a call-by-call basis is sourced to the customer’s place of primary use.
	i. 	The sale of the following telecommunication services is sourced to each level of taxing jurisdiction as follows:
	(1)	A sale of mobile telecommunication service, other than prepaid calling service, is sourced to the customer’s place of primary use as required by the federal Mobile Telecommunications Sourcing Act.
	(2)	A sale of postpaid calling service is sourced to the origination point of the telecommunication signal as first identified by either the seller’s telecommunication system or information received by the seller from its service provider, where the system used to transport such signals is not that of the seller.
[ARC 9814B, IAB 10/19/11, effective 11/23/11; ARC 0527C, IAB 12/12/12, effective 1/16/13; ARC 6508C, IAB 9/7/22, effective 10/12/22]