U.S. Code » Title 4 » Chapter CHAPTER 4— THE STATES

4 U.S.C. § 116

Rules for determining State and local government treatment of charges related to mobile telecommunications services

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(a)Application of This Section Through Section 126.—This section through 11 So in original. Probably should be followed by “section”. 126 of this title apply to any tax, charge, or fee levied by a taxing jurisdiction as a fixed charge for each customer or measured by gross amounts charged to customers for mobile telecommunications services, regardless of whether such tax, charge, or fee is imposed on the vendor or customer of the service and regardless of the terminology used to describe the tax, charge, or fee.(b)General Exceptions.—This section through 1 126 of this title do not apply to—(1) any tax, charge, or fee levied upon or measured by the net income, capital stock, net worth, or property value of the provider of mobile telecommunications service;(2) any tax, charge, or fee that is applied to an equitably apportioned amount that is not determined on a transactional basis;(3) any tax, charge, or fee that represents compensation for a mobile telecommunications service provider’s use of public rights of way or other public property, provided that such tax, charge, or fee is not levied by the taxing jurisdiction as a fixed charge for each customer or measured by gross amounts charged to customers for mobile telecommunication services;(4) any generally applicable business and occupation tax that is imposed by a State, is applied to gross receipts or gross proceeds, is the legal liability of the home service provider, and that statutorily allows the home service provider to elect to use the sourcing method required in this section through 1 126 of this title;(5) any fee related to obligations under section 254 of the Communications Act of 1934; or(6) any tax, charge, or fee imposed by the Federal Communications Commission.(c)Specific Exceptions.—This section through 1 126 of this title—(1) do not apply to the determination of the taxing situs of prepaid telephone calling services;(2) do not affect the taxability of either the initial sale of mobile telecommunications services or subsequent resale of such services, whether as sales of such services alone or as a part of a bundled product, if the Internet Tax Freedom Act would preclude a taxing jurisdiction from subjecting the charges of the sale of such services to a tax, charge, or fee, but this section provides no evidence of the intent of Congress with respect to the applicability of the Internet Tax Freedom Act to such charges; and(3) do not apply to the determination of the taxing situs of air-ground radiotelephone service as defined in section 22.99 of title 47 of the Code of Federal Regulations as in effect on June 1, 1999.(Added Pub. L. 106–252, § 2(a), July 28, 2000, 114 Stat. 626.)Editorial NotesReferences in Text

Section 254 of the Communications Act of 1934, referred to in subsec. (b)(5), is classified to section 254 of Title 47, Telecommunications.

The Internet Tax Freedom Act, referred to in subsec. (c)(2), is title XI of Pub. L. 105–277, div. C, Oct. 21, 1998, 112 Stat. 2681–719, which is set out as a note under section 151 of Title 47, Telecommunications.

Statutory Notes and Related SubsidiariesEffective Date; Application of Amendment

Pub. L. 106–252, § 3, July 28, 2000, 114 Stat. 633, provided that:“(a)Effective Date.—Except as provided in subsection (b), this Act [enacting this section and sections 117 to 126 of this title and provisions set out as a note under section 1 of this title] and the amendment made by this Act shall take effect on the date of the enactment of this Act [July 28, 2000].“(b)Application of Act.—The amendment made by this Act [enacting this section and sections 117 to 126 of this title] shall apply only to customer bills issued after the first day of the first month beginning more than 2 years after the date of the enactment of this Act [July 28, 2000].”

Notes of Decisions
Cited in 14 cases (1 in the last 5 years), 2007–2021 · leading case: TracFone Wireless, Inc. v. Dep't of Revenue, 242 P.3d 810 (Wash. 2010).
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TracFone Wireless, Inc. v. Dep't of Revenue, 242 P.3d 810 (Wash. 2010). · cites it 2× “106-252, § 2 (a) (§ 116(c)(1)) ( 4 U.S.C. § 116 (c)(1)). ¶21 TracFone contends that when the legislature incorporated the definition of “place of primary use” in the MTSA, it “adopted the MTSA” for taxation of prepaid wireless.”
People v. Sprint Nextel Corp., 42 N.E.3d 655 (NY 2015). “Congress responded by enacting the Mobile Telecommunications Sourcing Act (MTSA) ( 4 USC § 116 et seq.) The MTSA establishes a uniform “sourcing” rule for state taxation of mobile telecommunications services: the only state that may impose a tax is the state of the customer’s…”
AB CELLULAR LA, LLC v. City of Los Angeles, 2007 Cal. Daily Op. Serv. 5116 (Cal. Ct. App. 2007). “The City determined that with the advent of the MTSA it had the authority to unilaterally impose the cell tax on all air time and thereby increase cell taxes.”
T-Mobile v. Bonet, 1100107 (Ala. 12-2-2011), 85 So. 3d 963 (Ala. 2011). “T-Mobile argues that this Court should not rely on this attorney general’s opinion because, it argues, the opinion is flawed in that the attorney general incorrectly determined the Mobile Telecommunications Sourcing Act, 4 U.S.C. § 116 et seq. (“the MTSA”), mandated that prepaid…”
The Off. of Consum. Advocate v. The Pub. Serv. Comm'n of Wyoming, 2013 WY 48 (Wyo. 2013). “Any charge related to mobile telecommunications service shall only apply if the customer's place of primary use is in this state as provided by the Mobile Telecommunications Sourcing Act, 4 U.S.C. §§ 116 to 126. The provisions of the Mobile Telecommunications Sourcing Act shall…”
Virgin Mobile USA, LP v. Arizona Dep't of Revenue, 282 P.3d 1281 (Ariz. Ct. App. 2012). “” 4 U.S.C. § 116 (c)(1). ¶ 18 Taxpayer argues that because of A.”
People v. Sprint Nextel Corp., 114 A.D.3d 622 (N.Y. App. Div. 2014). “Contrary to defendants’ interpretation, the Tax Law provision is not preempted by the Federal Mobile Telecommunications Sourcing Act ( 4 USC § 116 et seq.). The court also properly rejected defendants’ argument that *623 the New York False Claims Act with respect to statements…”
State Dep't of Revenue v. Decatur RSA LP (Ex parte State Dep't of Revenue), 247 So. 3d 378 (Ala. Civ. App. 2016). “The Alabama Legislature amended § 40-21-121 in 2001 by, among other things, adding subsection (k) in response to the passage of the federal Mobile Telecommunications Sourcing Act ("the federal MTSA"), 4 U.S.C. § 116 et seq. See Title to Act No.”
Tracfone Wireless v. Dept. of Revenue, 242 P.3d 810 (Wash. 2010). · cites it 2× “106-252, § 2 (a) (§ 116(c)(1)) ( 4 U.S.C. § 116 (c)(1)). ¶ 21 TracFone contends that when the legislature incorporated the definition of "place of primary use" in the MTSA, it "adopted the MTSA" for taxation of prepaid wireless.”
MetroPCS California, LLC v. Batjer (N.D. Cal. 2021). “at 37, to 2 contend that the CPUC’s resolutions are preempted by the Mobile Telephony Sourcing Act 3 (“MTSA”), 4 U.S.C. §§ 116 et seq. MetroPCS relies on the following provision in the MTSA: 4 Additional taxable charges -- If a taxing jurisdiction does not otherwise subject 5…”
Pagano v. Bennett (D. Kan. 2020). “This prompted Congress to enact the Mobile Telecommunications Sourcing Act, 4 U.S.C. § 116 et seq., which adopted a “sourcing” rule that said the only state that can impose a sales tax on calls is the state of the customer’s place of primary use.”
The Off. of Consum. Advocate v. The Pub. Serv. Comm'n of Wyoming, 2013 WY 48 (Wyo. 2013). “Any charge related to mobile telecommunications service shall only apply if the customer’s place of primary use is in this state as provided by the Mobile Telecommunications Sourcing Act, 4 U.S.C. §§ 116 to 126. The provisions of the Mobile Telecommunications Sourcing Act shall…”
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