New Jersey-2012-A1739-Introduced

An Act imposing a gross revenues tax on providers of direct-to-home satellite services and supplementing Title 54 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

"Direct-to-home satellite service" or "service" means video programming transmitted or broadcast by satellite directly to a subscriber's premises without the use of ground receiving or distribution equipment, except at a subscriber's premises or in the uplink process to the satellite.

"Gross revenues" means all revenues actually received by a provider of direct-to-home satellite service derived during the calendar year from all the charges or fees paid by subscribers in this State to such provider for furnishing direct-to-home satellite service, but gross revenues shall not include: amounts not actually received, even if billed, such as bad debt; refunds, rebates or discounts to subscribers or other third parties; any revenue from any charges or fees derived from services classified as services other than direct-to-home satellite services under federal law, including, without limitation, revenue derived from telecommunications services and information services and any other revenues attributed by the provider of direct-to-home satellite service to services other than direct-to-home satellite services; or amounts billed to and collected from subscribers to recover any tax, fee or surcharge of general applicability imposed by any governmental entity on the provider of direct-to-home satellite service, including without limitation, sales and use taxes, gross receipts taxes, excise taxes, communication taxes, and any other fee allowed by law. In the case of direct-to-home satellite service that may be bundled or integrated functionally with other services, capabilities or applications, gross revenues shall only include those charges or fees derived from or attributable to the provision of direct-to-home satellite service, as reflected on the books and records of the provider of direct-to-home satellite service. If these charges are aggregated with and not separately stated from charges that are subject to taxation, then the charges not derived from or attributable to the provision of direct-to-home satellite service may be subject to taxation unless the provider of direct-to-home satellite service can reasonably identify charges not subject to such tax, charge, or fee from its books and records that are kept in the regular course of business.

"Place of primary use" means the street address of the location which the subscriber's use of the direct-to-home satellite service primarily occurs, which shall be the residential street address or the business street address of the subscriber.

"Provider of direct-to-home satellite service" or "provider" means a person who transmits, broadcasts, sells, or distributes direct-to-home satellite service.

2. a. There is imposed on each provider of direct-to-home satellite service, a tax in the amount of four percent of the gross revenues of such provider derived from charges or fees for the provision of direct-to-home satellite service to subscribers with a place of primary use in this State that is billed on or after July 1, 2006.

b. A provider of direct-to-home satellite service paying the tax imposed pursuant to this act may itemize and separately identify the tax set forth on each periodic bill sent to a subscriber of direct-to-home satellite service.

3. Each provider of direct-to-home satellite service shall file an annual return, on a form as prescribed by the Director of the Division of Taxation in the Department of the Treasury, and pay the amount of tax due pursuant to this act in the manner and at a frequency as the director prescribes, but no more frequently than monthly. Such form shall require the provider to indicate the amounts collected from each municipality in this State in which the service is provided to subscribers with a place of primary use in the municipality. In prescribing the periods to be covered by the return or intervals or classifications for payment of tax liability, the director may take into account the dollar volume of tax involved as well as the need for ensuring the prompt and orderly collection of the tax imposed.

4. a. The Director of the Division of Taxation in the Department of the Treasury shall collect and administer the tax imposed pursuant to this act. In carrying out the provisions of this act, the director shall have all the powers granted in P.L.1966, c.30 (C.54:32B-1 et seq.). The director shall determine and certify to the State Treasurer on at least a quarterly basis the amount of tax collected pursuant to this act and the amount collected from each municipality in which a subscriber maintains a place of primary use. All revenues from the tax imposed pursuant to this act shall be remitted to the State Treasurer and deposited into the General Fund.

b. One half of the revenues from the tax imposed pursuant to this act that are deposited into the General Fund shall be remitted to the respective municipalities that represent the place of primary use of the provider's subscribers. The amount remitted to each such municipality shall be equal to one half of the total amount of the tax paid by all providers on revenues derived from charges or fees for the provision and retail sale of direct-to-home satellite service to subscribers with a place of primary use in the municipality on or after July 1, 2006. The State Treasurer, upon the certification of the director and upon the warrant of the State Comptroller, shall pay and distribute on a quarterly or more frequent basis, as prescribed by the State Treasurer, to the chief fiscal officer of each municipality half of the amount of revenues collected under this section. All revenues remitted to a municipality pursuant to the provisions of this act shall constitute revenues of the municipality and shall be available for any lawful municipal purpose.

c. The tax imposed pursuant to the provisions of this act shall be governed by the provisions of the "State Uniform Tax Procedure Law," R.S.54:48-1 et seq.

5. Excluded from the tax imposed by this act are gross revenues from direct-to-home satellite service the purchase of which is prohibited from taxation under the United States Constitution or laws of the United States.

6. The director may adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as the director determines are necessary to effectuate the provisions of this act.

7. This act shall take effect immediately.

STATEMENT

This bill establishes a tax on each provider of direct-to-home satellite service (also know as "digital broadcast satellite service") in the amount of four percent of the gross revenues of the provider for the provision of direct-to-home satellite service to subscribers with a place of primary use in this State that is billed on or after July 1, 2006. "Direct-to-home satellite service" is defined in the bill as meaning video programming transmitted or broadcast by satellite directly to a subscriber's premises without the use of ground receiving or distribution equipment, except at the subscriber's premises or in the uplink process to the satellite.

The bill requires that, of the revenues received by the State from providers and deposited into the General Fund, one-half is to be set aside for remission to those municipalities where the service to the provider's subscribers is located and apportioned to those municipalities based on an amount equal to two percent of the gross revenues of a provider for the provision of direct-to-home satellite service to subscribers with a place of primary use within the municipality. Revenues remitted to municipalities are to be available for any lawful municipal purpose.

Federal law, in section 602 of the federal "Telecommunications Act of 1996," Pub.L. 104-104, Title VI, s.602, 110 Stat. 144, specifically prohibits a local taxing jurisdiction, such as any municipality, county or any other local jurisdiction in the territorial jurisdiction of the United States, from imposing a tax or fee on a provider of direct-to-home satellite service, but this provision does not prevent the taxation of a provider of direct-to-home satellite service by a State and does not prevent a local taxing jurisdiction from receiving revenue derived from a tax or fee imposed and collected by a State.