1. (a) Except as provided in subsection (b), the holder of a certificate under this chapter shall, at the end of each calendar quarter, determine under subsections (c) and (d) the gross revenue received during that quarter from the holder's provision of video service in each unit included in the holder's service area under the certificate.

2. (b) This subsection applies to a holder or other provider providing video service in a unit in which a provider of video service is required on June 30, 2006, to pay a franchise fee based on a percentage of gross revenues. The holder's or provider's gross revenue shall be determined as follows:

   1. (1) If only one (1) local franchise is in effect on June 30, 2006, the holder or provider shall determine gross revenue as the term is defined in the local franchise in effect on June 30, 2006.

   2. (2) If:

      1. (A) more than one (1) local franchise is in effect on June 30, 2006; and

      2. (B) the holder or provider is subject to a local franchise in the unit on June 30, 2006;

         the holder or provider shall determine gross revenue as the term is defined in the local franchise to which the holder or provider is subject on June 30, 2006.

   3. (3) If:

      1. (A) more than one (1) local franchise is in effect on June 30, 2006; and

      2. (B) the holder is not subject to a local franchise in the unit on June 30, 2006;

         the holder shall determine gross revenue as the term is defined in the local franchise in effect on June 30, 2006, that is most favorable to the unit.

3. (c) This subsection does not apply to a holder that is required to determine gross revenue under subsection (b). The holder shall include the following in determining the gross revenue received during the quarter with respect to a particular unit:

   1. (1) Fees and charges charged to subscribers for video service provided by the holder. Fees and charges under this subdivision include the following:

      1. (A) Recurring monthly charges for video service.
      2. (B) Event based charges for video service, including pay per view and video on demand charges.
      3. (C) Charges for the rental of set top boxes and other equipment.
      4. (D) Service charges related to the provision of video service, including activation, installation, repair, and maintenance charges.
      5. (E) Administrative charges related to the provision of video service, including service order and service termination charges.
   2. (2) Revenue received by an affiliate of the holder from the affiliate's provision of video service, to the extent that treating the revenue as revenue of the affiliate, instead of revenue of the holder, would have the effect of evading the payment of fees that would otherwise be paid to the unit. However, revenue of an affiliate may not be considered revenue of the holder if the revenue is otherwise subject to fees to be paid to the unit.

4. (d) This subsection does not apply to a holder that is required to determine gross revenue under subsection (b). The holder shall not include the following in determining the gross revenue received during the quarter with respect to a particular unit:

   1. (1) Revenue not actually received, regardless of whether it is billed. Revenue described in this subdivision includes bad debt.
   2. (2) Revenue received by an affiliate or any other person in exchange for supplying goods and services used by the holder to provide video service under the holder's certificate.
   3. (3) Refunds, rebates, or discounts made to subscribers, advertisers, the unit, or other providers leasing access to the holder's facilities.

   4. (4) Revenue from providing service other than video service, including revenue from providing:

      1. (A) telecommunications service (as defined in 47 U.S.C. 153);
      2. (B) information service (as defined in 47 U.S.C. 153), other than video service; or
      3. (C) any other service not classified as cable service or video programming by the Federal Communications Commission.

   5. (5) Any fee imposed on the holder under this chapter that is passed through to and paid by subscribers, including the franchise fee:

      1. (A) imposed under section 24 of this chapter for the quarter immediately preceding the quarter for which gross revenue is being computed; and
      2. (B) passed through to and paid by subscribers during the quarter for which gross revenue is being computed.

   6. (6) Revenue from the sale of video service for resale in which the purchaser collects a franchise fee under:

      1. (A) this chapter; or

      2. (B) a local franchise agreement in effect on July 1, 2006;

         from the purchaser's customers. This subdivision does not limit the authority of a unit, or the commission on behalf of a unit, to impose a tax, fee, or other assessment upon the purchaser under 47 U.S.C. 542(h).

   7. (7) Any tax of general applicability:

      1. (A) imposed on the holder or on subscribers by a federal, state, or local governmental entity; and

      2. (B) required to be collected by the holder and remitted to the taxing entity;

         including the state gross retail and use taxes ( IC 6-2.5 ) and the utility receipts tax ( IC 6-2.3 ) (before its repeal).

   8. (8) Any forgone revenue from providing free or reduced cost cable video service to any person, including:

      1. (A) employees of the holder;
      2. (B) the unit; or

      3. (C) public institutions, public schools, or other governmental entities, as required or permitted by this chapter or by federal law.

         However, any revenue that the holder chooses to forgo in exchange for goods or services through a trade or barter arrangement shall be included in gross revenue.

   9. (9) Revenue from the sale of:

      1. (A) capital assets; or
      2. (B) surplus equipment that is not used by the purchaser to receive video service from the holder.

   10. (10) Reimbursements that:

       1. (A) are made by programmers to the holder for marketing costs incurred by the holder for the introduction of new programming; and
       2. (B) exceed the actual costs incurred by the holder.
   11. (11) Late payment fees collected from customers.
   12. (12) Charges, other than those described in subsection (c)(1), that are aggregated or bundled with charges described in subsection (c)(1) on a customer's bill, if the holder can reasonably identify the charges on the books and records by the holder in the regular course of business.

5. (e) If, under the terms of the holder's certificate, the holder provides video service to any unincorporated area in Indiana, the holder shall calculate the holder's gross income received from each unincorporated area served in accordance with:

   1. (1) subsection (b); or

   2. (2) subsections (c) and (d);

      whichever is applicable.

6. (f) If a unit served by the holder under a certificate annexes any territory after the certificate is issued or renewed under this chapter, the holder shall:

   1. (1) include in the calculation of gross revenue for the annexing unit any revenue generated by the holder from providing video service to the annexed territory; and

   2. (2) subtract from the calculation of gross revenue for any unit or unincorporated area:

      1. (A) of which the annexed territory was formerly a part; and

      2. (B) served by the holder before the effective date of the annexation;

         the amount of gross revenue determined under subdivision (1);

         beginning with the calculation of gross revenue for the calendar quarter in which the annexation becomes effective. The holder shall notify the commission of the new boundaries of the affected service areas as required under section 20(a)(7) of this chapter.

7. (g) This subsection applies to a unit that:

   1. (1) annexes territory after December 31, 2015; and

   2. (2) is served on the date of the annexation by the holder of a certificate that is issued or renewed under this chapter before the date of the annexation.

      The unit shall provide the holder a list of all addresses located within the annexed territory not more than thirty (30) days after the date of the annexation. If the holder is required to pay the franchise fee imposed and calculated under this section, the holder is not required to pay the franchise fee with respect to addresses provided under this subsection until ninety (90) days after the unit provides the holder with the addresses under this subsection.

As added by P.L.27-2006, SEC.58. Amended by P.L.1-2007, SEC.78; P.L.6-2012, SEC.63; P.L.228-2015, SEC.1; P.L.7-2015, SEC.16; P.L.149-2016, SEC.36; P.L.138-2022, SEC.17.