North Carolina recently determined that prepaid cards for wireless services sold by wireless service providers are taxable. North Carolina taxes sales of identified services. North Carolina identifies prepaid wireless calling services as taxable.
A "prepaid wireless calling service" is a service that: (1) authorizes a purchase of a mobile telecommunications service, (2) customers pay for in advance, and (3) vendors sell in a predetermined amount whose value declines with use. The wireless cards provide wireless services when redeemed. These wireless services include phone minutes, application downloads, and ringtones. This meets the definition of a prepaid wireless calling service, so the wireless cards are taxable.