The California Board of Equalization ("BOE") released guidance on a law change effective January 1, 2017 for sellers of prepaid mobile telephony services ("MTS").
Prepaid wireless phone cards and services are subject to a prepaid MTS surcharge in California. Currently, the surcharge is imposed on purchasers but must be collected by all retail sellers. Beginning January 1, 2017, small sellers will not have to collect the MTS surcharge from their customers. Small sellers are those that sold less than $15,000 in prepaid MTS sales during the previous calendar year. Small sellers do not include telecommunication service suppliers. Small sellers may choose to voluntarily continue to charge and collect the prepaid MTS surcharge on behalf of purchasers. Purchasers will continue to be responsible for the surcharge.