Five States Enact New Rules for 911 Surcharges

Monday, January 21st, 2013

 
 
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Connecticut
General

Several states recently enacted legislation that affects their existing 911 surcharges that became effective January 1, 2013.

Connecticut:

Effective January 1, 2013, retailers selling prepaid wireless telecommunications service in Connecticut must collect a prepaid wireless 911 fee from the consumer at the time of sale. The standard state 911 fee no longer applies to prepaid wireless service. The prepaid wireless 911 fee is equal to the monthly 911 fee the Connecticut Public Utility Regulatory Authority ("PURA") assesses on other telecommunications service subscribers, which is currently $0.67, and is recalculated by PURA annually. The prepaid wireless 911 fee collected by retailers is remitted monthly to the Department of Revenue Services on Form OP-153, Prepaid Wireless E911 Fee Return. Also effective January 1, 2013, the progressive 911 fee schedule that discounts the monthly rate paid by subscribers in proportion to how many access lines the subscriber has no longer applies to wireless phone subscribers. This change will affect customers with more than one wireless phone on one account; the regular, non-discounted, 911 monthly fee will apply to all of the wireless phones on an account. See 2012 Conn. Pub. Act 153 and Conn. Special Notice No. 2012(7) (Dept. of Revenue Servs. Nov. 30, 2012).

Iowa:

Beginning January 1, 2013, retailers selling prepaid wireless telecommunications service in Iowa must collect a $0.33 prepaid wireless 911 fee from the consumer at the time of sale. The standard state 911 fee no longer applies to prepaid wireless service. If more than one separately priced item of prepaid wireless calling service is purchased, each item purchased constitutes a separate retail transaction subject to the $0.33 fee. Prepaid wireless services include, but are not limited to, prepaid wireless phones, prepaid wireless phone calling cards, rechargeable prepaid wireless phones, rechargeable prepaid wireless phone calling cards, and prepaid wireless service plans. If the prepaid wireless service is 10 minutes or less or $5.00 or less and is sold with a prepaid wireless device for a single, non-itemized price, then the seller may elect not to apply the fee to the transaction. The prepaid wireless 911 fee collected by retailers is remitted electronically to the Iowa Department of Revenue when filing the Iowa sales tax return (Form 32-022b - Iowa Sales/Retailer's Use Tax and Surcharge Return). The Iowa Department of Revenue is scheduled to have the eFile and Pay system updated for the new fee on January 24, 2013. See new Iowa Code Ann. sec. 34A.7B and Iowa Admin. Code r. 701-224.8.


Maine:

Effective January 1, 2013, prepaid wireless will no longer be subject to the Prepaid Wireless 911 Fee, the Maine Universal Service Fund assessment, and the Maine Telecommunications Education Access Fund ("TEAF") fee as separate assessments. Instead they will be part of a single, point-of-sale Prepaid Wireless Fee. The Prepaid Wireless Fee is currently $0.98, which is the sum of: (1) the state prepaid wireless 911 surcharge ($0.45); (2) a state Universal Service Fund fee ($0.38); and (3) a TEAF fee ($0.15). The seller of prepaid wireless telecommunications services is required to collect the prepaid wireless fee from prepaid wireless consumers for each retail transaction occurring in Maine. The prepaid wireless fees collected by the sellers must be remitted to the State Tax Assessor at the same times and in the same manner as sales tax. See Code Me. R. 65 407 284 secs. 1-6.

Michigan:

Beginning January 1, 2013, retailers selling prepaid wireless telecommunications service in Michigan must collect a new prepaid wireless 911 fee from the consumer at the time of sale. The amount of the prepaid wireless 911 fee is 1.92% per retail transaction. The standard $0.19 state 911 fee no longer applies to prepaid wireless service. If a prepaid wireless telecommunications service is sold with one or more other products or services for a single, non-itemized price, the seller must collect the 1.92% on the entire price unless the seller elects to do the following: (1) If the amount of the prepaid wireless telecommunications service is disclosed to the consumer as a dollar amount, apply the percentage to that dollar amount; or (2) if the seller can identify the portion of the price that is attributable to the prepaid wireless telecommunications service in its books and records that are kept in the regular course of business for nontax purposes, apply the percentage to that portion. If the prepaid wireless service is 10 minutes or less or $5.00 or less and is sold with a prepaid wireless device for a single, non-itemized price, then the seller may elect not to apply the fee to the transaction. The prepaid wireless fees collected by the sellers must be remitted to the Michigan Department of Treasury at the same times and in the same manner as sales tax. See amended Mich. Comp. Laws Ann. sec. 484.1401c and 2012 Mich. Acts 260.

Nebraska:

Beginning January 1, 2013, retailers are required to collect a prepaid wireless surcharge on every retail sale of prepaid wireless telecommunications services, including the sale of prepaid mobile phones, prepaid phone cards, and the recharging of those prepaid phones and cards. The state enhanced wireless surcharge and state telecommunications relay service no longer apply to prepaid wireless service. The surcharge will assist Nebraska communities in providing emergency 911 services and in providing a statewide system for specialized telecommunications equipment for qualified hearing impaired persons. The surcharge is 1.1% for the period January 1, 2013 to December 31, 2013. If a prepaid wireless telecommunications service is sold with one or more other products or services for a single, non-itemized price, the seller may elect to treat the price of the prepaid wireless telecommunications service (a) as the entire non-itemized price, (b) if the amount of prepaid wireless telecommunications service is disclosed to the consumer as a dollar amount, as that dollar amount, or (c) if the retailer can identify the portion of the price that is attributable to the prepaid wireless telecommunications service in its books and records that are kept in the regular course of business for nontax purposes, as that portion. If the prepaid wireless service is 10 minutes or less or $5.00 or less and is sold with a prepaid wireless device for a single, non-itemized price, then the seller may elect not to apply the surcharge to the transaction. Retailers must remit the amounts collected to the Nebraska Department of Revenue on form E911N by the 20th of the month following the reporting period. See Neb. Rev. Stat. Ann. sec. 86-903 and 2012 Neb. Laws LB1091.


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