Effective January 1, 2016, California imposed a prepaid mobile telephony services (MTS) surcharge on purchasers of prepaid wireless services.
Sellers of prepaid wireless services will be responsible for the collection and remittance of the prepaid MTS surcharge which will consist of the following:
- Prepaid 911 Surcharge Rate
- California Combined PUC Surcharge
- Local Charges
For Retailers, it really couldn’t be any easier. Everything MTS related (state & local surcharges) will be collected and remitted to the state on the new CA MTS Return (E File only) through the California Board of Equalization’s (BOE) online service center. The BOE will then allocate the local taxes out to the local jurisdictions once a quarter. For the Prepaid 911 Surcharge, retailers will report and remit all liability on the Emergency Services Surcharge paper return (BOE 501-TE) until the online filing system is set up in the Fall of 2016.
For Direct Sellers, the state portion (Prepaid 911 Surcharge) will be reported and remitted to the state via the Emergency Services Surcharge paper return (BOE 501-TE) until the online filing system is set up in the Fall of 2016. What was formerly reported and remitted on the California Combined PUC Surcharge report will now be reported directly to the PUC via the online service center (https://efile.boe.ca.gov/boe/boe_login.jsp). Lastly, the local surcharge information will be reported and remitted directly to the local jurisdictions utilizing the revised Utility Users Tax Forms.
Direct Sellers are likely feeling the pinch associated with this recently imposed surcharge, as reporting and remitting to each and every local jurisdiction in California comes with its own set of idiosyncrasies.
While we are currently in the midst of preparing the first reporting and remittances of the new MTS return, California has advised us that they will continue to add and update information (new forms, contact info for local jurisdictions, etc) which will be posted on the California State Board of Equalization website http://boe.ca.gov/industry/prepaid_mts_surcharge.html