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Local Jurisdictions Must Contract with BOE for Collection of Local Charges on Prepaid Mobile Telephony Services by Sept. 1

August 21, 2015
Beginning Jan. 1, 2016, AB 1717 requires local jurisdictions to contract with the California State Board of Equalization (BOE) in order to receive revenue from local utility user taxes (UUT), local 911 charges, and any other local charges imposed on consumers of prepaid mobile services.
 
Important Deadlines
 
To ensure the uninterrupted collection of these local revenues, local jurisdictions must contract with the BOE by Sept. 1. If a local jurisdiction does not contract with the BOE, any local charges imposed upon prepaid mobile telephony services (MTS) will not be collected by the sellers and the local jurisdiction will not receive local charge revenue from prepaid MTS once the new law is effective on Jan. 1.
 
If the local jurisdiction does not contract with BOE by Sept. 1, 2015, the next deadline is Dec. 1 for collection beginning April 1, 2016. In order to contract with the BOE, local jurisdictions must have an ordinance that applies its local charge to prepaid MTS.
 
New Law Requirements
 
Current law imposes a variety of surcharges on phone services, including prepaid mobile phone services. Currently, phone carriers are generally responsible for collecting and paying these surcharges (for example, the 911 emergency surcharge and California Public Utilities Commission surcharges) to the state. The new law replaces all current charges imposed upon prepaid mobile phone services with a new prepaid MTS surcharge. The prepaid MTS surcharge will be paid by purchasers of prepaid wireless services in California and be collected at the time of purchase.
 
Under the new law, the MTS surcharge will be the only method for local jurisdictions to collect taxes and surcharges imposed upon prepaid mobile telephone services sold in their jurisdiction.
 
For More Information
 
For more information about contracting with BOE for the collection of UUT and/or local 911 charges, please contact the BOE’s Local Revenue Allocation Unit at (916) 324-3000 or by email.
 
General information about the new Prepaid MTS surcharge is available on BOE’s Prepaid Mobile Telephony Services Surcharge guide.
 


 
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