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Prepaid Wireless E-911 Fee

 

Effective January 1, 2011, House Bill 754 and Senate Bill 441 impose a new Prepaid Wireless E-911 fee of $0.50 on each retail purchase of prepaid wireless calling service.  Dealers who sell prepaid wireless service must collect the Prepaid Wireless E-911 fee and remit it with their Retail Sales and Use Tax returns, beginning with the month of January 2011.

“Prepaid wireless calling service” means mobile telecommunications services that allow a caller to dial 911 to access the 911 system, are required to be paid for in advance, and are limited, meaning they are sold in predetermined units or dollars of which the number declines with use in a known amount.  For the purposes of the Prepaid Wireless E-911 Fee, unlimited wireless calling service, if paid for in advance of use, is considered prepaid wireless calling service, and subject to the Prepaid Wireless E-911 Fee.

Key changes for the Prepaid Wireless E-911 fee are:

  • The fee is collected by dealers at the point of sale, beginning with sales made on or after January 1, 2011.
  • Dealers who currently use return coupons provided by TAX should receive new coupons by the end of January 2011.
  • A new line (Line 11) has been added to the Retail Sales and Use Tax return to report Prepaid Wireless E-911 service transactions by dealers .
  • The Virginia Retail Sales and Use Tax Worksheet has been updated to assist dealers in computing the fee amount and applying the Dealer's Discount.
  • Dealers are allowed to retain a discount of 5% of the Prepaid Wireless E-911 fee if the return and payment are timely filed.  The discount is available to all dealers making sales of qualifying prepaid wireless calling services, regardless of the amount of monthly sales.

Additional Information:

Prepaid Wireless E-911 Fee FAQs

1. Are prepaid wireless calling services purchased by nonprofit organizations exempt from the Prepaid Wireless E-911 Fee?

No, purchases of prepaid wireless calling services by nonprofit organizations are not exempt.  Nonprofit organizations would need to pay the fee for each qualified item purchased even if the items are given away free of charge after the purchase is made.

2. Are prepaid wireless calling services purchased by the Commonwealth of
Virginia or the federal government exempt?

Yes, purchases of prepaid wireless calling services made by the Commonwealth of Virginia or any political subdivision thereof or by the federal government are exempt.


3. What about the prepaid wireless calling services provided to low-income individuals by government supported Lifeline programs, such as Safelink Wireless, or Assurance Wireless?

If the services are provided to the customer free of charge, then the fee does not apply.  However, the $0.50 fee still applies if these same services are provided to the customer at a reduced cost.


4. Are we required to separately itemize the Prepaid Wireless E-911 Fee on the Customer’s bill, invoice, ticket or billing statement?

Yes, unless you meet the definition of a “small dealer,” as such dealers are not required to separately state the fee. "Small dealer" means a dealer who has collected less than $1,200 in Prepaid Wireless E-911 Fees in the previous calendar year.  For the year beginning January 1, 2011, a dealer will be considered a "small dealer" if he is currently allowed to file the Retail Sales and Use Tax on a quarterly or less frequent basis.

5. When do we need to separately itemize the Prepaid Wireless E-911 Fee on the
customer’s bill, invoice, ticket or billing statement?

The Prepaid Wireless E-911 Fee needs to be separately itemized on the customer’s bill, invoice, ticket or billing statement by July 1, 2011.

6. Can we request a waiver of the requirement to separately state the Prepaid Wireless E-911 Fee on customer bills, invoices and other billing statements?

Yes.  If you are required to separately state the Prepaid Wireless E-911 Fee on customer bills, invoices, or other billing statements, and you believe that it would be impractical for you to do so; you may submit a written request to the Tax Commissioner asking for waiver of the requirement.  Requests for a waiver should be mailed to the following address:

Tax Commissioner
Virginia Department of Taxation
P. O. Box 546
Richmond, Virginia 23218-0546


7. Is unlimited wireless calling service subject to the Prepaid Wireless E-911 Fee if it is paid for in advance?

Yes.  For the purposes of the Prepaid Wireless E-911 Fee, unlimited wireless calling service, if paid for in advance of use, is considered prepaid wireless calling service.  Unlimited wireless calling service, if paid for in advance of use, is subject to the Prepaid Wireless E-911 Fee.

8. We are registered to collect Sales Tax. Do we need to register to collect the Prepaid Wireless E-911 Fee?

No, since you are currently registered for the Retail Sales and Use Tax, you do not need to register with TAX for the Prepaid Wireless E-911 Fee.  You will remit the Prepaid Wireless E-911 Fee using your regular Retail Sales and Use Tax return.

9. Can we absorb the Prepaid Wireless E-911 Fee?

Yes, in lieu of collecting the Prepaid Wireless E-911 Fee from customers, you may absorb the fees temporarily and become solely liable for them on all retail sales of prepaid wireless calling services.

Temporary absorption of the fee is permitted until July 1, 2011 to allow dealers additional time to program their systems and registers.  If, due to hardship, you wish to continue to absorb the fee beyond that time, you must submit a written request to the Tax Commissioner seeking authorization to do so.

This written request must clearly state the nature of the hardship and include supporting documentation.  It must also identify the specific time period you wish to continue absorbing the Prepaid Wireless E-911 Fee.

Requests for authorization should be mailed to the following address:

Tax Commissioner
Virginia Department of Taxation
P. O. Box 546
Richmond, Virginia 23218-0546

10. Is a discount allowed for collecting the Prepaid Wireless E-911 Fee?

Yes, a discount of five percent of the Prepaid Wireless E-911 Fee due is allowed in the form of a deduction, provided the amount due was not delinquent at the time of payment.

11. Are dealers who are not eligible for discounts for the Retail Sales and Use Tax eligible for Prepaid Wireless E-911 discounts?

Yes.  This discount is separate from the dealer discount allowed for the Retail Sales and Use Tax.  Dealers that are not eligible for the dealer discount on the Retail Sales and Use Tax are still eligible for the discount on the Prepaid Wireless E-911 Fee, provided that the amount due was not delinquent at the time of payment.

12. Have filing and payment options changed with the implementation of this fee?

No.  Dealers will continue to file and pay in the same manner as before, whether by
mail or electronic means, such as iFile or Web Upload.

 

For additional information, please refer to the Guidelines and Rules for the Prepaid Wireless E-911 Fee.
 

 

Last Updated 2/20/2013 8:58

 

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