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PagePlus Starts Charging Taxes and Fees on Airtime

PagePlus Cellular is now charging taxes and fees on airtime purchased on the PagePlus Website. The amount charged varies by state and city. Here are a few examples of what's being added to a $10 airtime PIN.
  • Chicago $1.12 (80¢ Sales Tax, 15¢ Federal Universal Service Fee, 2¢ Regulatory Cost Recovery Fee, 15¢ E911 Fee) 
  • Milwaukee $1.11 (56¢ Sales Tax, 15¢ Federal Universal Service Fee, 2¢ Regulatory Cost Recovery Fee, 38¢ E911 Fee) 
  • New York City $1.06 (89¢ Sales Tax, 15¢ Federal Universal Service Fee, 2¢ Regulatory Cost Recovery Fee) 
  • Reno 17¢ (15¢ Federal Universal Service Fee, 2¢ Regulatory Cost Recovery Fee)
  • San Francisco 34¢ (15¢ Federal Universal Service Fee, 2¢ Regulatory Cost Recovery Fee, 17¢ E911 Fee) 
This change seems to be a result of TracFone's acquisition PagePlus. Taxes have always been charged when ordering airtime online from TracFone and its associated brands like Straight Talk and NET10. Pre-acquisition PagePlus only added taxes on orders by Ohio residents. PagePlus is based in Ohio and online merchants are required to pay applicable sales taxes and fees on sales to residents of the states where they have a physical presence. TracFone appears to be adding sales taxes and 911 fees in all states that have those taxes. They are also passing on the Federal Universal Service and Regulatory Cost Recovery fees, which other prepaid operators. including pre-acquisition PagePlus, have traditionally included in the base airtime price.

Users can avoid the taxes by buying airtime from online vendors like CallingMart.com, which only taxes Florida residents. Keep in mind that in most states, residents are required to report and pay sales tax on purchases from out of state retailers on their state income tax forms, although few reportedly do.

The loophole that lets users avoid taxes by buying online may eventually be closed. There's currently a bill before Congress, the Marketplace Fairness Act of 2013, that would require all online merchants to collect applicable state and local taxes on all online purchases. Similar bills have been proposed and defeated in the past, but the current bill seems to have a better chance of passage.

9 comments:

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  1. From what I have heard America Movil keeps most of the taxes they charge customers and remit only a portion to states. AM can't keep charging customers taxes and pocketing them forever. Sooner or later the states will get wise to this scheme and prosecute Tracfone, Net10, Straight Talk, PagePlus, Simple Mobile etc for stealing tax revenue.

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    1. How do you know this? It isn't generally wise to make statements like these without knowing for sure as it is called libel.

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    2. What, you work for Slim?

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  2. This is just the beginning of AM changes on PP for the worse, stay tuned for more!!

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    1. They are all moving in this direction.

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  3. TracFone and Page Plus will take a lot of Verizon customers if they have access to LTE.

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  4. They'll never have access to LTE. Verizons prepaid customers don't even have access to the LTE!! Comparing PPC plan now (with taxes) and Verizons, basically the same, with the exception with contract you have LTE AND Verizon does have technical support for their phones. PPC doesn't unless you buy one of their cheap phones.

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  5. I live in Alabama, and just went on line to refill my Pageplus plan, as I have done for several years, and sure enough - there are the taxes! Sales tax, Fed. Universal Service tax, Regulatory Cost Recovery (?), and E911 fee! That took my monthly service from $39.95 to $45.83! I called Pageplus Customer Service who told me they are required to charge these fees now! Really? So, then I called my local Pageplus dealer, which is a local electronics store, and they renewed it for me WITHOUT the taxes!! Very glad for that!

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  6. All the more reason now to go to Selectel or AT&T MVNO's. Whoever is doing the dirtywork for Carlos Slim must be getting a HUGE bonus!

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