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California To Tax Prepaid Airtime Starting Jan 1st

Great Seal of California
California has long been one of the few states where the end user doesn't pay any tax on prepaid airtime. In California there's no sales tax on services and prepaid is considered a service. The state does collect a number of telephony taxes and fees for things like e911 and Lifeline services directly from mobile operators but none from end users. Most local governments also impose a Utility Users Tax (UUT) on mobile services which they also collect from the operators.

Although operators are allowed to pass local, state and federal telephony taxes and fees on to end users, most prepaid operators don't. As a result most California customers who purchase prepaid airtime cards from a local retailer or pay their mobile operator directly on-line using a debit or credit card do not pay any taxes.

Tax-free prepaid in California is going to end Jan 1, 2016. That's when a new law called  AB-1717 goes into effect. It will shift California's state and local taxes on prepaid mobile service from being business taxes imposed on mobile operators to a new point of sale tax on end users. AB-1717 was sponsored by the CTIA, the mobile operators trade and lobby group, and seems to give operators a giant windfall, although the new law's proponents say it will give state and local governments a modest increase in tax revenue.

Under the new law, all the state and local taxes on prepaid airtime will be lumped into a new end-user tax on prepaid service called the Prepaid MTS Surcharge. The MTS tax rate will be calculated each year by the California Board of Equalization. The rate for 2016 will be announced December 1, 2015. Current state business taxes on prepaid airtime are 3.514% and AB-1717 caps local UTT at 9.5%. I believe the new MTS tax on prepaid airtime will probably be between 3.5 and 13 percent, depending on how greedy your town, city and county are.

The new MTS tax is supposed to be collected by anyone selling prepaid airtime in California and to anyone with a California billing address or a California phone number.  Customers can probably avoid paying the tax by buying airtime from an out of state online vendor like Callingmart. However, like the state sales tax on online purchases, California residents are supposed to declare and pay the MTS tax on their state tax returns.

Mobile operators are starting to send California prepaid customers texts notifying them of the new MTS tax. I just got one from T-Mobile directing me to mtsnotice.com, which seems to be a site set up by the operators or the CTIA for the sole purpose of notifying customers of the new tax.

Sources: mtsnotice.com, California Board of Equalization (1)(2), (3)
Image:"Seal of California" original uploader was Zscout370 at en.wikipedia - The base image came from [1] and is PD due to age.. Licensed under CC BY-SA 3.0 via Commons.

139 comments:

Comment Page :
  1. Sounds like California wants to tax you on everything. Soon they'll tax you for breathing their polluted contaminated air. Well can't say I didn't see it coming.

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    1. Hey, Gov. Jerry Brown agreed to provide free health care to illegal aliens, that cost a lot of $$$ my friends.

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    2. Moonbeam never met a tax he didn't love! Just keep it up, Jerry, eventually all the tax slaves will be gone and there'll be no one to support your beloved illegals. I'll move out of here as soon as I can figure a place that isn't going South (literally and figuratively). Even Oregon and Washington are looking good by comparison, even as socialist as they are already. Every time you turn around here, there's a new tax or levy. Sick of it all. We already have the highest gas taxes in the nation, highest income tax, sales tax, tax, tax, tax. Advice to anyone thinking about moving here...don't. You'll be sorry.

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    3. It's easy to blame politicians for new taxes but most of the blame for this one lies with the big four operators and their CTIA lobbying arm. It was the CTIA that sponsored AB-1717 and lobbied for its passage.

      The taxes and fees that make up the new UTT are not new. Currently they are paid by the operators as part of their cost of doing business. Starting Jan 1 they will be paid by end users, saving the operators $46 million annually.

      AB-1717 is yet another example of corporate money influencing politics to benefit the big business at the expense of ordinary Americans.

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    4. I hate living in ca. It just make you mad see how CA is willing to tax you ever way and then give it away to people who are too lazy to work through social b**s**** .

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    5. You can always move to a state where the economy is better, the state is better governed and/or more people know how to manage their money. Start looking here: http://www.foxbusiness.com/personal-finance/2015/10/12/check-out-america-most-money-savvy-states/

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    6. Which is why California has a balanced budget with a growing rainy day fund. Ask red state Kansas how that republican trickle down tax cut worked out. Gov. Brownback has nearly destroyed the Kansas economy and plunged the state into red ink. The only thing tax cuts for the wealthy grow is government debt.

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    7. And you believe Gov. Brown's spin? A “balanced budget?" The state did this by raising taxes, and the economy improved modestly. The state may be breaking even for a year, but as the governor admitted, there is a >$28 B “wall of debt” from the past left over. Independent fiscal experts found that the $28B omits leaves out items like unfunded pension obligations. Add those debts to the total, they found, and the real burden is anywhere between $167 billion and $335 billion. But Jerry says it's "balanced." He won't be around to tackle the wall of debt. Compare that to the Kansas debt and it's clear which state is in better shape.

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    8. The good news is that California has a better credit rating than Illinois.
      The bad news is that it has a worse credit rating than the 48 other states.

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    9. Haha - that didn't stop the high-speed rail project they committed $68B to build. Actual cost, if they finish it, will be much higher. Biggest civil works project in the history of the world. CA got hooked on spending big $$ during the long period of increasing population and economic growth. Now they have a demographic AND growth problem. Population has leveled off - departing native CA residents have been replaced by immigrants who receive more in services than they pay in income taxes. The CA birth rate is way down. Economic growth is small. But the structural spending continues, along with new 'sacred cow' projects like high-speed rail. Supposed to operate without subsidies, using cap-and-trade money (new, regressive energy tax). Those receipts are way behind estimates, which also puts pressure on the so-called balanced budgets. Study after study says you can't fix structural debt problems with tax increases and modest spending cuts; you have to reform spending habits and avoid the tax increases that damage economic growth. CA is ignoring that reality (e.g., high-speed rail). It won't end well.

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    10. " The only thing tax cuts for the wealthy grow is government debt."

      Nice in your imagination. In the real world? The so-called "Tax cuts for the wealthy" under Reagan and Bush were actually mostly middle-class tax cuts. And they directly caused significant increases in overall government tax revenue.

      Turns out that when greedy government elites are robbing the people less, the people are more able to invest in more prosperous and fruitful outcomes.

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    11. I paid 35.00 as my monthly payment prepaid (Univision Mobile, and then I was charged 6.39 additional as tax. That % is an abuse.

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    12. I went to pay my T Mobile bill today and was told because of this new tax deal, my payment was $10 more, that is STRAIGHT GREED AND ROBBERY....TO HELL WITH THESE GREEDY BASTARDS.

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    13. $4.38 monthly increase on my end, but Page Plus couldn't even tell me why, so I did some research on my own and ended up here...ridiculous.

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    14. What do ya mean soon With the bullet Scam ....er i mean train They must shake every person living in CA for every last penny they can On top of breathing taxes and toilet to tap and the crooked LOS Angeles city council taking everything they can You'll now pay taxes for every channel on your TV pretty soon they will be the only ones to tax cause anyone who can is out of here Those that can't yet will be waiting to do so ASAP in time They wont have one to tax except them selves loosers they are

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  2. The politicians need their share of the pie. Mortgages on mansions, vacation homes, and expenses from extravagant lifestyle ain't cheap! SOMEBODY has to pay for their high cost-of-living.

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    1. Yes. the form of the golden rule that means those who rule get the gold. The already excessively wealthy and powerful rulers feel a need to further impoverish their subjects.

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  3. Sorry but I'am not going to report anything lol. Not paying tax and that all to it. I got Metropcs and its flat rate. 60 dollars unlimted everything.

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    1. That's not how it works. It automatically gets tacked on to your bill if you have a California billing address OR a California area coded mobile number. Only if you have neither are you on an honor system to pay it on your California state income tax return. As long as you declare an out of state residence on your California income tax return, its pretty hard to flag you for failure to pay. But if you have your tax forms or tax refund sent to a mailing address within California and have a mobile number of any area code as your phone contact, its quite easy to flag you for failure to pay.

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    2. This post is correct. Im in CA, and have the $50 Metro Promo unlimited plan. They sent a text, my bill will NOT go up Jan 1. Taxes and fees are already included. That is a sweeeeeeet plan.
      I also have Boost - but no such text from them yet.

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    3. I have Boost, just paid $5.71 in taxes.

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    4. Metro does not work in the mountains. My concern is that they say the tax can be 3.5 - 9.5 depending on the county. That is ridiculous... it should be the 3.5 that the company's were paying. My county (the greedy pigs) are charging the highest at 9.5 for the plans.

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  4. wow, the wireless provider (direct seller) gets to keep 2% of the taxes!

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    1. Only "sellers" (Target, 7/11, etc) get to keep 2%. Direct sellers (TracFone, Verizon, etc.) dont.
      "A seller of prepaid MTS (other than a direct seller), may retain 2% of the prepaid MTS surcharge collected as reimbursement for collecting the prepaid MTS surcharge." Source: Prepaid Mobile Telephony Services (MTS) Surcharge - Sellers.

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  5. Does this tax also apply to Straight Talk Home Phone users?

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  6. my $45 gophone plan could probably have as much as an extra $9 (maybe more?) tacked on for this prepaid mts tax. my guess is based on how there is about $1+ (more or less) in tax added on to $5 auto-pay on my ringplus. what you see ringplus doing in adding on the taxes is what people will probably see more & more of with the other mvnos. despite any caps on certain jurisdictional specific tax, the combined amounts for state & local city & federal etc will all add up into a ridiculous pile of tax crap that people will be shocked to see when they find out how much they have to pay. good god the nightmare bills with all the tacked on taxes & government fees from postpaid are now hitting prepaid.

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  7. Like most taxes, the state, counties and cities will not collect anywhere near what they expect. This will just drive purchases out of CA. Callingmart, Prepaidonline and other PIN dealers will be very happy.

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    Replies
    1. ...until they are forced to collect tax like Amazon is.

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    2. ....but that won't happen. Unlike Amazon, they don't have operations in many states. Just one.

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  8. If you look it isn't a real tax hike (many a small increase) but it's a underhanded rate hike. The state gets the same amount but the provider charges the same and gets to keep what they used to pay and you pay the tax on top.

    Look at who lobbied for it... the cell companies.

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  9. It's excessive greed by the ruling elite, to steal even more from the people.

    I hope you Californios all find a legal way to get around this.

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    1. is it the elite ruling or stupid Californians voting these idiots in? California will screw you every which way. Ask a trucker? If they don't have to come here they won't, especially the ones who own their trucks.

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    2. Do you really think we elect these people? No, they cheat their way in. http://www.davenettlesgospelmusic.com/vote-fraud.html

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    3. I'm sure some voter fraud occurs but the page you linked to presents the most absurd conspiracy theory I've ever seen.

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  10. It's not greed, it's just part of the need to tax everything the state and localities can tax in order to pay their high costs and debt. I'm surprised CA did not do this earlier. The high taxes needed to pay for poor fiscal policies, excessive concessions to state unions, regulatory excesses that burden businesses and massive waste in state spending have pushed many firms and high-wealth individuals to leave CA. It's accelerating, not declining. The CA legislature and most localities do not have the will to reduce the growth of spending, so CA taxes will continue to go up, forever. You can blame most of the CA people, too, for electing these people to run their governments. If there is greed, it's mostly from greedy voters who want all the free stuff promised by the CA politicians, who only care about keeping their power. They deserve each other.

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    1. Amen to that!! And who will pay the taxes on the free phones the state issues?

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    2. Tax the rich entertainment and leave the other rich alone. These hollywierdos come up with things that get pushed and the rest of us have to pay them with our smaller salaries. Not talking about this issue, but I am so sick of the rich always being attacked and being said that they need to be taxed more. I still stand firm with the entertainment field being taxed more because they have so much influence on what we end up paying for through silly ass legislation.

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  11. Wow I thought having a prepaid save me money, I use it text folks and friends now I have to pay taxes using this kind of service. Got RIP.

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  12. Replies
    1. Already happening. The wealthy pay most of the taxes.

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  13. Insanity! I hope this doesn't come to my State if it hasn't already. Dam socialists want to tax everything progressively to 100%. They don't want us to be able to survive.

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    1. " Dam socialists want to tax everything progressively to 100%. They don't want us to be able to survive."

      Yes. Socialism is all about enriching and empowering the rulers at the expense of the ruled. Socialism is the ideology of Hitler and Stalin, and of Assad and the dynasty in North Korea. It's the worst mistake of the last 120 or so years. Even past human rights catastrophes like the Spanish Inquisition or the "Burning Times" have death tolls that are like but a day of the rule of the large socialist regimes of the 20th century.

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  14. This is another example of two things:
    1. The fallacy of "states rights" where corporations and ultra conservatives lobby to impose breaks on corporations such as this new increase of cost to California prepaid phone users: The corporations lobbied (yes that means bribed and paid for the CA politicians to pass this new law). If the USA had one set of laws and not so much dependent on "states rights" open to the biggest corporation able to bribe their sweet special interest deal the USA would be better off. Starting to feel screwed huh?

    2. The power of corporations. The corporations got together (sort of like their own corporate union dont you think) to get passed their own benefit to now be able to KEEP the fees they used to pass to the states and local govts. The corporate union got a windfall now and so many users now get to pay it. Local govts and the state keep less now. Feel screwed yet?

    Yet so many ignorant users will blame the "politicians" when in reality the poor working slob was blind sided and never got a chance to give an opinion on this new change in CA law that allows the corporations to keep what they used to give to the states to further the operation of things like roads, bridges, street lights, schools, beaches etc.



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    1. Agree with your post. I blame the stupid politicians who passed the law that has no benefit to anyone but the corporate s and I blame us all to vote for or brought them into office.

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    2. Follow the money. Straight to the politicians.

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    3. Eee... that's a hard left conspiracy theory yout have going there. The truth of the matter is that this is wrongdoing by the politicians. Bashing the grossly overtaxed businesses is blaming more of the victims.

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  15. It looks like there is plenty of ignorance to go around. 1. States rights have nothing to do with lobbying or corporations; and 2. Lobbyists don't force politicians to do anything. They persuade. The politicians vote for tax breaks to attract and retain businesses; i.e., jobs, investment and the other taxes these will bring. CA has to compete with other states now, and it's getting harder every year given the high taxes and extra regulation in CA. Nevada, Arizona and Texas have taken a lot of corporate jobs away from CA; they and other states also attract high-income individuals to relocate. CA cannot fix its fiscal mess by withdrawing tax breaks for corporations. That will just accelerate the exodus.

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    1. Exactly. If California ends tax breaks and steals more from employers, they will force these employers to leave the state.

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  16. Anon Nov 14: So easy to place a name here.
    You think any of the prepaid firms are in CA?
    Stop believing the corporate double talk. Users will now pay $10 or more monthly and the firms (corporations) will keep it. See how sinister they bribe lobbied to he that. Your local govt and state will not get the $$ to maintain our towns and srvices.
    As I wrote: SCREWED!

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    1. Eee: you have it all wrong. Our local governments are rolling in record level tax revenues. But government worker unions and overpaid bureaucrats line their pockets first. Abolish government unions, for starters.

      Government should serve the people, not make those in government rich on stolen money.

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  17. It was nice while it lasted. Everything is taxable now. Hard to survive when the state keeps shooting you in the foot while telling you should walk faster.

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  18. MAYBE I WILL JUST NOT RENEW MY PREPAID CELL PHONE SERVICE FOR A MONTH OR 2 OR NOT AT ALL TO COMPENSATE FOR THE INCREASED COSTS?

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  19. Received a text message from page plus this morning announcing a10% tax on all prepaid airtime bought starting first of next year. It's happening...

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  20. just got a txt from Virgin saying the fee will be 15%!

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    1. The official rates haven't been published yet so I don't see how Virgin or PagePlus can say what they will be already.

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  21. true, i looked back at the text and the example provided was 15% so not sure if that is a sign of what they are expecting.... http://msg4u.us/dWSC3

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    1. Thanks for the link. 15% looks like an example. I hope the actual rate will be lower.

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  22. This is an example of tax the poor. The poor (or the thrifty or value seeker) look to prepaid to save money. I was all excited by my new $80 a month unlimited prepaid plan on Tmobile where I save 5% each month with Target red card to lower my bill to $76 or save more during the time Target has airtime on sale to get my bill to $72.

    I call t-mobile and they told me if I load-up my balance by a max of 6 months, then that balance will not be taxed. Now, I will look for a new plan -- either the $60 all you can eat at Metro or the $39.88 plan Walmart Family Plan. I would have switched earlier except I already loaded $40 of my $80 balance for this month.

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  23. 1. Use the Target Trick and stock up on airtime cards before the tax hits CA. Stack your Redcard debit card -5% with the -5% coupons you get for filling your prescriptions at Target, and save 10%. If that's too much work, 2. Sign up for a Callingmart account for a -1% rebate, and use their monthly coupon to save 3-10% more. Stock up on PINs now.

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    Replies
    1. Callingmart HQ is in Miami, and their web server is in Houston. No sales tax for CA residents.

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  24. Can't you just use an out of state address when purchasing airtime from an online vendor?

    Dale

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  25. Just so I'm understanding this correctly, the tax is being imposed at the point of sale on the refill? Or is it being added to the prepaid plan cost for the month directly from the carrier?

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    1. The point of sale is wherever you are separated from your money.
      If you auto pay your operator, the tax will be added to the auto pay price.
      If you buy PIN cards or PIN codes from a California based store, the tax will be added to the PIN price.
      If you are have a California billing address or a California phone number and you buy a PIN from a California based online seller the tax will be added to the price you pay for the PIN.

      Delete
    2. I know that's been the tradition in the past, but the text message wording seems to imply otherwise. "Free VZW Msg: See MTSnotice.com for info on new California surcharges starting January 1 when you add money to a prepaid service account." I read that last part as not when you are separated from your money, but when the money is added to the account. That would be just like California to break new ground on taxing you in new and fun ways ("surcharges" so they don't have to follow the rules for passing it as a "tax", convenient).

      Think of it another way: If you're California and you're looking for more great ways to collect money, would it be easier to do it from the myriad of different sources that sell airtime, or just demand it instead from a handful of carriers/MVNOs (and let them pass it on to the consumer, with a cut for their troubles)? Maybe I'm wrong and they'll continue to do things as before, but color me skeptical until I see it implemented.

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  26. I lived most of my 50 years of life without a cell phone and i always leavemine in the car and rarely use it so as far as i am concerned they can keep the dam phone and i will keep my taxes

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  27. i hate the dam phone anyways it keeps people from truely spending time together, i lived a long time without a cell phone and i am totally up for stepping back in time. my life would be a lot less stressful. and just for the record polititions should be a volunteer position not a paid one and life for the world would be a better place.

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    1. Exactly. Part time volunteer politicians.

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  28. One of the reasons I have dropped my Tracfone for a carrier. (Verizon.)

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  29. yeah the tax is currently paid by the operator. BUT you dont think when they make the prepaid costs that they dont take into account the taxes they have to pay? what should happen is a reduction in prepaid service price, and then tacking on the sales tax.

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  30. RIP prepaid services.

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  31. I'm surprised that California calls it a tax rather than a "FEE" where they collect more money illegally. Hear of a 'fire fee'. It's never ending here in California. They are working on property tax (Howard Jarvitz) trying to raise it by breaking it down one step at a time. Let's go after small business first and get that through by getting 2/3d's vote rather than seeing what the people in the state want.

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  32. Go with a free plan from RingPlus or FreedomPop and just stop paying for a mobile phone altogether.

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    Replies
    1. Good idea. Get a mobile hotspot. a cheap tablet like RCA android($40)and sign up for Google voice. Free calls all over us. Forget the mobile hotspot and make calls from McDonalds or Starbucks. A multitude of other places. Shouldn't be using cell while driving anywho. If you are paying hundreds for a smart phone, how smart is that?

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  33. I dont know how many others there are that are unemployed and barely able to make endsmeet but I dont have another five to ten dollars to help pay a tax to a state or nation with out of control spending on everything. I am also inclined to agree with the others who said I will just quit using my cell phone. that is a 40 dollar a month saving instead of spending more.

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    Replies
    1. Then don't spend $40 a month on it. If you have internet available to you you get by with little to no data. There are quite a few no data plans available for around $10 to $15 per month. We have home internet and two individual$13 a month cel phone plans. We dropped satellite TV.

      To anon @November 18, 2015 at 8:01 PM. I bet you had a landline phone for a lot of those years which probably cost a lot you more than one of today's low cost cellphone plans. Mine used to cost me about $80 a month. Personally I'd rather not go back in time.

      Dale

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    2. Andoulle said: " Corporate greed is small potatoes compared to government greed."

      I see you are civicaly informed.

      Delete
  34. Is this tax on prepaid minutes going to become a nationwide thing or just in California next year? I'm in MS and have a T-Mobile prepaid flip-phone I bought from Walmart 4 years ago; I would like to upgrade to a prepaid smart phone one day.

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    1. Most states already tax prepaid airtime. California was on of the few that didn't. If your state doesn't charge end users a tax on prepaid I'm sure the CTIA lobbyists will be there shortly to convince your state legislators they they should tax users instead of operators.

      Delete
  35. EDIT***make my above comment to Dee Horne November 18, 2015 at 8:11 PM not anon @ 8:01 PM

    Dale

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  36. The California government is awash in money, which it wastes flagrantly. There is absolutely no need for the government there to rob and further impoverish the people there.

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  37. Can someone explain this in simple terms for me?

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    Replies
    1. The post title does just that: "California To Tax Prepaid Airtime Starting Jan 1st"

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  38. Absolutely disgusting. Just another example of corporate greed. I will start buying PINs from out of state vendors to circumvent this. Screw you California!

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    1. I think you mean government greed. They're squeezing money out of prepaid phone users and giving nothing in return. At least the MVNO are providing something for what we pay, and we can opt out of paying if we don't want the service.

      Opt out of paying taxes because you're not getting good value for your money and see the real greed in America.

      Delete
    2. Yes. Government is where the real greed is: the rulers rob us at gunpoint so they can make millions and ride in free limos. Cut taxes, cut spending, confiscate the excessive pensions of public "servants" to return to taxpayers, and institute wage/compensation caps on government employees who right now do a lousy job and get paid $$$$ for it. The employees should serve us, not the other way around.

      Delete
    3. As a government worker, you worked for 40 years and were paid well in excess of the the fair wage for the work. Plenty of money to invest for retirement later. There's absolutely no good reason for the government to steal from working people and/or cut services in order to lavish out billions of dollars in unearned handouts to them after retirement.

      Excessive pensions for government "workers" are bankrupting governments all over.

      Delete
    4. The word you're looking for is kleptocracy.

      Delete
  39. Soooooo. What about buying airtime cards before Jan 1st? Just stock up?

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    Replies
    1. Me thinks that is just what they want you to do. Taxes will be paid but by the company. They get paid this year instead of when the service is used. Ok, indirectly by you anyway. I use my $40 tablet and make internet calls. What gets me is that most of the people that complain didn't think twice about plucking down $700 for their phone. My 6 year old Nokia cost $19. I prepay my account at minimum $10 for 100 minutes. Force myself to use it. Never too far away from internet connection and Google Voice. My preferred connection to the world. AT&T gave me such a great deal on Internet, I can afford the few bucks in taxes. I'm not a real fan of hidden taxes anyway.

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  40. I use a Virgin Mobile Broadband2Go wifi stick for traveling places where I do not have access to wifi. When I first bought it, I used it in CA while visiting elderly relatives who are in the 415 area code, so I got a 415 access number even though I live out of State. I've used that pay as you go USB stick on and off for a while. I got the notification from Virgin that this absurd tax was going into effect. I called them and had them change the access number for the USB device to a number close to my domicile. They had my billing info on file so they knew I was not a resident of CA. The Rep was very nice and said they were being flooded with calls about this.

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  41. I hate our greedy government. they should all be dumped, and start all over. I have virgin mobile, and a land line at home. I only use it to text family that moved away, or to call a store when I'm out to see if they are open. I pay them 20.00 every three months. it's cheap. no video, but that's why I bought a camera. it would be fun to have a cool cell, but I don't want to spend a hundred dollars a month on one. I always hold out until the very end. but virgin kind of screws you. I paid it two weeks early, so they changed the top up date so that it starts 2 weeks earlier than before. what a rip. they should R.I.P. dumb jerks. just because I paid it early, I got screwed out of 2 weeks. they all screw me. but then, that's what corporations and the government do. no wonder I hate them all. oh yeah, humana screws me too. yay

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  42. I bet if you buy a bunch of cards, they'll still tax you come jan. 1st. they...whoever 'they' are, will find a way. they'll make you an offer you can't refuse. in other words, we'll all lose. ;/
    jerks.

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  43. Maybe just move to another state. Or at least go get cards there. These efforts seem designed to encourage people not to live or purchase in the states where they are enacted.

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  44. i got a message from boost mobile the charge will be 15% how does this webpage says between 3.5 - 13% who s liying. i m tired of living in california it sucks so bad

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    1. No one is lying. This article was written before the tax rates were finalized. See California's New Tax on Prepaid Airtime Set At 9.260% to 18.260% for an update.

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  45. I live in a lower <10% MTS tax location in California but they wanted to charge me the >13% higher rate for my credit card address at a rented mailbox, so I went to a local 7-Eleven in a lower MTS tax jurisdiction and got the right (lowest) rate in a T-Mobile prepaid card. Over $15/year savings! MY money, not the government's!!!

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    Replies
    1. There is even more savings to be had buying online from Prepay Refill, Callingmart, etc.

      Delete
  46. I went last night to buy my $45 dollar straight talk card. I live in Northern California. I purchased it from Walmart and when it rang up I was told it would be $51.19. I was not aware of this new tax nor did straight talk inform me of it. I actually thought the woman screwed up when she rang me up. I asked her and she said that they now tax for it. I looked at my receipt and it taxed me at a rate of 13.760%. I asked why it was so much when taxes here are 7.500%. She honestly could not give me an answer. I think it's rediculous $6.19 tax..that ought to rack up some money for someone. Will be looking into other options now for phone service as I feel that straight talk should have let people know ahead of time and 51.19 for phone service with them is not worth it

    ReplyDelete
    Replies
    1. If you're using AT&T towers on straight talk you could always switch to Cricket. They have similar (or cheaper plans) with similar allotments with all taxes included.

      Delete
  47. Problem solved to bad California going to lose money on this buy your reload pins out of state thru a Freind or eBay and they stay at the same rate

    ReplyDelete
    Replies
    1. Yes. Anon: This law discourages you from doing business like this in California. So by all means use any legal methods to avoid wasting this money to pad the pockets of the state overlords.

      Delete
  48. So much for taking care of the little guy - the consumer. Thanks, California! CTIA, the mobile operators trade and lobby group win, and in my case, I am now paying $60 more per year with no benefit to me. Why is it that I have to pay my taxes and taxes for others such as the phone company too? Whoever sponsored this legislation and whoever voted for it (I am researching) will not get my vote in the future.

    ReplyDelete
    Replies
    1. Rich and powerful bureaucrats will get even richer, F1. That's the government game: to see how much they can steal from the public. This is an election year: hope for your own good you can see fit to vote in those who will cut the tax burden rather than make it even more excessive.

      Delete
    2. The California MTS tax is a boondoggle by the mobile operators to shift the tax burden from themselves to their customers. Legislators voted for it to keep operator contributions flowing into their campaigns. Corporate money in politics is the real problem.

      Delete
  49. Total cost for auto renewal is $53 in CA now

    ReplyDelete
  50. On Feb 3, 2016, AT&T charged me 15.16% tax ($3.79) on my regular, 3-month GoPhone refill of $25. I call that extortion!! A Class Action Lawsuit waiting to happen!

    AT&T, I hope you hear me loud and clear!!! You need to start appreciate 20-year customers or I'll take my biz elsewhere and will convince everyone around me to do the same!!

    Still no response to my direct msg tweets. But my friend just canceled his long-time account after much frustration at an AT&T store today. And so it begins...

    ReplyDelete
    Replies
    1. Your anger is misplaced. AT&T operates in California and has no choice but to follow the law and charge the tax.

      The blame for the regressive new California tax lies with the operators who lobbied for it, the California legislators who passed AB-1717 and the Governor who signed it.

      You can avoid paying the tax by buying airtime from out of state vendors like CallingMart.

      Delete
    2. I disagree in where the ultimate blame lies. The ultimate blame lies with the legislators, along with the idea of the divine right of those who rule to rob the ruled and meddle in their affairs.

      Non-corrupt and moral legislators would simply ignore the lobbyists no matter what they said or did.

      Delete
    3. +1. Companies ask for favors. Legislators who accept the lobbyist perks, favors and hints of benefits like employment after their "service" are the ones we should blame. They have the power to say "No" but they don't. Yet in every elections they claim to be "fighting for the people."
      We can see which people they are really fighting for By their actions.

      Delete
  51. I would like to know two things: 1. who voted for and against AB-1717 so I know how to vote in the future and can advise other voters; 2. is there (or who is going to start) a ballot initiative to overturn AB-1717. Just getting pissed won't change things around but we do have that power and should exercise it too.

    ReplyDelete
    Replies
    1. Here's the roll call for the final vote approving AB-1717: AB 1717 Assembly Bill - Vote Information. The only legislators to vote against AB-1717 were Ammiano, Donnelly, Fox, Stone and Yamada.

      Delete
  52. I live in LA. I am going to drive to Las Vegas Nevada and sign up for a new number there.These bastards are not going to take my money...

    ReplyDelete
    Replies
    1. What happens in Vegas stays in Vegas.

      Delete
    2. Then you will be robbed by the ridiculously over high gas taxes...

      Delete
    3. Depending on your cell phone carrier; you don't have to drive anywhere. If its Verizon, just choose a new phone number with the appropriate area code; and call their 800 number. They don't issue new ph#'s from the Verizon offices anyway.

      Delete
    4. I just got an update from Verizon; Which State tax they charge you is based on the address of the Credit/Debit card you use to pay your bill. Though I had an Arizona address; I was getting charged the CA tax rate. I just updated the address that was on file with Verizon, so that at least it is the AZ rate and not the CA rate. Its taken me several phone calls to correct this; in the meantime, I've paid CA tax rate since Jan. (for 3 mos). Good luck!

      Delete
    5. Just buy TopUp cards in NV. I am going to do whatever it takes to circumvent these taxes.

      Delete
    6. Great idea. I started doing the same with my income because of CA fiscal irresponsibility.

      Delete
  53. It took me a couple of months to find out why I had an increase of $6.64/mo on my pre-paid Verizon bill. Their (Verizon's) standard reply (since it comes under a 911 heading in their office), is that "It is for your protection". Nuts! Later this 'tax' was then shown to me. What particularly bad is that I don't live in California anymore. They(Verizon) are taxing me for having a phone with a 805 area code, even though I have an Arizona address. I have tried 3 months through their system to get a refund or get me off the California list, but to no avail. So as difficult as it has been, I have now changed my area code to the local are in Arizona, which I understand is only .60 cents a month. I've heard Nevada is tax free.

    ReplyDelete
    Replies
    1. I just received more information on this from Verizon (again - its taken me 3 mos and many calls). Turns out they were billing me from an old Credit/Visa Card I had on file with an old CA address. Even though I changed my Verison address (and area code of my phone#); it still didn't plug into their billing system. So now they are billing me the AZ new tax rate of $4.12; instead of the $6.64 CA rate. I haven't been able to verify for sure, but maybe Oregon and Nevada still have a very low rate? Anyway, Verizon says they apply the rate of the State based on the billing address of your Credit/Debit card that you pay with. Regardless of the area code of your ph# or address they have on file for you. Good luck!

      Delete
    2. The NV rate is very low, around 2%. I have a Boost account and for the first 4 months of this law I was charged the California tax rate, then for some reason they changed it and are charging me the Nevada tax rate. I have a California billing address but my phone has a Nevada area code.

      Delete
  54. Let me tell you how it will be
    There's one for you, nineteen for me
    California! Yeah, California.

    If you drive a car, I'll tax the street.
    If you try to sit, I'll tax your seat.
    If you make a call, I'll tax each greet.
    Social media? I'll tax your tweet!

    ReplyDelete
  55. JUST PAID t Mobile

    $100 prepaid

    $14.76 TAX !!!


    ...very angry

    ReplyDelete
  56. I bought a $35 Virgin Mobile prepaid card from CVS and was charged $5.86 surcharge, that 16.75% surcharge. OUTRAGEOUS!

    ReplyDelete
  57. Switch to an out of state carrier. No tax.

    ReplyDelete
  58. Im sorry to say but this is BS! Seriously now when I get a refill card it costs $50 for a $45 one. Unless I go directly to the phone dealer where they only charge me $3

    ReplyDelete
  59. I just bought a tracphone and airtime in Feb. Tax was a dollar something. Just bought more minutes and the tax was 16%! I'm a senior I need a break that's why I dropped ATT. They said $ goes toward 911 and "telecommunications". We already pay for these things. Double tax and taxation without representation!

    ReplyDelete
  60. I just refilled more minutes to my t-mobile prepaid card worth of $10.00, and I was charged 23.1% or $2.31 MTS fee. I was totally in shock that as if I was paying income tax rate. I am living in SF.

    ReplyDelete
  61. I use Simple Mobile $40 plan and with auto re-up it's $37.50. I'm being charged $44.99 every month. $7.50 which is frigging 20% in taxes!!!

    ReplyDelete
  62. This is complete and utter BS. Yet another deceptive practice for California to stick a hand directly into everyone's pocket. Tax after tax after tax. I'm sure soon we'll see a tax for the tax. The people that are being taxed need to see exactly where every single penny is being spent and if it indeed is going where it they say it's going with detail. We need to also have the say on how the tax is spent.

    ReplyDelete
  63. Yeah, San Francisco charges 23.1%, the highest in the state. Just another cash cow for this corrupt city government to milk. I just bought a year's worth of prepaid time in NV on my last trip over there. NO tax, saved almost $100.

    ReplyDelete
    Replies
    1. Good idea. I bought a years worth of TopUp cards for Virgin Mobile in California on DEC 31, 2015. I plan to do the same thing when my TopUp cards run out. Prepaid phone accounts are cool too, because they give you privacy and keep you icognito.

      Delete
  64. I live in Los Angeles, CA and NO TAXES was a big reason why I converted from postpaid Sprint to prepaid Virgin back in FEB 2014. On Dec 31 2015 I bought $385 worth of TopUP cards at the grociers. Going forward I will buy TopUp cards at Las Vegas whenever I'm there. The lobbyist pushed for this not only to make more money off prepaid but to dis-incentivise reasons to switch to prepaid!

    ReplyDelete
  65. Taxed behavior is discouraged behavior.

    ReplyDelete
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