Home - , - California BOE Releases New Prepaid Mobile Telephony Service Surcharge Rates

California BOE Releases New Prepaid Mobile Telephony Service Surcharge Rates

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A few months ago, the California Board of Equalization implemented a new "Mobile Telephony Services" (MTS) Tax on prepaid airtime. The tax is composed of a 9.260 state portion and a local tax of up to 9%. Because of this, the total tax ranges from 9.260% and 18.260% depending on the city, town or county.The California Board of Equalization has announced that the new surcharge rates for certain cities will take effect starting April 1, 2016.

Here are the new surcharge rates:

Alameda County
  • City of Oakland - 16.760%
Imperial County
  • City of Holtville - 13.760%
Los Angeles County
  • City of Covina - 14.760%
  • City of South Pasadena - 16.760%
 Monterey County
  • City of Greenfield - 11.760%
Sacramento County
  • City of Rancho Cordova - 11.760%
San Francisco County
  • City of San Francisco - 23.060%
Santa Clara County
  • City of Cupertino - 10.760%
  • City of Mountain View - 11.760%
Yolo County
  • City of Winters - 18.260% 
Based on the new surcharge rates, the City of San Francisco has the highest rate of 23.060%, followed by the City of Winters at 18.260%, and both cities of South Pasadena and Oakland at 16.760%. The lowest surcharge rate is City of Cupertino with only 10.760%.

Retail sellers (excluding telecommunication service suppliers) may file for their prepaid MTS return online and pay due amounts to the BOE starting Apri 18, 2016. The return for the reporting period of January 1, 2016 until March 31, 2016 will be due on April 30th. But since this day falls on a Saturday, the filing of returns has been extended to May 2nd.


Source: BOE.ca

16 comments:

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  1. So this is charged on plans sold to customers in CA and prepaid airtime cards? What if you buy something like the annual RedPocket plan?

    ReplyDelete
    Replies
    1. California based companies (Red Pocket is based in California) are required to collect the MTS fee on all airtime sales, including annual plans, sold to California customers.

      Delete
  2. Replies
    1. On April Fools day
      April 1, 2016.

      City of San Francisco - 23.060%

      SWEET CHRISTMAS!!!

      A Boost mobile $30 plan will now add $6.90 in "fees" taxes

      Delete
  3. Callingmart a workaround?

    ReplyDelete
  4. What about cities not listed?
    Is it based on companies or customer's city?
    Non-CA based company not required to collect?

    ReplyDelete
    Replies
    1. The original list of tax rates for all cities and counties is here: Prepaid Mobile Telephony Services (MTS) Surcharge Rates - California State Board of Equalization.

      If you buy airtime online at a physical store the tax rate is based onthe store's location.
      If you buy airtime online the seller cn bae the tax ratethe based your credit or debit card or PayPal etc. billing address or your phone number.

      Companies and stores that operate in California are required to collect the tax.

      Delete
  5. I've never been upset with the government before, but with all these surcharges, fees, and tax increases, I can see why many people are increasingly angry with the government.

    ReplyDelete
    Replies
    1. What do you think pays for 911 and other stuff? Taxes on phones. That includes landlines, and both prepaid and postpaid cell phones....

      Delete
  6. All should realize that this is the result of the wireless industries successful "lobbying" of California politicians to transfer the tax payment to the retail consumer from them.

    This is not a new tax, the wireless provider was paying it before, they lobbied themselves a backdoor raise in rates by transferring the tax to the retailers/end user.

    ReplyDelete
  7. What about Cricket, MetroPCS etc. which used to have "all-in" pricing?

    Will they just absorb these costs? Were they already doing so, and will continue as is?

    ReplyDelete
    Replies
    1. MetroPCS, Pure TalkUSA and Cricket prices still include all taxes. I don't think their are any other operators that include all taxes in the plan price.

      Delete
  8. Dennis, are there any other states contemplating these taxes?
    Also, what are your predictions on how this will affect the prepaid industry?

    ReplyDelete
  9. Most, possibly all, states have long taxed mobile airtime with either a sales tax or a special tax like the CA MTS or both. California was actually one of the last states to start taxing airtime It was tax free until 1/1/16

    ReplyDelete
  10. I thought the upper limit was about 18%. How does San Francisco gets to 23%? I'm sure other CA cities will try to follow their lead.

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