list of rates for California's new "Mobile Telephony Services" (MTS) tax on prepaid airtime which goes into effect January 1, 2016. The tax is composed of a state portion of 9.260 and a local tax which can be as high as 9%. That means that the total tax will be between 9.260% and 18.260% depending on your city, town or county.
The tax is charged at the point of sale. All brick and mortar retail businesses are required collect it at the rate that's in effect in the locality where the sale occurs. Online business, including the national mobile operators, Walmart.com and TracFone, that operate in California are required to collect the tax from California residents based on their billing address or phone number.
In the majority of localities, including most of the San Francisco Bay Area, the rate is 9.260%. Los Angeles residents aren't so lucky with many LA County cities charging the maximum of 18.260% including Culver City, Hollywood, Santa Monica, Venice and the City of Los Angeles. Los Angelites looking to save on airtime might want to buy their airtime cards in West Hollywood, Signal Hill, City of Industry, Gardena or a number of other LA County cities where the tax rate is "only" 9.260%.
Although I'm sure this post will get lots of comments blaming the new tax on greedy bureaucrats, the real culprits are greedy mobile operators and their influence on legislators. The taxes that make up the new MTS Surcharge are not new, they have been around for years but until now they were collected directly from the mobile operators as business taxes. The operator's CTIA trade and lobbying body sponsored and pushed AB-1717, the bill that authorized moving the taxes from the operators to end users. The change means a massive windfall for the operators at the expensive of consumers. It would be nice if the operators passed at least some of that savings on to customers but I'd be surprised it that happens.
As far as I know, MVNOs that don't have offices in California like Airvoice and non-California prepaid airtime vendors like Callingmart.com and WirelessRefill.com are not subject to California tax rules and won't be collecting it.
Image: Alec - Mr. Money Bags by aisletwentytwo
Related post: California To Tax Prepaid Airtime Starting Jan 1st