California – Beginning January 1, 2016 Prepaid Mobile Telephony Services Surcharge

SALT Report 3765 – The California Board of Equalization released Operations Memo 1194 on December 10, 2015. The Memo explains the new surcharge to be imposed on consumers that will be collected by retailers of mobile telephony services. Mobile telephony services include:

“All prepaid wireless services and plans that customers purchase in predetermined units or dollars prior to using the service are subject to the prepaid MTS surcharge. The surcharge generally applies to:

• Prepaid wireless airtime cards,

• Prepaid wireless cards compatible with pay-as-you-go cell phones,

• Prepaid wireless minutes,

• Prepaid wireless plans,

• Prepaid wireless refill or top-off cards,

• Prepaid SIM cards (with minutes/airtime),

• Prepaid wireless “e-Cards”,

• Prepaid mobile data or any other services when sold with any of the above,

• Any product or service (except a cell phone), when sold with prepaid MTS for a single non-itemized price, and

• A cell phone sold with prepaid MTS for a single non-itemized price, unless only a minimal amount of prepaid MTS is transferred. A minimal amount of prepaid MTS is $5 or less, or 10 minutes or less.

For further Information:

Operations Memo 1194 December 10, 2015