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Business Taxes Law Guide—Revision 2024
Prepaid Mobile Telephony Services Surcharge Collection Act
Revenue and Taxation Code
Division 2. Other Taxes
Part 21. Prepaid Mobile Telephony Services Collection Act
Chapter 1. General Provisions an Definitions
- 42001 Title [Repealed.]
- 42002 Legislative findings and declarations [Repealed.]
- 42004 Definitions [Repealed.]
42001. Title. [Repealed. Became inoperative January 1, 2020 pursuant to the provisions of Ch. 885, Stats. 2014.]
Text of Section Inoperative as of January 1, 2020
This part is known, and may be cited, as the Prepaid Mobile Telephony Services Surcharge Collection Act.
History—Added by Stats. 2014, Ch. 885 (AB 1717), in effect September 30, 2014.
42002. Legislative findings and declarations. [Repealed. Became inoperative January 1, 2020 pursuant to the provisions of Ch. 885, Stats. 2014.]
Text of Section Inoperative as of January 1, 2020
The Legislature finds and declares all of the following:
(a) Maintaining effective and efficient communications services, 911 emergency systems, communications-related public policy programsto promote universal service, and various local programs across the state benefits all persons with access to the telecommunicationssystem.
(b) Providers of end-use communications services, including providers of mobile voice telecommunications services, which the Federal Communications Commission terms mobile telephony service, are required to collect and remit communications taxes, fees, and surcharges on various types of communication service revenues, as provided by existing state or local law.
(c) Consumers purchase prepaid mobile telephony services at a wide variety of retail locations and other distribution channels, as well as through service providers.
(d) Prepaid mobile telephony services are an important and growing segment of the communications industry. Prepaid mobile telephony services are often the only means by which persons with low incomes can obtain limited access to the telecommunications system.
(e) To ensure equitable contributions from end-use consumers of postpaid and prepaid mobile telephony services in this state, there should be standardization with respect to the method used to collect communications taxes, fees, and surcharges from end-use consumers of prepaid mobile telephony services.
(f) Prepaid mobile telephony services are frequently sold by a third-party retailer that is not the provider of mobile telephony services, and collecting taxes, fees, and surcharges from prepaid consumers of mobile telephony services at the time of the retail transaction is necessary and the most efficient and competitively neutral means of collection.
(g) An equitable distribution mechanism is necessary to ensure that utility user taxes and other telecommunication charges are collected on behalf of cities and counties and are properly distributed to those jurisdictions.
History—Added by Stats. 2014, Ch. 885 (AB 1717), in effect September 30, 2014.
42004. Definitions. [Repealed. Became inoperative January 1, 2020 pursuant to the provisions of Ch. 885, Stats. 2014.]
Text of Section Inoperative as of January 1, 2020
For purposes of this part, the following terms have the following meanings:
(a) "Board" means the State Board of Equalization.
(b) (1) "Direct seller" means a prepaid MTS provider or service supplier, as defined in Section 41007, that makes a sale of prepaid mobile telephony services directly to a prepaid consumer for any purpose other than resale in the regular course of business. A direct seller includes, but is not limited, to any of the following:
(A) A telephone corporation, as defined by Section 234 of the Public Utilities Code.
(B) An interconnected Voice over Internet Protocol (VoIP) service, as defined in Section 285 of the Public Utilities Code.
(C) A retailer, as defined by Section 6203, that is a member of the same commonly controlled group, as defined in Section 25105, or that is a member of the same combined reporting group, as defined in paragraph (3) of subdivision (b) of Section 25106.5 of Title 18 of the California Code of Regulations, as an entity described in subparagraph (A) or (B).
(2) For purposes of this subdivision, "sale" means any transfer of title, possession, exchange, or barter, conditional or otherwise.
(c) "Emergency telephone users surcharge" means surcharges authorized pursuant to the Emergency Telephone Users Surcharge Act (Part 20 (commencing with Section 41001)) to be collected from prepaid consumers of mobile telephony services.
(d) "In this state" means within the exterior limits of the State of California and includes all territory within those limits owned by or ceded to the United States of America.
(e) "Local charges" means those charges described in subdivision (a) of Section 42101.
(f) "Local jurisdiction" or "local agency" means a city, county, or city and county, which includes a charter city, county, or city and county.
(g) "Mobile data service" has the same meaning as defined in Section 224.4 of the Public Utilities Code.
(h) "Mobile telephony service" or "MTS" has the same meaning as defined in Section 224.4 of the Public Utilities Code.
(i) "Person" includes any individual, firm, partnership, joint venture, limited liability company, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, assignee for the benefit of creditors, trustee, trustee in bankruptcy, syndicate, the United States, this state, any city, county, city and county, municipality, district, or other political subdivision of the state, or any other group or combination acting as a unit.
(j) "Prepaid consumer" means a person who purchases prepaid mobile telephony services in a retail transaction.
(k) "Prepaid mobile telephony services" means the right to utilize a mobile device for mobile telecommunications services or information services, including the download of digital products delivered electronically, content, and ancillary services, or both telecommunications services and information services, that must be purchased in advance of usage in predetermined units or dollars. For these purposes, "telecommunications service" and "information service" have the same meanings as defined in Section 153 of Title 47 of the United States Code.
(l) "Prepaid MTS provider" means a telephone corporation, pursuant to Section 234 of the Public Utilities Code, that provides prepaid mobile telephony services.
(m) "Prepaid MTS surcharge" means the surcharge that consists of the emergency telephone users surcharge and the Public Utilities Commission surcharges, as calculated pursuant to subdivision (b) of Section 42010, that is required to be collected by a seller from a prepaid consumer.
(n) "Public Utilities Commission surcharges" means surcharges authorized by the Public Utilities Commission to be billed and collected from end-use consumers of wireless communications services, and of which the commission provides the board with notice pursuant to Section 319 of the Public Utilities Code, including:
(1) The California High-Cost Fund-A Administrative Committee Fund program surcharge (Section 275.6 of the Public Utilities Code).
(2) The California High-Cost Fund-B Administrative Committee Fund program surcharge (Section 739.3 of the Public Utilities Code).
(3) The Deaf and Disabled Telecommunications Program Administrative Committee Fund surcharge (Section 2881 of the Public Utilities Code).
(4) The California Teleconnect Fund Administrative Committee Fund program surcharge (Section 280 of the Public Utilities Code).
(5) The California Advanced Services Fund program surcharge (Section 281 of the Public Utilities Code).
(6) The Moore Universal Telephone Service Act (Article 8 (commencing with Section 871) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code).
(7) Public Utilities Commission reimbursement fees imposed pursuant to Chapter 2.5 (commencing with Section 401) of Part 1 of Division 1 of the Public Utilities Code.
(o) "Retail transaction" means the purchase of prepaid mobile telephony services, either alone or in combination with mobile data or other services, from a seller for any purpose other than resale in the regular course of business. For these purposes, a "purchase" means any transfer of title or possession, exchange, or barter, conditional or otherwise.
(p) "Seller" means a person that sells prepaid mobile telephony services to a person in a retail transaction.
History—Added by Stats. 2014, Ch. 885 (AB 1717), in effect September 30, 2014.