911 Prepaid Wireless Emergency Service Fee
Frequently Asked Questions
- When was the 9-1-1 prepaid wireless emergency service fee created?
- House Bill 1831, enacted by the 81st Legislature in 2009, created the 9-1-1 Prepaid Wireless Emergency Service Fee.
- Where can I find a copy of the 9-1-1 Prepaid Wireless Emergency Service Fee law?
- The controlling statutes are located in the Health and Safety Code, Sec. 771.0712.
- What is a prepaid wireless telecommunications service?
- A prepaid wireless telecommunications service means a mobile telecommunication service that is paid for in advance and allows a person to access 9-1-1 emergency communication services.
- Who is required to register to collect and remit the fee?
- Beginning June 1, 2010, if you make retail sales of prepaid wireless telecommunications services for use in Texas, you must register to collect the fee from customers at the time of, and with respect to, each retail transaction of prepaid wireless telecommunications services occurring in Texas.
A prepaid wireless telecommunications service does not include the sale of a service in which the consumer enters into a written contract with the seller that obligates the consumer to use the service for a specified period of time, and there may be severability penalties associated with the consumer's failure to meet the requirements of the contract. This service is subject to the wireless 9-1-1 emergency service fee imposed under Health and Safety Code, Sec. 771.0711.
The requirement to register as a retail seller of prepaid wireless telecommunications services applies to individuals as well as corporations, firms, partnerships and all other legal entities.
- How do I register to collect and remit the fee?
- If you received a letter from our office in April or June 2010 concerning the fee, you were automatically set up to collect and remit the fee. If you do not sell prepaid wireless telecommunications services, you were asked to complete the box at the bottom of the letter and return the letter to this office so that we can update our records.
Otherwise, you register by completing and submitting the Texas Application for Sales and Use Tax Permit (Form AP-201)(PDF, 338KB). A seller's registration number for purposes of collecting the fee will be the same as the seller's sales and use tax permit number. You can also obtain an application by calling (800) 252-5555 or (512) 463-4600.
- How much is the fee?
- The fee is 2 percent of the purchase price of each prepaid wireless telecommunications service purchased in person, by telephone, over the Internet or by any other method, or used by a seller in Texas.
- Who is required to file the Texas Prepaid 9-1-1 Wireless Emergency Service Fee Report?
- Any person who sells prepaid wireless telecommunications services, or who uses their own prepaid wireless telecommunications services, must file the Texas Prepaid 9-1-1 Wireless Emergency Service Fee Report (Form 54-104)(PDF, 172KB) and remit the fees due.
- When do I file the report?
- The report is filed quarterly and is due on the 30th day following the end of the quarter in which the fee was collected.
Since the effective date of June 1, 2010, for the new fee does not coincide with the quarterly filing period, any fees collected in June 2010 will be reported and paid on or before July 30, 2010. Reports must be filed even if no fee is due.
- If I do not owe any fee, do I still file a report?
- Yes. You must file a report even if you have no sales of prepaid wireless service, or use for the reporting period, or if all your sales are nontaxable.
- How do I pay the fee that is due?
- You have several payment choices. You can:
- pay by mail, make a check or money order payable to the Texas Comptroller of Public Accounts;
- pay by Electronic Funds Transfer; or
- pay through WebFile with a credit card or bank draft.
- What if I am buying the prepaid wireless telecommunications services for resale?
- If you are buying prepaid wireless telecommunications services for resale, you may furnish the seller a properly completed Texas Sales and Use Tax Resale Certificate (Form 01-339)(PDF, 76KB).
A taxable prepaid wireless telecommunications service that is purchased for resale is exempt from the fee if the resale is properly documented. If you sell a taxable prepaid wireless telecommunications service to a customer, you must collect the fee unless you accept a properly completed resale certificate. The resale certificate is proof that the taxable service was purchased for resale. The certificate must include certain specific information.
Evidence that a purchaser is registered with the Comptroller's office to collect the fee is not sufficient to relieve the seller from the responsibility for collecting the fee without the issuance of a properly completed resale certificate.
- Who qualifies as a consumer exempt from the fee?
- The fee is not collected from agencies and departments of the United States government or the state of Texas. A person operating under a contract with the federal government or state of Texas is not exempt from the fee.
- Am I required to show the fee on the sales invoice that I give the consumer?
- Yes. The amount of the fee must be separately stated on the invoice, receipt or other similar document that is provided to the consumer by the seller.
- What are some examples of prepaid wireless telecommunications services?
- Cellular phones preloaded with minutes or units of air time, or sold with rebates for airtime.
- Calling cards for cellular phones preloaded with minutes or units of air time.
- The recharging of a reusable cellular phone calling card or the cellular phone itself with additional minutes or units of air time.
- Is the sale of a telephone prepaid calling card subject to the fee?
- No. A telephone prepaid calling card is a card or other item, including an access code, that represents the right to access certain telecommunications services that can be accessed through multiple devices, regardless of the network providing direct service to the device used (i.e., calling cards for discount long distance services). A telephone prepaid card can be used with a pay phone, landline phone or a cell phone. A prepaid calling card is considered tangible personal property and is subject to sales tax but not subject to the prepaid wireless 911 fee.
Comparatively, a prepaid wireless telephone card has access to only a specific network, or is intended for use with a specific user account or device.
- Does the fee apply to the initial purchase of a cell phone activated in the store for prepaid service, such as Cricket, Boost or Virgin Mobile?
- Yes. The fee will apply. If the transaction is a lump sum amount, the entire amount is subject to the fee. If the transaction is separated so that the charge for the phone is separated from the charge for the prepaid wireless service, only the charge for the prepaid wireless service will be subject to the fee. Both transactions are subject to sales tax.
- Does the fee apply to the airtime associated with the purchase of a cell phone activated in the store for prepaid service?
- The fee will apply if the airtime is for prepaid wireless service.
- Does the fee apply to an activation fee associated with the purchase of a prepaid phone?
- Yes. The fee will apply.
- Are charges for accessories like chargers, cases, memory cards and cables, if not included in the price of the prepaid wireless service, subject to the fee?
- A separate purchase of items like chargers, cases, memory cards and cables are not subject to the fee. Sales tax does apply to the sales price of those items.
- Is the purchase of a phone not activated but capable of prepaid service subject to the fee?
- The sale of a phone with no minutes and not activated is not subject to the fee. Sales tax does apply to the sales price of those items.
- Does the fee apply to a replacement phone sold to a person and activated on their existing prepaid service?
- The sale of a replacement phone that is activated on an existing prepaid service is not subject to the fee as long as no additional prepaid minutes are added. Sales tax does apply to the sales price of the replacement phone.
- Are prepaid service airtime refill cards, like the ones sold at gas stations, grocery stores and other retail outlets, subject to the fee?
- The sale of prepaid service airtime refill cards is subject to the fee.
- Does the fee apply to prepaid monthly service plans, such as Cricket, Boost or Virgin Mobile, when a customer pays their bill?
- Prepaid monthly service plans are subject to the fee.
- If a prepaid wireless telecommunications service provider that sells prepaid wireless service at retail has their rate plans set up for either postpaid or prepaid, is the prepaid version of these plans also subject to the fee?
- The prepaid version is subject to the fee. Wireless telecommunications services not prepaid are subject to the wireless 9-1-1 emergency fee imposed under Health and Safety Code, Sec. 771.0711.
- Is the fee due if a retailer of prepaid wireless telecommunications services provides free wireless service to its employees?
- Yes. While the prepaid wireless service is not actually sold at retail, the service is used by a person in Texas, and the retailer is liable for paying the fee when the prepaid service is removed from inventory for use by an employee.
- If a consumer purchases a prepaid wireless calling card at retail and then donates the card to a high school booster club that in turn sells the card to the highest bidder at auction, is the fee due more than once?
- A retail sale occurs when the prepaid calling card is purchased from the retailer. The fee is collected by the retailer from the purchaser. When the card is donated to the booster club there is no sale, and the fee is not applicable. When the booster club auctions the prepaid calling cards to the highest bidder, a retail sale has not occurred and the fee is not applicable.
For purposes of sales tax, a second sales transaction has occurred when the booster club sells the card to the highest bidder at the auction and applicable sales tax is due on the sale.