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Business Taxes Law Guide—Revision 2024
Emergency Telephone Users Surcharge Regulations
Title 18. Public Revenues
Division 2. California Department of Tax and Fee Administration—Business Taxes (State Board of Equalization – Business Taxes, See Chapters 6 and 9.9)
Chapter 5.5. Emergency Telephone Users Surcharge Law
Article 1. Imposition of Surcharge
Regulation 2401
Regulation 2401. Definitions.
Reference: Sections 41007, 41011, 41015, 41016, 41021, and 42004, Revenue and Taxation Code.
(a) Service Supplier.
(1)"Service Supplier" means both of the following:
(A) Any person supplying intrastate telephone communication services to any service user in this state and providing access to the "911" emergency system by utilizing the digits 9-1-1; and
(B) Any person supplying Voice over Internet Protocol (VoIP) service to any service user in this state and providing access to the "911" emergency system by utilizing the digits 9-1-1.
(2) Notwithstanding paragraph (1):
(A) Where intrastate telephone communication services are supplied through a prepaid telephone calling card, the "service supplier" means the person that provides access to its lines and switches for telephone services and is responsible for deducting the amounts charged for telephone services used from amounts of service available on the prepaid telephone calling card.
(B) A wholesaler or retailer of prepaid telephone calling cards is not a service supplier unless it provides access to its lines and switches for telephone services and is responsible for deducting the amounts charged for telephone services used from amounts of service available on the prepaid telephone calling card.
(b) Intrastate Telephone Communication Services. "Intrastate telephone communication services" means all local or toll telephone services where the point or points of origin and the point or points of destination of the services are all located in this state. It includes the access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radiotelephone stations constituting a part of a local telephone system and any facility or service provided in connection with local telephone service. It also includes either:
(1) A telephonic quality communication for which there is a toll charge for the service that varies in amount with either the distance or elapsed transmission time, or the distance and elapsed transmission time, of each individual communication; or
(2) A service which entitles the subscriber, upon payment of a periodic charge (whether a flat charge or a charge based upon total elapsed transmission time), to the privilege of a predetermined amount of units or dollars of telephonic communications or an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radiotelephone stations in a specified area which is outside the local telephone system area in which the station provided with the service is located.
(c) Billing Agent. "Billing Agent" shall mean any person that submits a bill to a service user on behalf of another person who is a service supplier, reseller or billing aggregator. A billing agent is not considered to be a service supplier for intrastate telephone communication services provided by or billed on behalf of that person.
(d) Billing Aggregator. "Billing Aggregator" shall mean any person engaged in the business of facilitating the billing and collection of charges for intrastate telephone communication services by aggregating the information about telephone communication services provided by one or more service suppliers and submitting the combined information to one or more local exchange carriers for billing and collection. The billing aggregator may contract with service suppliers to:
(1) receive call information detail from one or more service suppliers and submit that call information detail to one or more local exchange carriers acting as billing agents;
(2) receive payments from local exchange carriers acting as billing agents for disbursement as directed by service suppliers; and
(3) prepare and file returns and remit the surcharge to the Board in the manner provided in the applicable contract.
A billing aggregator shall identify all service suppliers on whose behalf it will prepare and file returns at such time and in such form as the Board requests.
(e) Prepaid Telephone Calling Card. "Prepaid telephone calling card" means any card, or other identifier such as an authorization number or access code, which is purchased in advance of use of telephone services, and entitles the holder of the card or user of the authorization number or access code to a specified dollar amount or number of minutes of telephone service, where dollar amounts or minutes for telephone services used are deducted from the amount of prepaid service available on the prepaid telephone calling card as local and long distance telephone services are provided to the user of the prepaid telephone calling card.
(f) Mobile Telephony Service. "Mobile telephony service" or "MTS" has the same meaning as defined in section 224.4 of the Public Utilities Code.
(g) Prepaid Mobile Telephony Services. "Prepaid mobile telephony services" or "prepaid MTS" means the right to utilize and/or access 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 and are utilized by means of a mobile device. 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.
(h) Direct Seller. "Direct seller" means a prepaid MTS provider or service supplier, as defined in Revenue and Taxation Code section 41007, that makes a sale of prepaid MTS directly to a prepaid consumer for any purpose other than for resale in the regular course of business.
A direct seller includes, but is not limited, to any of the following:
(1) A telephone corporation, as defined by section 234 of the Public Utilities Code.
(2) A person that provides "interconnected Voice over Internet Protocol (VoIP) service," as that term is defined in section 285 of the Public Utilities Code.
(3) A "retailer engaged in business in this state," as defined by Revenue and Taxation Code section 6203, that is a member of the same commonly controlled group, as defined in Revenue and Taxation Code 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 paragraph (1) or (2).
History—Adopted April 6, 1977, effective July 1, 1977.
Amended April 1, 1997, effective October 1, 1997. Added subsection (c).
Amended January 5, 2000, effective May 27, 2000, added (d) Billing Aggregator.
Amended July 26, 2000, effective November 1, 2000, revised definition of Service.
Amended January 27, 2010, effective March 30, 2010. Created a new subdivision (a)(1) and renumbered prior subdivision (a)(1) and (2) as subdivision (a)(2)(A) and (B), respectively. Replaced "any person supplying intrastate telephone communication services to any service user in this state, provided however:" with "both of the following: (A) Any person supplying intrastate telephone communication services to any service user in this state and providing access to the "911" emergency system by utilizing the digits 9-1-1; and (B) Any person supplying Voice over Internet Protocol (VoIP) service to any service user in this state and providing access to the "911" emergency system by utilizing the digits 9-1-1." after "means" in new paragraph (1) of, added "(2) Notwithstanding paragraph (1):" at the beginning of new paragraph (2) of, and changed paragraphs "(1)" and "(2)" to subparagraphs "(A)" and "(B)" of paragraph (2) of, new subdivision (a). Added "either:" after "includes", replaced "a" with "(1) A" before "telephonic quality", added "for the service" after "a toll charge", replaced "which varies in amount with the distance and elapsed transmission time" with "that varies in amount with either the distance or elapsed transmission time, or the distance and elapsed transmission time," before "of each", and replaced "as well as" with "; or" after "communication" in new paragraph (1) of, replaced "a" with "(2) A" before "service which", added a space between "transmission time)," and "to the privilege of", added "a predetermined amount of units or dollars of telephonic communications or" after "the privilege of" in new paragraph (2) of, subdivision (b). Added ", 41015, 41016," to the reference note.
Amended January 26, 2016, effective July 1, 2016. The amendments added new subdivisions (f), (g), and (h) and added a reference to Revenue and Taxation Code section 42004 to the regulation's reference note.