Tax Guide for Sellers of Prepaid Mobile Telephony Services (MTS) and Telecommunication Service Suppliers
New Information: Effective January 1, 2023, a new 988 surcharge is imposed on:
- Each access line for each month or partial month for which a service user subscribes with a service supplier.
- Each retail purchase of prepaid mobile telephony services in California.
Assembly Bill 988 (Stats. 2022, ch.747) revises the Emergency Telephone Users Surcharge Act to include the 988 surcharge and establishes a new 988 State Suicide and Behavioral Health Crisis Services Fund. It sets the amount of the 988 surcharge at $0.08 for each access line/retail transaction for calendar years 2023 and 2024. On October 1, 2024, the California Governor's Office of Emergency Services (CalOES) will determine the surcharge rate for 2025, and each October 1st thereafter CalOES will determine the surcharge rate for the following calendar year.
We will continue to provide updates in this guide. We will also release a special notice regarding the surcharge rates and return filing requirements.
We recognize understanding tax issues related to your business can be time-consuming and complicated. We want to help you get the information you need so that you can focus on starting and growing your business as a seller of prepaid Mobile Telephony Services (MTS) or as a telecommunication service supplier (service supplier).
This guide provides you with general information regarding the collection, reporting, and paying of the Emergency Telephone Users Surcharge which includes the 911 surcharge and 988 Surcharge. If you are a seller of prepaid MTS, this guide will also provide you with information about your additional requirement to collect local charges.
The collection requirements differ between sellers of prepaid MTS and telecommunication service suppliers:
Sellers
If you are a seller of prepaid MTS, that is, you sell prepaid wireless services (prepaid MTS) to consumers in retail transactions, our section entitled Sellers will provide additional details about your collection requirements of the 911 and 988 Surcharges and any local charges which you may also be required to collect.
Telecommunication Service Suppliers (Service Suppliers)
If you are a telecommunication service supplier (service supplier) who is required to be registered with the California Public Utilities Commission, please see our Telecommunication Service Supplier section for information about your collection requirements.
How the revenue is used
Revenues from the 911 and 988 surcharges are deposited into the State Emergency Telephone Number Account and the 988 State Suicide and Behavioral Health Crisis Services Fund, respectively, and used by the Office of Emergency Services. The funds collected support the costs of installing, administering and supplying communication services for the 911 emergency communication system and the 988 Suicide and Crisis Lifeline.
How to use this guide
See the Seller section for information and requirements for sellers of prepaid MTS, other than direct sellers.
See the Telecommunication Service Suppliers section for information and requirements for direct sellers.
See the 911 Surcharge, 988 Surcharge, and Local Charge Rates section for links to the current rates and other rate information.
See the Local Jurisdictions section for information about contracting with the CDTFA.
See the Industry Topics section for information and examples that may be relevant to you.
See the Resources section for links to additional information and references.
If You Need Help
If at any time you need assistance with topics included in this guide – or with topics not included – feel free to contact us by telephone or email. Contact information and hours of operation are available in the Resources section.
If you have suggestions for improving this guide, please contact us via email.