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Business Taxes Law Guide—Revision 2024
Local Prepaid Mobile Telephony Services Collection Act
Revenue and Taxation Code
Division 2. Other Taxes
Part 21.1. Local Prepaid Mobile Telephony Services Collection Act
Section 42103
42103. Administration of local charges by department; Local Charges for Prepaid Mobile Telephony Services Fund; Transmittals of local charges; Adoption of rules and regulations; Audit duties; Third-party contracts for performance of specified department duties. (a) (1) The department shall perform all functions incident to the collection of the local charges of a local jurisdiction or local agency and shall collect and administer the local charges pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)) in the manner prescribed by this part, subject to the limitations set forth in Section 42105. For purposes of this part, the references in the Fee Collection Procedures Law to "fee" shall include the local charges imposed by this part, and references to "feepayer" shall include a person required to pay the local charges imposed by this part, which includes the sellers, who shall be required to register with the department.
(2) Notwithstanding Article 1.1 (commencing with Section 55050) of Chapter 3 of Part 30, any person required, or that elects, to remit amounts due under Part 1 (commencing with Section 6001) by electronic funds transfer pursuant to Article 1.2 (commencing with Section 6479.3) of Chapter 5 of Part 1 shall remit the local charges due under this section by electronic funds transfer.
(b) All local charges collected by the department shall be deposited in the Local Charges for Prepaid Mobile Telephony Services Fund, which is hereby created in the State Treasury, and shall be held in trust for the local taxing jurisdiction, and shall not be used for any other purpose. Local charges shall consist of all taxes, charges, interest, penalties, and other amounts collected and paid to the department, less payments for refunds and reimbursement to the department for expenses incurred in the administration and collection of the local charges. The department shall transmit the funds to the local jurisdictions periodically as promptly as feasible. The transmittals required under this section shall be made at least once in each calendar quarter. The department shall furnish a quarterly statement indicating the amounts paid and withheld for expenses of the department incurred for the administration and collection of local charges.
(c) (1) The department shall prescribe and adopt rules and regulations as may be necessary or desirable for the administration and collection of local charges and the distribution of the local charges collected.
(2) The department may prescribe, adopt, and enforce any emergency regulations as necessary to implement this part. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare.
(d) The department shall establish procedures to be used by a seller, including a direct seller, to document that a sale is not a retail transaction.
(e) The department's audit duties under this part shall be limited to verification that the seller complied with this part.
(f) Subject to the confidentiality requirements of Sections 7284.6, 7284.7, and 19542, the department shall make available to a requesting local jurisdiction or local agency any information that is reasonably available to the department regarding the proper collection and remittance of a local charge of the local jurisdiction or local agency by a seller, including a direct seller.
(g) The department may contract with a third party for purposes of this part, solely in connection with the following department duties:
(1) To allocate and transmit collected local charges in the Local Charges for Prepaid Mobile Telephony Services Fund pursuant to subdivision (b) to the appropriate local jurisdictions.
(2) To audit proper collection and remittance of the local charge pursuant to this part.
(3) To respond to requests from sellers, consumers, boards, and others regarding issues pertaining to local charges that are within the scope of the department 's duties.
(h) For purposes of this part, any third-party contract under subdivision (g) shall be subject to the following limitations:
(1) Any third party shall, to the same extent as the department , be subject to subdivision (b) of Section 55381, relating to unlawful disclosures.
(2) A third-party contract shall not provide, in whole or in part, in any manner a contingent fee arrangement as payment for services rendered. For purposes of this section, "contingent fee" includes, but is not limited to, a fee that is based on a percentage of the tax liability reported on a return, a fee that is based on a percentage of the taxes owed, or a fee that depends on the specific tax result attained.
(i) Except for those procedures established pursuant to subdivision (d) and the sharing of information pursuant to subdivision (f), this section does not apply to direct sellers.
History—Added by Stats. 2014, Ch. 885 (AB 1717), in effect September 30, 2014. Stats. 2019, Ch. 642 (SB 344), in effect January 1, 2020, added "as that law read on January 1, 2017," after "42001))," in the first sentence of subdivision (a); substituted "f" for "e" in subdivision (g); substituted "department" for "board" throughout the section. Added by Stats. 2020, Ch. 179 (SB 1441), in effect January 1, 2021, added "pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001))," ; deleted "for the collection of the prepaid MTS surcharge in the Prepaid Mobile Telephony Services Surcharge Collection Act (Part 21 (commencing with 42001)), as that law read on January 1, 2017," ; added "by this part," in the first sentence of paragraph (1) of subdivision (a). Substituted "charges" for "charge" and "sellers," for "seller"; added "who shall be required to register with the department." in the second sentence of paragraph (1) of subdivision (a). Added paragraph (2) of subdivision (a). Added a comma after "Fund" in first sentence of subdivision (b); deleted "and subject to subdivision (e) of Section 42020" and added "incurred for the administration and collection of local charges." to the final sentence of subdivision (b). Added paragraph (2) of subdivision (c). Relettered subdivisions (d), (e), (f), (g) and (h) to (e), (f), (g), (h) and (i) respectively; added new subdivision (d). Substituted "g" for "f" in subdivision (h). Added "those procedures established pursuant to subdivision (d) and the" and substituted "f" for "e" in subdivision (i).