Bill Text: CA SB1481 | 2015-2016 | Regular Session | Chaptered
Bill Title: Prepaid Mobile Telephony Services Surcharge Collection
Spectrum: Slight Partisan Bill (Democrat 5-2)
Status: (Passed) 2016-07-22 - Chaptered by Secretary of State. Chapter 89, Statutes of 2016. [SB1481 Detail]
Download: California-2015-SB1481-Chaptered.html
BILL NUMBER: SB 1481 CHAPTERED
BILL TEXT
CHAPTER 89
FILED WITH SECRETARY OF STATE JULY 22, 2016
APPROVED BY GOVERNOR JULY 22, 2016
PASSED THE SENATE JUNE 27, 2016
PASSED THE ASSEMBLY JUNE 23, 2016
AMENDED IN ASSEMBLY JUNE 6, 2016
INTRODUCED BY Committee on Governance and Finance (Senators
Hertzberg (Chair), Beall, Hernandez, Lara, Moorlach, Nguyen, and
Pavley)
MARCH 17, 2016
An act to amend Sections 42010, 42014, and 42022 of the Revenue
and Taxation Code, relating to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
SB 1481, Committee on Governance and Finance. Prepaid Mobile
Telephony Services Surcharge Collection Act.
The Prepaid Mobile Telephony Services Surcharge Collection Act
establishes a prepaid MTS surcharge, as defined, based upon a
percentage of the sales price of each retail transaction that occurs
in this state for prepaid mobile telephony services, as defined, that
is imposed in lieu of any charges imposed pursuant to the Emergency
Telephone Users Surcharge Act and specified Public Utility Commission
surcharges. The act requires, on and after January 1, 2016, and
before January 1, 2020, the prepaid MTS surcharge imposed by that act
on a prepaid consumer to be collected by a seller, as defined, from
each prepaid consumer at the time of each retail transaction that
occurs in this state. The act specifies the circumstances for
determining when a transaction occurs in the state.
This bill would make correct an erroneous cross-reference and make
minor revisions in the requirements relative to imposition of the
prepaid MTS surcharge and the circumstances for determining when a
transaction occurs in the state.
The act requires every seller to register with the State Board of
Equalization. The act, commencing January 1, 2017, exempts a seller,
other than a direct seller, with de minimis sales of prepaid mobile
telephony services of less than $15,000 during the previous calendar
year from collecting the prepaid MTS surcharge, and requires the
Department of Finance to annually review and adjust that de minimis
sales threshold, as provided.
This bill would exempt from the registration requirement those
sellers with de minimis sales of prepaid mobile telephony services,
but would not prevent those sellers from registering with the board
on a voluntary basis to collect and remit the surcharge.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 42010 of the Revenue and Taxation Code is
amended to read:
42010. (a) (1) On and after January 1, 2016, a prepaid MTS
surcharge shall be imposed on each prepaid consumer and shall be
collected by a seller from each prepaid consumer at the time of each
retail transaction in this state. The prepaid MTS surcharge shall be
imposed as a percentage of the sales price of each retail transaction
that occurs in this state.
(2) The prepaid MTS surcharge shall be in lieu of any charges
imposed pursuant to the Emergency Telephone Users Surcharge Act (Part
20 (commencing with Section 41001)) and the Public Utilities
Commission surcharges for prepaid mobile telephony services.
(b) The prepaid MTS surcharge shall be annually calculated by the
board by no later than November 1 of each year commencing November 1,
2015, by adding the following:
(1) The surcharge rate reported pursuant to subdivision (d) of
Section 41030.
(2) The Public Utilities Commission's reimbursement fee and
telecommunications universal service surcharges, established by the
Public Utilities Commission pursuant to subdivisions (b) and (c) of
Section 319 of the Public Utilities Code.
(c) (1) The board shall post, for each local jurisdiction, the
combined total of the rates of prepaid MTS surcharge and the rate or
rates of local charges, as calculated pursuant to Sections 42102 and
42102.5, that each local jurisdiction has adopted, not later than
December 1 of each year, on its Internet Web site. The posted
combined rate shall be the rate that applies to all retail
transactions during the calendar year beginning April 1 following the
posting.
(2) Notwithstanding paragraph (1), if a local agency notifies the
board pursuant to subdivision (d) of Section 42101.5 that the posted
rate is inaccurate or it no longer imposes a local charge or local
charges or that the rate of its local charge or local charges has
decreased, the board shall promptly post a recalculated rate that is
applicable to the jurisdiction of that local agency. The change shall
become operative on the first day of the calendar quarter commencing
more than 60 days from the date the local agency notifies the board
of the inaccuracy or that it no longer imposes a local charge or that
the rate of its local charge has decreased. Nothing in this section
modifies the notice obligations of Section 799 of the Public
Utilities Code. However, beginning January 1, 2016, the notification
and implementation requirements of paragraphs (5) and (6) of
subdivision (a) of Section 799 of the Public Utilities Code shall not
apply to prepaid mobile telephony services.
(3) The board shall also separately post on its Internet Web site
the individual rates for each of the following:
(A) Each of the Public Utilities Commission surcharges that make
up the Public Utilities Commission surcharge portion of the prepaid
MTS surcharge, as reported pursuant to Section 319 of the Public
Utilities Code.
(B) The rate for the emergency telephone users surcharge reported
pursuant to subdivision (d) of Section 41030.
(C) Each of the individual local charges reported pursuant to
Section 42101.5.
(4) A seller collecting the prepaid MTS surcharge and local
charges pursuant to this part and Part 21.1 (commencing with Section
42100) may rely upon the accuracy of the information posted on the
board's Internet Web site in collecting and remitting all amounts of
the prepaid MTS surcharge and local charges.
(d) (1) Except for amounts retained pursuant to subdivision (e),
and except as provided in subdivision (f) for a seller that is a
direct seller, all amounts of the prepaid MTS surcharge and local
charges collected by sellers shall be remitted to the board pursuant
to Chapter 3 (commencing with Section 42020).
(2) A seller that is authorized to provide lifeline service under
the state lifeline program or federal lifeline program, that sells
prepaid mobile telephony services directly to the prepaid customer,
shall remit the prepaid MTS surcharge to the board, less any
applicable exemption from the surcharge that is applicable to the
retail transaction pursuant to Section 42012.
(e) A seller that is not a direct seller shall be permitted to
deduct and retain an amount equal to 2 percent of the amounts that
are collected by the seller from prepaid consumers for the prepaid
MTS surcharge and local charges, on a pro rata basis, according to
that portion of the revenues collected by the seller for each of the
following:
(1) The emergency telephone users surcharge.
(2) The Public Utilities Commission surcharges.
(3) Local charges.
(f) A direct seller shall remit the prepaid MTS surcharge and
local charges as follows:
(1) That portion of the prepaid MTS surcharge that consists of the
Public Utilities Commission surcharges shall be remitted to the
commission with those reports required by the commission. The amounts
remitted to the Public Utilities Commission pursuant to this
paragraph shall be deposited into the respective universal service
funds created pursuant to Chapter 1.5 (commencing with Section 270)
of Part 1 of Division 1 of the Public Utilities Code and to the
Public Utilities Commission Utilities Reimbursement Account described
in Chapter 2.5 (commencing with Section 401) of Part 1 of Division 1
of the Public Utilities Code.
(2) That portion of the prepaid MTS surcharge that consists of the
emergency telephone users surcharge shall be remitted to the board
pursuant to the Emergency Telephone Users Surcharge Act (Part 20
(commencing with Section 41001)) for those retail transactions with a
prepaid consumer in the state, with a return filed with the board
using electronic media. The amount remitted to the board pursuant to
this paragraph shall be deposited into the State Emergency Telephone
Number Account in the General Fund.
(3) Local charges, if applicable, shall be remitted to the local
jurisdiction or local agency imposing the local charge. Remittance of
the local charges shall be separately identified from any other
local taxes or other charges that are remitted to the local
jurisdiction or local entity imposing the local tax or other charge.
The amounts remitted to the local jurisdiction or local agency
imposing the local charge pursuant to this paragraph shall be
deposited into the respective local jurisdiction or local agency
account.
(g) A direct seller shall utilize the amounts posted by the board
pursuant to subdivision (c) when determining what amounts to remit to
the Public Utilities Commission, the board, and each local
jurisdiction or local agency.
(h) A prepaid MTS provider shall offer prepaid consumers the
option to make payment for additional prepaid usage directly to the
prepaid MTS provider at the provider's retail location or Internet
Web site.
(i) The amount of the combined prepaid MTS surcharge and local
charges shall be separately stated on an invoice, receipt, or other
similar document that is provided to the prepaid consumer of mobile
telephony services by the seller, or otherwise disclosed
electronically to the prepaid consumer, at the time of the retail
transaction.
(j) The prepaid MTS surcharge that is required to be collected by
a seller and any amount unreturned to the prepaid consumer of mobile
telephony services that is not owed as part of the surcharge, but was
collected from the prepaid consumer under the representation by the
seller that it was owed as part of the surcharge, constitute debts
owed by the seller to this state. The local charge that is required
to be collected by a seller and any amounts unreturned to the prepaid
consumer of mobile telephony services that are not owed as part of
the local charge, but that were collected from the prepaid consumer
under the representation by the seller that they were owed as part of
the local charge, constitute debts owed by the seller jointly to the
state, for purposes of collection on behalf of, and payment to, the
local jurisdiction and to the local jurisdiction imposing that local
charge.
(k) A seller that has collected any amount of prepaid MTS
surcharge and local charges in excess of the amount of the surcharge
imposed by this part and actually due from a prepaid consumer may
refund that amount to the prepaid consumer, even though the surcharge
amount has already been paid over to the board and no corresponding
credit or refund has yet been secured. Any seller making a refund of
any charge to a prepaid consumer may repay therewith the amount of
the surcharge paid.
(l) (1) Every prepaid consumer of mobile telephony services in
this state is liable for the prepaid MTS surcharge and any local
charges until they have been paid to this state, except that payment
to a seller registered under this part relieves the prepaid consumer
from further liability for the surcharge and local charges. Any
surcharge collected from a prepaid consumer that has not been
remitted to the board shall be a debt owed to the state by the person
required to collect and remit the surcharge. Any local charge
collected from a prepaid consumer that has not been remitted to the
board shall be a debt owed jointly to the state, for purposes of
collection on behalf of, and payment to, the local jurisdiction and
to the local jurisdiction imposing the local charge by the person
required to collect and remit the local charge. Nothing in this part
shall impose any obligation upon a seller to take any legal action to
enforce the collection of the surcharge or local charge imposed by
this section.
(2) A credit shall be allowed against, but shall not exceed, the
prepaid MTS surcharge and local charges imposed on any prepaid
consumer of mobile telephony services by this part to the extent that
the prepaid consumer has paid emergency telephone users charges,
state utility regulatory commission fees, state universal service
charges, or local charges on the purchase to any other state,
political subdivision thereof, or the District of Columbia. The
credit shall be apportioned to the charges against which it is
allowed in proportion to the amounts of those charges.
(m) (1) A seller is relieved from liability to collect the prepaid
MTS surcharge imposed by this part that became due and payable,
insofar as the base upon which the surcharge is imposed is
represented by accounts that have been found to be worthless and
charged off for income tax purposes by the seller or, if the seller
is not required to file income tax returns, charged off in accordance
with generally accepted accounting principles. A seller that has
previously paid the surcharge may, under rules and regulations
prescribed by the board, take as a deduction on its return the amount
found worthless and charged off by the seller. If any such accounts
are thereafter in whole or in part collected by the seller, the
amount so collected shall be included in the first return filed after
such collection and the surcharge shall be paid with the return.
(2) The board may by regulation promulgate such other rules with
respect to uncollected or worthless accounts as it shall deem
necessary to the fair and efficient administration of this part.
SEC. 2. Section 42014 of the Revenue and Taxation Code is amended
to read:
42014. (a) For purposes of this part, a retail transaction occurs
in the state under any of the following circumstances:
(1) The prepaid consumer makes the retail transaction in person at
a business location in the state (point-of-sale transaction).
(2) If paragraph (1) is not applicable, the prepaid consumer's
address is in the state (known-address transaction). A known-address
transaction occurs in the state under any of the following
circumstances:
(A) The retail sale involves shipping of an item to be delivered
to, or picked up by, the prepaid consumer at a location in the state.
(B) If the prepaid consumer's address is known by the seller to be
in the state, including if the seller's records maintained in the
ordinary course of business indicate that the prepaid consumer's
address is in the state and the records are not made or kept in bad
faith.
(C) The prepaid consumer provides an address during consummation
of the retail transaction that is in the state, including an address
provided with respect to the payment instrument if no other address
is available and the address is not given in bad faith.
(3) If an address is not available to the seller to determine
whether any of the circumstances in paragraph (2) exist, the
transaction will be deemed to be a known-address transaction
occurring in this state if the mobile telephone number is associated
with a location in this state.
(b) (1) A retail transaction shall occur at only one location for
purposes of determining local charges. If the retail transaction is a
point-of-sale transaction, the consumption of, use of, or access to,
the prepaid mobile telephony service shall be presumed to be at that
location.
(2) If the retail transaction is a known-address transaction, the
location shall be as determined in descending order beginning with
subparagraph (A) of paragraph (2) of subdivision (a); if subparagraph
(A) of that paragraph is inapplicable, then pursuant to subparagraph
(B) of that paragraph; if both subparagraphs (A) and (B) of that
paragraph are inapplicable, then subparagraph (C) of that paragraph;
and if subparagraphs (A), (B), and (C) of that paragraph are
inapplicable, then paragraph (3) of subdivision (a). In a
known-address transaction, the consumption of, use of, or access to,
the prepaid mobile telephony service shall be presumed to be at the
known address.
(c) (1) A seller that relies in good faith on information provided
by the board to match the location of a point-of-sale transaction to
the applicable prepaid MTS surcharge amount and local charges, that
collects that amount from the prepaid consumer, and that remits the
amount to the board in compliance with this part, shall not be liable
for any additional MTS surcharge or local charges and shall not be
required to refund any amounts collected and paid to the board to the
prepaid consumer.
(2) For a known-address transaction, the seller may collect the
prepaid MTS surcharge and local charges that correspond to the
five-digit postal ZIP Code of the prepaid consumer's address. A
seller that, with due diligence and in good faith, relies on credible
information to match the five-digit postal ZIP Code of the prepaid
consumer's address to the applicable prepaid MTS surcharge and local
charges amount, that collects that amount from the prepaid consumer,
and that remits the amount to the board in compliance with this part,
shall not be liable for any additional MTS surcharge or local
charges and shall not be required to refund any amounts collected and
paid to the board to the prepaid consumer, even if the five-digit
postal ZIP Code of the prepaid consumer's address that the seller
uses corresponds to more than one local charge.
SEC. 3. Section 42022 of the Revenue and Taxation Code is amended
to read:
42022. Every seller, except a seller that is not required to
collect the prepaid MTS surcharge pursuant to Section 42010.7 and
local charges pursuant to Section 42101.7, shall register with the
board. Nothing in this section prevents a seller from registering
with the board on a voluntary basis to collect and remit the
surcharge even if the seller meets the de minimis sales threshold
provided by Sections 42010.7 and 42101.7. The board shall establish a
method for registration of sellers under this part that utilizes the
existing registration process for a seller's permit established
pursuant to Section 6066 of the Sales and Use Tax Law (Part 1
(commencing with Section 6001)). Every application for registration
shall be made upon a form prescribed by the board and shall set forth
the name under which the applicant transacts or intends to transact
business, the location of its place or places of business, and such
other information as the board may require. An application for
registration shall be authenticated in a form or pursuant to methods
as may be prescribed by the board.
