Starting December 1, 2017, companies selling prepaid wireless communications services in New York must collect and remit a state public safety surcharge on all retail sales. In addition, New York law authorizes localities to impose a local surcharge on prepaid wireless services. The New York State Tax Department recently issued guidance about the surcharge. See TSB-M-17(2)WCS, Wireless Communications Surcharge on Prepaid Wireless Communications Services. For information on surcharge rates, and a list of localities that impose the surcharge, see PUB 452, Wireless Communications Surcharge Rates on Prepaid Wireless Communications Services.
Note that the surcharge ($0.90 per retail sale) applies to initial sales of prepaid wireless services, as well as recharges. Localities may charge up to $0.30 per retail sale. Prepaid wireless communications sellers may retain a percentage of their collections as an administrative fee as noted in TSB-M-17(2)WCS. The surcharge must be added as a separate line item to any sales slip, invoice, receipt, or other statement of the price given by a prepaid wireless communications seller to a purchaser, and must be identified as “the public safety communications surcharge.” Sellers must add the surcharge to each retail sale (e.g., if a seller sells a mobile phone loaded with minutes and a refill card, then the $1.20 (state and local) surcharge must be applied to each of the loaded phone and refill card for a total surcharge of $2.40).
The Tax Department’s publication offers guidance for sourcing revenue to the state for surcharge purposes, exemptions, and filing returns and remitting collected surcharges.
Clients with questions on the new rules should contact Allison Rule at email@example.com or (703) 714-1312 or Jackie Hankins at firstname.lastname@example.org or (703) 714-1314.