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.