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Wireless Dealer Magazine CITA 2013 Issue

W D M A number of other states continue to impose a connection or subscriber-based fee. For example, Alabama, Kentucky and Minnesota apply a per connection fee of $0.70 or $0.80. Arkansas, Georgia and Massachusetts impose a per subscriber fee of $0.65 or $0.75. Connecticut (until January 1, 2013) and Washington collect a per-line fee, and Ohio assesses a per telephone number fee of $0.28. Some of these states offer varying methodologies for collecting the tax. While some have not accounted for the unique aspects of the prepaid market (e.g. lack of monthly billing, failure to maintain customer information such as billing addresses), some have begun to recognize the difficulties inherent in collection of prepaid wireless fees and have made accommodations specifically for the prepaid industry. For example, Ohio allows prepaid providers to collect the fee by reducing a subscriber’s account balance at the end of the month or otherwise deducting an equivalent amount of minutes, or by applying a formula to the total sum of earned prepaid wireless revenues in the state during the month. A l A b A M A , K e n T u C K y A n d M i n n e s o T A A p p l y A p e r C o n n e C T i o n f e e o f $ 0 . 7 0 o r $ 0 . 8 0 . Certain state statutes do not specify whether their laws apply to prepaid wireless services. In a few states, the uncertainty has been resolved through litigation. For example, in December 2010, an Arizona court held that its existing law, which does not specify whether the wireless 911 fee applies to prepaid services, is applicable to prepaid. (The Arizona law has since been modified, effective December 31, 2013, to specifically address prepaid services). Similarly, in 2010, the United States District Court for the Western District of Kentucky ruled against Tracfone Wireless which argued that Kentucky’s wireless E911 fee did not apply to prepaid services until 2006, when the law was specifically amended to include prepaid. The court upheld the trial court’s finding that since its enactment in 1998, the statute applied to prepaid wireless providers. In other jurisdictions, the specific application of the E911 fee remains unclear. For example, California law neither expressly includes nor exempts “prepaid wireless” services from the Emergency Telephone Users surcharge. But, because the statute is broad enough to encompass any intrastate communications services, it could apply to prepaid wireless services. Nevada does not impose a statewide wireless E911 fee but authorizes localities to enact ordinances to collect surcharges on “mobile telephone service.” The law does not specify whether fees may apply to prepaid services. A handful of states do not apply any E911 fees to prepaid wireless. For example, Missouri imposes no wireless E911 fee. In Florida, no E911 fee is currently applied to prepaid wireless services. But, the state E911 Board has concluded that unlimited plans do not qualify as exempt prepaid wireless services. 144


Wireless Dealer Magazine CITA 2013 Issue
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