Some suppliers that sell prepaid wireless phone cards and related services in California will be subject to a new, aggregated surcharge beginning in January 2016.
The fee rate will combine the prepaid 911 surcharge rate, the California Public Utilities Commission’s (CPUC) reimbursement fee and the telecommunications universal service surcharges, as well as applicable local charges.
The new fee structure, called the MTS surcharge, was spurred by state legislation (AB 1717) signed into law in fall 2014 that changed how surcharges for prepaid mobile telephone services are collected and remitted. The surcharge helps fund 911 emergency and other telecom services, according to the Board of Equalization (BOE).
“Prepaid MTS includes prepaid wireless cards/services, plans, minutes, refill or top-off cards,” the BOE said.
Both the CPUC and the BOE are involved in collecting the various surcharges, and both are in the process of enhancing their collection systems to meet the new requirements. Direct sellers are required to file and pay the prepaid 911 surcharge portion of the prepaid MTS surcharge to the BOE using an online form, while CPUC has sellers report through a Telecommunications User Fees Filing System (TUFFS) web portal.
The CPUC is working on a new $4.1 million project to enhance TUFFS in support of the revamped collection structure. There are six separate CPUC surcharges, including the California Advanced Services Fund (CASF) and the California Teleconnect Fund (CTF).
“The Telecommunications User Fees Filing System (TUFFS) currently provides carriers a web portal to remit surcharges on a monthly basis, automatically calculating the amount due based on intrastate revenue, and automatically charging late fees when appropriate. The TUFFS currently handles all surcharge tracking but due to the differing requirements of the MTS surcharge the system is unable to meet this new [MTS surcharge] obligation …,” the CPUC wrote in a project study earlier this year.
About $400 million in surcharges is reported through TUFFS annually, according to the CPUC. The TUFFS system enhancement will include the addition of reporting capabilities and other improvements.
Meanwhile, via another $4.4 million project, the Board of Equalization is updating its legacy mainframe Integrated Revenue Information System (IRIS) and other subsystems to allow indirect sellers (prepaid wireless retailers) and direct sellers (wireless telephone utility service providers) of prepaid mobile telephony services to register, file returns and pay tax with the BOE.
