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OVERVIEW Effective September 1, 2012, the Alabama Department of Revenue (ADOR) will begin administration of the Prepaid Wireless 9-1-1 Charge on retail sales of prepaid wireless services. All sellers making retail sales of prepaid wireless telephone service shall collect the Prepaid Wireless 9-1-1 Charge from the consumers and pay the amount collected to the Department of Revenue. The rate of the Prepaid Wireless 9-1-1 Charge is:
|WHAT DATE DO I BEGIN REMITTING THE PREPAID WIRELESS 9-1-1 CHARGE TO THE ALABAMA DEPARTMENT OF REVENUE? A seller of prepaid wireless service who has collected charges for September 2012 will remit their September collections to the Alabama Department of Revenue on or before October 20, 2012.|
|WHAT IS PREPAID WIRELESS SERVICE?
In general, prepaid wireless service refers to any method by which a customer pays a wireless service provider in advance for a wireless telecommunications connection. Examples include but are not limited to:
|HOW DOES A RETAILER REGISTER TO COLLECT AND REMIT THESE CHARGES? Beginning on September 17, 2012, a seller that sells prepaid wireless services may register online through My Alabama Taxes (MAT) at https://myalabamataxes.alabama.gov. The link to register will be located below the "Logon" button on MAT's home page. Please have the following information readily available in order to complete the registration process: federal identification number (FEIN) or social security number (SSN) and sign-on id/access code used to access any existing account(s) with the ADOR. If you do not have an account with ADOR, please follow the instructions provided by MAT to obtain a new account.|
HOW DOES A RETAILER SUBMIT THE RETURN AND REMIT THE CHARGES? The return is submitted through the Alabama Department of Revenue’s online filing system, My Alabama Taxes (MAT) at https://myalabamataxes.alabama.gov. During the electronic filing of the return, an option is provided allowing the charges to be remitted electronically or by check. For each occasion that a business taxpayer is obligated to make a tax payment of $750 or more to the Alabama Department of Revenue, such payment must be remitted electronically. EFT payments must be initiated before 4:00 PM on the due date to be considered timely.
|IS SALES TAX CALCULATED ON THE PREPAID WIRELESS 9-1-1 CHARGE WHEN BILLED IN CONJUNCTION WITH THE SALE OF PREPAID WIRELESS SERVICES? If the invoice or receipt separately states the Prepaid Wireless 9-1-1 Charge and does not include that charge with the cost of the service or prepaid telephone card, the charge is not subject to the sales or use tax. Please note that the sale of prepaid wireless services, including a prepaid telephone calling card or a prepaid authorization number, or both, shall be deemed the sale of tangible personal property subject to the sales or use tax imposed on the sale of tangible personal property.|
WILL THE SELLER BE SUBJECT TO PENALTY AND INTEREST IF THE RETURN IS FILED AND/OR PAID LATE? Yes. Returns are due by the 20th of the month following the month in which they were collected (example: September 2012 return is due on or before October 20, 2012). Returns filed after the due date are subject to a "failure to timely file" penalty equal to the greater of 10% of the tax or $50.00. Tax payments received after the due date are also subject to a "failure to timely pay" penalty equal to 10% of the delinquent tax. In addition, if the tax is not timely paid, interest is due at the same rate established by the Secretary of the Treasury under authority of 26 USC 6621. (Click here to determine current interest rates.)
|CAN A RETURN BE AMENDED AFTER IT IS FILED? Yes. An amended return may be filed electronically through My Alabama Taxes (MAT) at https://myalabamataxes.alabama.gov. Detailed instructions for filing amended returns are available through the “Help” link or “Instructional Videos” links on the My Alabama Taxes home page.|
|ARE ANY PREPAID WIRELESS TRANSACTIONS NOT SUBJECT TO THE PREPAID WIRELESS 9-1-1 CHARGE? Yes - if the prepaid wireless service is 10 minutes or less or $5.00 or less and is sold with a prepaid wireless device for a single, non-itemized price, then the seller may elect not to apply the Prepaid Wireless 9-1-1 Charge to the transaction. Also if the prepaid wireless services are sold to another retailer for resale they are not subject to the charge. The seller is required to maintain records in order to verify that transactions on which the Prepaid Wireless 9-1-1 Charge was not collected are not subject to the charge.|
|ARE OUT OF STATE OR ONLINE SELLERS REQUIRED TO COLLECT THE PREPAID WIRELESS 9-1-1 CHARGE? All sellers should collect the charge on sales of prepaid wireless service to Alabama customers or customers who provide a primary street or business address in Alabama. If a primary street or business address cannot be determined and if that customer has an area code designated as an area code for Alabama, then the Prepaid Wireless 9-1-1 Charge shall be collected from that customer. As a general rule, if a seller does not have a physical presence in Alabama (i.e., the seller does not own or lease property in the state, does not have employees or independent sales agents in the state), it will not be required to collect the Prepaid Wireless 9-1-1 Charge.|
|WHO CAN I CONTACT WITH QUESTIONS? Please call (334) 242-1490 for assistance or for email inquiries go to our Contact Us page and select the topic: Prepaid Wireless 9-1-1 Charge.|