Arizona’s Prepaid Wireless Tax, January 2014
- Sales Tax News
- Nov 18, 2013 | Gail Cole
The Arizona Department of Revenue has announced that beginning January 1, 2014, “prepaid wireless telecommunications retailers… will be liable for remitting the E911 excise tax on prepaid wireless telecommunications service.”
The E911 excise tax is the result of Laws 2012 Chapter 198 (HB 2094). The tax, which is “equal to 0.8% of the gross income derived from the retail sale of prepaid wireless telecommunications services” is actually a combination of three distinct taxes:
- The Emergency Telecommunication Services tax;
- The Prepaid Wireless Telecommunications Service tax; and
- The Telecommunications Provider Proceeds tax.
Funds from the prepaid wireless telecommunications E911 excise tax will be placed in the Emergency Telecommunications Services Revolving Fund.
Retailers may retain 3% of the cost of the tax that they collect from their customers. An explanation of how to calculate that 3% is available on the Arizona Department of Revenue’s E911 Excise Tax page.
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