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911 Emergency Surcharge on Retail Sales of Prepaid Wireless Telecommunications Services. 10 am CST/ 9 am MST Monday , April 23, 2012. Agenda. Administration Surcharges - Overview 911 Emergency Surcharge Prepaid Wireless 911 Emergency Surcharges Prepaid Wireless Surcharge details

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911 emergency surcharge on retail sales of prepaid wireless telecommunications services

911 Emergency Surcharge on Retail Sales of Prepaid Wireless Telecommunications Services

10 am CST/ 9 am MST

Monday, April 23, 2012

agenda
Agenda
  • Administration
  • Surcharges - Overview
    • 911 Emergency Surcharge
    • Prepaid Wireless 911 Emergency Surcharges
  • Prepaid Wireless Surcharge details
  • Registration
  • EPath
  • Reporting
  • Administrative Fee
  • Contact Information
  • Questions/Answers
administration of surcharge
Administration of Surcharge

Role of SD Department of Revenue

  • Registration
  • Collection

Role of SD Department of Public Safety

  • DPS is the home agency for the South Dakota 9-1-1 Coordination Board which promulgates rules related to 9-1-1 and reports to the Legislature and Governor on 9-1-1 funding and issues
  • Distribution of surcharge funds
senate bill 174 amends sdcl 34 45
Senate Bill 174Amends SDCL §34-45

911 Emergency Surcharge

  • Effective July 1, 2012, the 911 Emergency Surcharge increases to $1.25 per service user line
  • All telecommunications service providers, wireless service providers, or Interconnected Voice over Internet Protocol service providers are responsible for collecting and remitting this surcharge.
  • This surcharge does not apply to the sale of Prepaid Wireless Telecommunications Services.

Service provider is any person or entity providing, or offering to provide, or selling telecommunications service, wireless telecommunications service, or Interconnected Voice over Internet Protocol service.

senate bill 174 amends sdcl 34 451
Senate Bill 174Amends SDCL §34-45

Prepaid Wireless 911 Emergency Surcharge

  • Effective July 1, 2012, a new surcharge of 2% will apply to the gross receipts from retail sales of all types of prepaid wireless service delivered to customers in South Dakota or sold online to customers with a South Dakota address.
  • Any seller and wireless service provider that sells prepaid wireless service, which includes prepaid wireless airtime cards and prepaid wireless minutes and plans, is responsible for collecting and remitting the Surcharge

Prepaid wireless service seller is any person who sells prepaid wireless telecommunications service to the consumer.

Prepaid wireless service provider is any person that provides prepaid wireless telecommunications service.

prepaid wireless 911 emergency surcharge
Prepaid Wireless 911 Emergency Surcharge

Bundled Transactions

When prepaid wireless service is sold with other products for a single, non-itemized price, the 2% surcharge applies to the entire price.

If the dollar amount of the prepaid wireless service and the surcharge are disclosed to the consumer, or the seller identifies the portion of the price that is for the prepaid wireless service in their books and records kept in the regular course of business, then the 2% surcharge only applies to the portion of the charge that is for the prepaid wireless service.

Example:

A phone is purchased with 100 minutes of prepaid airtime for $75.00.

Because the minutes are not itemized, the entire $75.00 is subject to the 2% surcharge. If the package or the provider’s records indicates the fee for the phone is $50 and the prepaid airtime is $25, then only the $25 is subject to the 2% surcharge.

prepaid wireless 911 emergency surcharge1
Prepaid Wireless 911 Emergency Surcharge

Bundled Transactions

A seller may elect not to collect the 2% surcharge on any sale of a prepaid wireless device (a prepaid wireless phone) that is bundled with prepaid wireless service denominated as 10 minutes or less or as five dollars or less.

Example: A retailer sells a prepaid phone package for $9.95. The package includes 20 minutes of airtime to allow the customer to activate the phone.

The retailer does not know the dollar value of the 20 minutes of airtime.

The surcharge applies to the $9.95 because the package includes more than 10 minutes and the retailer cannot document the value of the minutes.

itemize surcharge on customer s invoice
Itemize Surcharge on Customer’s Invoice

Both of the 911 Emergency Surcharges are to be itemized on the customer’s invoice or other documents provided to the customer and, if itemized, the surcharge is not subject to sales tax.

r egistration
Registration

Already have a sales tax license?

  • Complete the E-form online. Go to www.state.sd.us/drr, select Business Tax, then 911 Emergency Surcharge.
  • Call the Department of Revenue at (800) 829-9188; or
  • Return the Registration Form received with your letter.
r egistration1
Registration

Don’t have a sales tax license?

  • Apply for a sales tax license online at www.state.sd.us/taxapp.
  • When completing the application you will be asked the following :
    • Do you sell prepaid wireless airtime cards, prepaid wireless plans, or prepaid wireless minutes?
    • Are you a telecommunications service provider, wireless service provider, or Interconnected Voice over Internet Protocol service provider?

Yes to either question will prompt the agent reviewing the applications to issue a 911 Emergency Surcharge Identification Number.

Identification Numbers cannot be transferred from one entity to another. If ownership changes you will need to cancel the current number.

The new owner will need to register with the Department.

registration types
Registration Types

E9 (911 Emergency Surcharge – Providers)

  • 9000-9999-E9

PP (Prepaid Wireless 911 Emergency Surcharge – Sellers)

  • 9000-9999-PP

Note: If a business is filing sales tax on a consolidated license they may also file a consolidated 911 Emergency Surcharge return. Be sure to let the Department know at time of registration if you will be filing a consolidated surcharge return.

slide12

After registering you will receive information on SD EPath.

This information will include:

  • directions on how to access the system
  • how to create an account and user name

Once you have created an account, you will be sent a password by US Mail. The first time you log in to the account you will be prompted to set your own password.

You will not be able to log in to your account until July 1, 2012.

reporting 911 emergency surcharges
Reporting 911 Emergency Surcharges

Reporting and paying will be completed electronically using SD EPath.

Returns will be filed monthly

  • Due Date for filing is the 23rd of the following month.
  • Accounts will be set up for ACH Debit payment. The Department will pull the payment from your account on the 2nd to the last business day of the month.

The first return is for July, 2012, and is due by August 23, 2012.

You can use SD EPath at any time to file a return, file a delinquent return, or make a payment.

If you do not have access to the internet or cannot pay using ACH Debit contact DOR for other filing and paying options.

slide15

Enter your choice of User names

  • License Number: The Identification number for the E9 or PP registration
  • The owner or DBA exactly as listed on the registration card
  • Tax Due on last non-zero Return: Enter 0

At this point your account is created. You will be mailed a password that will allow you to enter the system and will require you to change the password to one you choose.

administrative fee
Administrative Fee
  • An administrative fee may be retained by the business to help cover the cost of collecting and remitting the 911 Emergency Surcharge.
  • Sellers and Providers may retain 2% of the total surcharge collected each month or $25, whichever amount is greater.
  • The administrative fee cannot exceed the amount of the surcharge collected.
  • If the return is filed after the due date no allowance will be granted.
  • Applies to only those surcharges reported.

Example - If you are reporting using cash accounting and an August sale is reported when paid in October, then the allowance can only be claimed in October.

administrative fee1
Administrative Fee
  • Sellers of prepaid wireless service may retain the entire surcharge collected on the prepaid wireless service for the months of July, August, and September 2012.
  • These sales must be reported but no remittance will be calculated.
slide18

Prepaid Wireless

911 Emergency Surcharge Return

Reporting Period

Jul 2012

Return

07/2012

Return Due

August 20, 2012

Identification #

o

Check for change of address below

Name

DBA

Address

o

Discontinued selling prepaid wireless 911 services?

Date

Discontinued

Prepaid Wireless 911 Emergency Surcharge

Sellers of prepaid wireless service

shall

collect and

remit

a

2%

surcharge on

the retail sale

of the prepaid

wireless

service to end consumers in South Dakota.

This includes retailers and service providers that sell

prepaid

wireless

airtime cards and prepaid

monthly plans

and minutes

.

(

SDCL 34

-

45)

1.

Total

Retail

Sales

of

Prepaid

W

ireless

S

ervice

$ 5000.00

2.

Prepaid Wireless 911

Emergency

Surcharge Due (line 1 x .02)

$ 100.00

Administrative Fee

:

3

.

2% of the Surcharge due or $25, whichever is greater

(not to

$100.00

exceed total surcharge due)

.

Do not take if return is filed late.

(line

2

x .02)

3.

Interest

:

1.25% of total

S

urcharge due

(

l

ine 2) (minimum $5.00 first month late)

0

4.

Penalty

:

10% of total

Sur

charge due

(line 2) (minimum $10)

0

6. Adjustment (previous credits or balance due)

0

Total Amount Due

7

.

(Lines 2

-

3 + 4

+

5

+ 6

)

$ 0.00

Amount Remitted

8

.

$ 0.00

Sample Return

July 2012

Enter the data for the lines 1 and 8. The red fields will be calculated for you.

slide19

Prepaid Wireless

911 Emergency Surcharge Return

Reporting Period

Oct 2012

Return

10/2012

Return Due

November 20, 2012

Identification #

o

Check for change of address below

Name

DBA

Address

o

Discontinued selling prepaid wireless 911 services?

Date

Discontinued

Prepaid Wireless 911 Emergency Surcharge

Sellers of prepaid wireless service

shall

collect and

remit

a

2%

surcharge on

the retail sale

of the prepaid

wireless

service to end consumers in South Dakota.

This includes retailers and service providers that sell

prepaid

wireless

airtime cards and prepaid

monthly plans

and minutes

.

(

SDCL 34

-

45)

1.

Total

Retail

Sales

of

Prepaid

W

ireless

S

ervice

$ 5000.00

2.

Prepaid Wireless 911

Emergency

Surcharge Due (line 1 x .02)

$ 100.00

Administrative Fee

:

3

.

2% of the Surcharge due or $25, whichever is greater

(not to

$25.00

exceed total surcharge due)

.

Do not take if return is filed late.

(line

2

x .02)

3.

Interest

:

1.25% of total

S

urcharge due

(

l

ine 2) (minimum $5.00 first month late)

0

4.

Penalty

:

10% of total

Sur

charge due

(line 2) (minimum $10)

0

6. Adjustment (previous credits or balance due)

0

Total Amount Due

7

.

(Lines 2

-

3 + 4

+

5

+ 6

)

$ 75.00

Amount Remitted

8

.

$ 75.00

Sample Return

October 2012

Enter the data for the lines 1 and 8. The red fields will be calculated for you.

administrative fee examples
Administrative Fee Examples
  • Example #1
    • Prepaid Wireless Sales $100,000
    • 2% surcharge collected $2,000
      • The administrative fee is 2% of the $2,000 collected = $40
      • Because $40 is greater than $25 and more than $40 was collected in surcharges you are allowed to keep $40
      • You will remit $1,960
  • Example #2
    • Prepaid Wireless Sales $5,000
    • 2% surcharge collected $100
      • The administrative fee is 2% of the $100 collected = $2
      • However, because $25 is greater than the $2 and you collected more than $25 in surcharges you are allowed to keep $25
      • You will remit $75
administrative fee examples continued
Administrative Fee Examples (continued)
  • Example #3
    • Prepaid Wireless Sales $1,000
    • 2% surcharge collected $20
      • Because the surcharge collected is less than $25 you will be allowed to keep the $20 surcharge collected.
      • You will remit $0
delinquent returns
Delinquent Returns
  • Interest is 1.25% of the surcharge collected and is applied each month, or part thereof, for any unpaid amounts after the due date (a minimum $5 interest applies the first month).
  • Penalty is 10% of the surcharge collected and is applied if a return is not received within 30 days following the month the return is due (a minimum $10).
  • If a taxpayer fails to file returns or pay the collected surcharge, penalties and interest, the Department of Revenue may use civil or criminal action to obtain compliance.
  • Corporate officers, member-managers or managers of limited liability companies, or partners that control, supervise, or are charged with the responsibility of filing the returns or remitting the payments pursuant to SDCL §34-45 may be held personally liable for the surcharges collected by the business.
amending returns
Amending Returns
  • Call the Department of Revenue at (800)829-9188 and request an amendable return; or
  • Complete a blank 911 Emergency Surcharge return from the Department’s Form page online at www.state.sd.us/drr (select Business Tax, then Forms)
slide24

Visit our Website: www.state.sd.us/drr2

Call Toll Free: 1-800-829-9188

Email the Business Tax Division: bustax@state.sd.us

To lookup addresses for municipal tax information use:

Available online at: www.state.sd.us/businesstax

To file and pay the 911 Surcharges electronically use:

Information is available online at: www.state.sd.us/drr2

(Select Business Tax, then 911 Emergency Surcharge)

To file and pay sales and use tax electronically use:

Information is available online at: www.state.sd.us/drr2

(Select Business Tax, Sales Tax, then SD Quest)

slide25

If you have questions on the distribution or use of the 911 Emergency Surcharges contact:

South Dakota State 9-1-1 Coordinator

118 West Capital Ave

Pierre, SD 57501

Phone: 605-773-3178

Email: sd911coordinator@state.sd.us

Visit SD Department of Public Safety website at: www.dps.sd.gov