(1)
Definitions. The
definitions in rule
701-217.2 (423) apply to this
rule. The following definitions are also applicable to this rule:
"Consumer" means a person who purchases
prepaid wireless telecommunications service in a retail transaction.
"Department" means the department of
revenue.
"Prepaid wireless 911 surcharge" means the
surcharge that is required to be collected by a seller from a consumer in the
amount established under this rule.
"Provider" means a person who provides
prepaid wireless telecommunications service pursuant to a license issued by the
Federal Communications Commission.
"Retail transaction" means the purchase of
prepaid wireless telecommunications service from a seller for any purpose other
than resale. If more than one separately priced item of prepaid wireless
calling service is purchased by an end user, each item purchased shall be
deemed to be a separate retail transaction.
Items of prepaid wireless calling service include but are not
limited to prepaid wireless phones, prepaid wireless phone calling cards,
rechargeable prepaid wireless phones, rechargeable prepaid wireless phone
calling cards, and prepaid wireless service plans.
Example 1: If a seller sells two prepaid wireless phone
calling cards, two retail transactions have occurred.
Example 2: If a seller sells additional minutes for a
rechargeable prepaid wireless phone calling card that was purchased at an
earlier date, a retail transaction has occurred.
Example 3: If a seller sells three separate one-month service
plans to a consumer during one sale, three retail transactions have
occurred.
Example 4: If the consumer has the ability to purchase
additional minutes directly from a prepaid wireless phone, each time minutes
are purchased, a retail transaction occurs.
"Seller" means a person who sells prepaid
wireless telecommunications service to another person.
(2)
Registration. Each
seller that sells prepaid wireless service must register according to the
procedures established by the department. The department will make information
regarding the procedures available to the public.
(3)
Collecting, filing, and
remitting.
a. Each seller is
responsible for collecting the applicable 911 surcharge from the consumer with
respect to each retail transaction occurring in this state. A seller may
determine whether the transaction occurs in this state by referring to the
department rules on the sourcing of sales of prepaid wireless
telecommunications service in paragraph 217.6(2)"b." More
information is also contained in Iowa Code sections
34A.7B(4),
423.15 and
423.20.
b. The surcharge must be separately itemized
on the invoice, receipt or other similar document, or otherwise disclosed to
the consumer.
c. The prepaid
wireless 911 surcharge is the liability of the consumer and not of the seller
or any provider, except that the seller shall be liable to remit all prepaid
wireless 911 surcharges that the seller collects from consumers as provided in
paragraph 217.8(3)"a," including all such surcharges that the
seller is deemed to collect where the amount of the surcharge has not been
separately stated on an invoice, receipt, or similar document provided to the
consumer by the seller.
d. The
amount of the prepaid wireless 911 surcharge that is collected by a seller from
a consumer, if such amount is separately stated on an invoice, receipt, or
other similar document provided to the consumer by the seller, shall not be
included in the base for measuring any tax, fee, other surcharge, or other
charge that is imposed by this state, any political subdivision of this state,
or any intergovernmental agency.
e.
The seller must complete a 911 Surcharge Schedule and the surcharge portion of
the Iowa Sales Tax and Surcharge Return or Iowa Retailer's Use Tax and
Surcharge Return and file the information with the department.
f. The schedule, return and the collected
surcharge are due at the times provided by Iowa Code chapter 423 with respect
to the sales and use tax.
g. The
seller may deduct and retain 3 percent of prepaid wireless 911 surcharges that
are collected by the seller from consumers.
h. The seller is not required to collect the
surcharge if a minimal amount of prepaid wireless telecommunications service is
sold in conjunction with a prepaid wireless device for a single, nonitemized
price. A minimal amount of service is any service denominated as $5 or less or
ten minutes or less.
Example: If a seller sells a prepaid wireless phone that
comes with 10 minutes of service, and the price of the service is not itemized,
the seller is not required to collect the surcharge. But if the seller sells a
prepaid wireless phone with 15 minutes of service, the seller must collect the
surcharge, regardless of whether the price of the service is
itemized.
(4)
Audit, appeal, and enforcement.
a. The audit and appeal procedures applicable
to sales and use tax under Iowa Code chapter 423 shall apply to the prepaid
wireless 911 surcharge. More information is contained in Iowa Code sections
421.10 and
421.60.
b. Pursuant to the authority established in
Iowa Code chapter 423, the department shall have the power to assess the seller
for penalty and interest on any past due surcharge and exercise any other
enforcement powers established in Iowa Code chapter 423. More information is
contained in Iowa Code sections
421.7 and
421.27.
c. The seller shall maintain, and shall make
available to the department for inspection for three years, its books and
records in a manner that will permit the department to determine whether the
seller has complied with or is complying with the provisions of Iowa Code
section 34A.7B.
(5)
Procedures for documenting that a
sale is not a retail transaction. The procedures for establishing that
a sale of prepaid wireless telecommunications service is not a sale is similar
to the procedure for documenting sale for resale transactions under Iowa Code
chapter 423.
(6)
Procedures
for remitting the surcharge to the treasurer. The department shall
transfer all remitted prepaid wireless 911 surcharges to the treasurer of state
for deposit in the 911 emergency communications fund created under Iowa Code
section
34A.7A(2)
within 30 days of receipt of the 911 surcharge from sellers. Prior to remitting
the surcharges to the treasurer, the department shall deduct and retain an
amount, not to exceed 2 percent of collected surcharges, to reimburse the
department's direct costs of administering the collection and remittance of
prepaid wireless 911 surcharges.
This rule is intended to implement Iowa Code section
34A.7B.
