Washington Repeals Exemption for Certain Phone Services

In response to changes in technology and deregulation, to make its laws more current with telecommunication offerings, and due to a 2011 court decision regarding the interpretation of residential telephone service, Washington’s sales tax exemptions for residential telephone service and coin-operated telephone service are repealed. In addition, the state and local enhanced 911 excise tax is imposed on the sale of a prepaid wireless telecommunication service. This is defined as a telecommunications service that provides the right to use mobile wireless service as well as other non-telecommunications services including the download of digital products delivered electronically, content, and ancillary services, which must be paid for in full in advance and sold in predetermined units or dollars of which the number declines with use in a known amount. If the seller does not collect the tax, the consumer has the obligation to pay the tax. The tax must be separately stated on the invoice to the consumer. The state enhanced 911 excise tax is imposed on the use of all radio access lines :(i) By subscribers whose place of primary use is located within the state in an amount of twenty-five cents per month for each radio access line. The tax must be uniform for each radio access line under this subsection (6)(a)(i); and (ii) By consumers whose retail transaction occurs within the state in an amount of twenty-five cents per retail transaction. The tax must be uniform for each retail transaction under this subsection (6)(a)(ii). Until July 1, 2018, a seller of prepaid wireless telecommunications service may charge an additional five cents per retail transaction as compensation for the cost of collecting and remitting the tax. For purposes of the state and county enhanced 911 excise taxes imposed by subsections (2) and (6) of this section, the retail transaction is deemed to occur at the location where the transaction is sourced to under RCW 82.32.520(3)(c). (Effective August 1, 2013, Ch. 8 (H.B. 1971), Laws 2013)

Posted on August 26, 2013