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Prepaid Wireless Surcharge
Frequently Asked Questions

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. The Department recommends you do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.

What is the prepaid wireless surcharge (surcharge)?

How much is the surcharge?

Who must collect the surcharge?

How is the surcharge calculated?

How does a retailer become licensed to collect the surcharge?

When is the surcharge due?

Is the surcharge required to be printed separately on the customer's receipt?

How do retailers submit the return and remit the surcharge?

Can a retailer with multiple locations remit the total surcharge amounts collected on one return?

Does the surcharge apply to Voice Over Internet Protocol (VoIP) services?

Is there a collection fee to help retailers offset the costs of collecting and remitting the surcharge?

Are any sales of prepaid wireless services exempt from the surcharge?

What is the surcharge money used for?


What is the prepaid wireless surcharge?

The prepaid wireless surcharge (surcharge) applies to retail sales of prepaid mobile phones, prepaid phone cards, and recharging those prepaid phones or cards. Examples include:

  • Selling mobile phones preloaded with a set dollar amount for minutes or units of air time;
  • Selling calling cards for mobile phones;
  • Recharging mobile phones with additional minutes or units of air time; and
  • Recharging calling cards for mobile phones.
How much is the surcharge?

The surcharge is 1% for the period January 1, 2017 through December 31, 2017. The surcharge is based on specific statutory criteria and will be determined and published annually by the Department of Revenue. 

Who must collect the surcharge?

Any retailer or telecommunications provider that sells prepaid mobile phones, prepaid phone cards, or that recharges those prepaid phones or cards must collect the surcharge from the customer and remit it to the Nebraska Department of Revenue.

How is the surcharge calculated?

The surcharge is calculated on the gross receipts for the prepaid mobile phones or prepaid phone cards prior to computing sales tax. The surcharge is not part of the tax base on which sales tax is calculated.

For example, a prepaid mobile phone is sold for $50 in a city with a combined state and local sales tax rate of 7%:
Sale of prepaid mobile phone
$  50.00
 
Prepaid wireless surcharge (1% x $50)
.50
(The retailer will collect and remit the surcharge of $0.50)

Sale of prepaid mobile phone
$  50.00
 
Sales tax (7% x $50)
    3.50
(The retailer will collect and remit the state and local sales tax of $3.50)

The customer's receipt will show:

Sale of prepaid mobile phone
$  50.00
Prepaid wireless surcharge
.50
Sales tax @ 7%
    3.50
Total
$  54.00
How does a retailer become licensed to collect the surcharge?

Retailers of prepaid wireless services, described above, must register with the Department of Revenue by submitting a Nebraska Tax Application, Form 20.  

When is the surcharge due?

Each retailer must remit the amounts collected to the Nebraska Department of Revenue by the 20th of the month following the tax period covered by the return. The reporting period is the same period you use for reporting sales tax collected.

Is the surcharge required to be printed separately on the customer’s receipt?

Yes. The surcharge must be stated separately on the receipt, invoice, or other similar document that is provided, or otherwise disclosed, to the customer.

How do retailers submit the return and remit the surcharge?

Retailers must file the Nebraska Prepaid Wireless Surcharge Return, Form E911N, with the Nebraska Department of Revenue by the 20th of the month following the reporting period. The reporting period is the same period you use for reporting sales tax collected. The Form E911N can also be filed online through Nebraska NebFile for Business.

Can a retailer with multiple locations remit the total surcharge amounts collected on one return?

Yes. Retailers will file one return for the entire company, reporting the surcharge collected at all Nebraska locations. 

Does the surcharge apply to Voice Over Internet Protocol (VoIP) services?

Yes. Sales of prepaid VoIP services are subject to the surcharge.

Is there a collection fee to help retailers offset the costs of collecting and remitting the surcharge?

Yes. Retailers receive a commission of 3% of the amount of the surcharge collected and remitted.

Are any sales of prepaid wireless services exempt from the surcharge?

Yes. If the prepaid wireless service is for 10 minutes or less, or in an amount of $5 or less, the retailer may elect not to collect the surcharge.

Sales of prepaid wireless services made to entities exempt from sales tax are also exempt from the surcharge. Click here for a listing of Nebraska Sales Tax Exemptions

What is the surcharge money used for?
The surcharge will assist Nebraska communities in providing emergency 911 services and in providing a statewide system for specialized telecommunications equipment for qualified hearing impaired persons.


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