Nebraska Prepaid Wireless Surcharge
This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR 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.
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Retailers selling prepaid wireless telecommunications services are required to collect a surcharge on every retail sale of these services, including selling prepaid mobile phones, prepaid phone cards, and recharging prepaid phones and cards. The surcharge is 5.4% for the period January 1, 2020 through December 31, 2020. Each retailer must remit the amounts collected to the Nebraska Department of Revenue (Department) by the 20th of the month following the reporting period. See Neb. Rev. Stat. § 86-903.
October 1, 2019
Beginning January 1, 2020, the Prepaid Wireless Surcharge rate will increase from 5.3% to 5.4%.
If you are a preparer, please notify your clients of the rate increase.
The surcharge will assist Nebraska communities in providing emergency 911 services, a statewide system for specialized telecommunications equipment for qualified hearing impaired persons, and access to telecommunications services across the state. The Nebraska Public Service Commission currently collects fees from telecommunications companies to fund these services. The surcharge will replace the fees currently imposed on the telecommunications companies.
Examples of Sales Subject to the Surcharge
The sale of a prepaid mobile phone loaded with 500 minutes of prepaid wireless service for $50 is subject to the 5.4% surcharge. The surcharge and sales tax are calculated as follows, assuming a combined state and local sales tax rate of 7.0%:
Sales price of phone: $50.00
Prepaid wireless surcharge: (5.4% x $50) = $2.70
Sales tax: (7.0% x $50) = $3.50
The sale of a prepaid phone card for 60 minutes of wireless service for $15 is subject to the 5.4% surcharge. The surcharge and sales tax are calculated as follows, assuming a combined state and local sales tax rate of 6.5%:
Sales price of card: $15.00
Prepaid wireless surcharge: (5.4% x $15) = $.81
Sales tax: (6.5% x $15) = $.98
Example of Sales NOT Subject to the Surcharge
The sale of a mobile phone for $150 with no predetermined dollars or minutes of prepaid wireless services included. The sale is not subject to the prepaid wireless surcharge. The sale is subject to sales tax, assuming a 7.0% combined state and local sales tax rate:
Sales price of mobile phone: $150.00
Sales tax: (7.0% x $150) = $10.50
A retailer making sales of prepaid wireless telecommunications services must register with the Department by submitting a Nebraska Tax Application, Form 20.
The Nebraska ID number assigned to your business location for sales tax purposes will also be used for your prepaid wireless surcharge account. If you file a combined sales tax return, the Nebraska ID number for the combined sales tax return will be used for your surcharge account. There is no licensing fee associated with this surcharge.
Filing Your Nebraska Prepaid Wireless Surcharge Return
A retailer may electronically file (e-file) a Prepaid Wireless Surcharge Return through NebFile for Business or mail a Nebraska Prepaid Wireless Surcharge Return to the Department at the address indicated on the paper return. The return will be mailed to licensed retailers who are not required to file returns electronically.
E-File Your Return
E-file your Nebraska Prepaid Wireless Surcharge Return and your Nebraska and Local Sales and Use Tax Return, Form 10, through NebFile for Business. NOTE: If you are required to e-file and make payments electronically for your Nebraska and Local Sales and Use Tax Return, Form 10, you must e-file and make payments electronically for your prepaid wireless surcharge return.
For more information on e-file and e-pay requirements, click here.