Prepaid Wireless Calling Services Now Subject to Sales and Use Tax

CHARLESTON, W.Va. -- Due to Legislative action, West Virginia law with relation to sales of prepaid wireless calling service has changed. Retailers are mandated by statute to collect the Consumer Sales and Use tax on prepaid wireless calling services, such as wireless airtime cards, prepaid cellular phone cards, prepaid cellular rechargeable minute cards and prepaid wireless ring tone download cards on and after July 1, 2008.

West Virginia Code section 11-15-2(b)(13) states:

“Prepaid wireless calling service” means a telecommunications service that provides the right to utilize 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 advance that is sold in predetermined units or dollars of which the number decline with use in a known amount.”

“Such products that fall within the aforementioned definition are subject to Sales and Use tax at the regular 6% service tax rate,” said State Tax Commissioner Christopher G. Morris. During the 2008 Legislative session, West Virginia lawmakers passed a bill mandating the tax on prepaid wireless calling services.

Note that the statutory change applies only to prepaid wireless calling services. It does not apply to:

• Prepaid land line (i.e., wired) phone cards
• Prepaid land line rechargeable minute cards
• Prepaid music download cards, unless they are sold as for use with or by delivery through mobile wireless service
• Prepaid game download cards, unless they are sold as for use with or by delivery through mobile wireless service
• Prepaid internet access cards, unless they are sold as for use with or by delivery through mobile wireless service and
• Gift Cards, unless they are sold as for use with or by delivery through mobile wireless service

Retailers must begin collecting, remitting and reporting the Consumer Sales and Service tax and Use tax on prepaid wireless calling services beginning July 1, 2008.

“I want to be sure that all West Virginia retailers are aware of the upcoming change and plan accordingly,” Morris said.

If you have any questions, contact the West Virginia State Tax Department at (304) 558-3333 or toll free at 1- 800-982-8297.

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