Lawmakers examine tax for prepaid cellphones

2014-06-08T12:00:00Z Lawmakers examine tax for prepaid cellphonesBy LAURA HANCOCK Casper Star-Tribune The Billings Gazette
June 08, 2014 12:00 pm  • 

SHERIDAN — A state legislative committee ordered its staff to draft a bill that would add a 911 tax to prepaid cellphones.

The bill would tax people 1.5 percent when they purchase prepaid cell services in Wyoming.

Prepaid customers don’t pay the tax now. But other cellphone customers and land line customers pay it.

The tax pays for emergency service dispatch centers throughout the state, said Sen. Cale Case, R-Lander, co-chairman of the Joint Corporations, Elections and Political Subdivisions Interim Committee, which met at Sheridan City Hall on Wednesday and discussed the issue.

Paid at point of sale

A handful of wireless companies presented the committee a model bill that called for the tax. Thirty-two states and the District of Columbia have enacted bills that require the tax to be paid at the point of sale, said Cheryl Riley, of AT&T in Wyoming.

“It’s a growing part of the market,” Riley said, explaining that 24 percent of wireless subscribers are prepaid.

Eighty percent of prepaid customers purchase their service outside a wireless provider store, she said.

AT&T and Verizon, for instance, sell prepaid packages, but most customers get them at Wal-Mart or Best Buy.

The tax is currently 75 cents, said John Cmelak, a tax analyst for Verizon Communications. Most people use $50 in cell service a month, he said.

The wireless companies that presented the model bill came up with the 1.5 percent tax figure because some prepaid customers buy a small number of cell minutes and others buy a larger number.

A percentage is a way to ensure people are taxed fairly, Cmelak said.

Lower-income customers

Prepaid customers tend to be lower-income, Cmelak said.

Rep. Jim Byrd, D-Cheyenne, wants to make sure prepaid customers aren’t taxed more or less than other phone users. He requested that the wireless carriers provide information about the average purchase of prepaid service.

The bill might change once committee members review it.

The tax could become a flat amount, such as 75 cents, if the research suggests that a 1.5 percent increase isn’t fair, Byrd said.

Casper Police Chief Jim Wetzel said many residents who call 911 are prepaid users.

He supports taxing prepaid customers.

The 911 tax funds a majority of the operations in the city’s new dispatch center, he said.

“The legislation for the prepaid 911 (tax could be) a critical funding stream,” he said.

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Follow The Billings Gazette

Popular Stories

Get weekly ads via e-mail

Deals & Offers

Featured Businesses