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E911 Excise Tax - Effective January 1, 2014


E911 Excise Tax
Effective January 1, 2014:  Beginning January 1, 2014, prepaid wireless telecommunications retailers rather than service providers will be liable for remitting the E911 excise tax on prepaid wireless telecommunications service.  Laws 2012, Chapter 198 (HB 2094) established a prepaid wireless telecommunications E911 excise tax (A.R.S. §§ 42-5401 through 42-5404). The tax is 0.80% of the gross proceeds of sales or gross income from the retail sale of prepaid wireless telecommunications services. Retailers are authorized to retain 3% of the cost of the tax that they collect from their customers. The tax is to be reported under Business Class 912. Retailers should use the following formula for calculating the 3% that they may retain:  
Multiply the gross receipts from retail sales of prepaid wireless telecommunications services by 3%.  This amount should be taken as a deduction from the gross amount.  For purposes of the prepaid wireless telecommunications excise tax, the gross amount should not include the tax collected.  Use deduction code 564 to report the allowed deduction.  The tax rate of .008 should be applied to the net taxable amount to arrive at the total tax amount.  A sample of how a transaction would appear on a Form TPT-1 is shown below:

Gross Amount
Deduction Amount
Net taxable Amount
Tax Rate
Total Tax Amount


Posted on Thursday, November 14, 2013 (Archive on Thursday, November 21, 2013)