Funding Wireless Enhanced 9-1-1 in the U.S. through Fees
Today it is a fact of life in the U.S. that most adults (and many children) own and carry wireless phones. Based on industry surveys, 4 out of 10 adults and roughly 45% of American children live in wireless-only households. With this in mind, it is important to know that as wireless technology has improved so too have some vital government services.
Some of the most important government services available to the public involve the provision of emergency assistance. Emergency services generally include three main functions:
1) Police (safety/crime prevention);
2) Fire (fire/rescue); and
3) Emergency medical services (ambulatory).
Depending on how local governments organize such services, these functions are at times carried out by a single organization or at other times by separate entities. Americans know that the easiest way to contact any of these important government functions is as simple as pressing three buttons on any available phone, “9-1-1.” Today, most 9-1-1 systems not only connect you to emergency services but also automatically report the telephone number and location of the calls made from wireline phones, a capability called Enhanced 9-1-1, or E9-1-1.
Revenue to Pay for Enhanced 9-1-1 Services Often Comes From Fees
While most 9-1-1 systems carry enhanced 9-1-1 features, not all states and localities make these features available for wireless customers. Rather, these features are only available for wireless customers in those states that are able to properly fund them. The necessary revenue to pay for this feature often comes from fees. For individuals with wireless subscription services enhanced 9-1-1 fees are often included as a line item on your monthly bill. However, for those of you that may purchase pre-paid wireless services, the fee is generally collected at the point of sale.
Today, 35 of 50 states collect wireless E9-1-1 fees on point of sale transactions involving pre-paid wireless services, and the list of states imposing such fees is constantly growing. These fees general fall into two categories:
1) Rate based fees (i.e. fees based on a % of the sales price); or
2) Dollar based fees (i.e. a flat fee applied on each transaction).
As more and more states impose E-9-1-1 fees to fund enhances services, there seems to be a somewhat even divide between those states which impose dollar based fees and those which impose rate based fees.
E9-1-1 fees based on a percentage of the sales price
The following states currently impose E9-1-1 fees based on a percentage of the sales price of pre-paid wireless services: AZ; CO; DC; ID; IL (Chicago has its own separate percentage based fee); KS; LA; MI; ND; NE; OH; RI; SD; TX; UT.
E9-1-1 fees using a flat dollar amount
The following states currently impose E9-1-1 fees using a flat dollar amount: AL; AR; CT; DE; FL;GA; IA; IN; MD; ME; MN (E-9-1-1 + TAM); MS; NC OK; PA; SC; TN; VA; WA (split between county & state); WI.
New states are adopting E9-1-1 fees every year. Additionally in those states where such fees currently exist, the rates and dollar amounts imposed change fairly frequently depending on a state’s particular funding need. Sovos Compliance is committed to tracking and maintaining these rules in both Taxware Enterprise and our Sales and Use Tax System so our clients can be assured accurate results when conducting transactions involving pre-paid wireless services.
