Tennessee § 7-86-128 - Collection of 911 surcharge.

§ 7-86-128. Collection of 911 surcharge.

When a dealer collects the sales price for a retail sale of communications service or prepaid communications service from a consumer, such dealer shall collect a 911 surcharge of one dollar and sixteen cents ($1.16). Dealers shall be entitled to retain as an administrative fee an amount equal to two percent (2%) of the collections of the 911 surcharge on the retail sale of communications service. Any change in the 911 surcharge amount set in subdivision (a)(1) shall be set at a level that is sufficient to fully fund the mandatory disbursements to emergency communications districts, the operational expenses of the state emergency communications board, referred to as “board” in this section, and the Tennessee relay services/telecommunications devices access program (TRS/TDAP program) as provided in § 65-21-115. In the event of any revenue shortfall, mandatory disbursements to the emergency communications districts and the TRS/TDAP program shall be given priority. Revenues from the surcharge authorized in this section shall be used to support the long-term solvency and operations of emergency communications districts, as well as reasonable and necessary administrative and operational expenses of the board and the 911 Emergency Communications Fund. If the sales price for a retail sale of communications service is collected by a dealer less frequently than monthly, the 911 surcharge shall still apply and be collected for each month or partial month for which the sales price is collected. The board may increase the 911 surcharge upon determination of a need for additional funds after a public hearing before the board. At least thirty (30) days' notice shall be provided before the public hearing. There shall be opportunity for public comment at the public hearing. No increase in the 911 surcharge shall take effect until ratified by a joint resolution of the general assembly. Not less than ninety (90) days prior to the rate change, notice of the change shall be provided to all dealers in the manner that notices are provided of changes in sales tax rates pursuant to title 67. The board may decrease the amount of the 911 surcharge after providing thirty (30) days' notice and opportunity for public comment at a public hearing of the board. After determination of a decrease, the board must give at least sixty (60) days' notice to the speaker of the house of representatives, the speaker of the senate, and the governor. Not less than ninety (90) days prior to the rate change, notice of the change shall be provided to all dealers in the manner that notices are provided of changes in sales tax rates pursuant to title 67. It is the intent of the general assembly that the 911 surcharge be established at the lowest rate practicable consistent with the purposes of this section. The board shall report annually to the finance, ways and means committees of the senate and house of representatives on the financial status and solvency of emergency communications districts, status of the implementation of a uniform statewide 911 system and the status, level and solvency of the 911 Emergency Communications Fund. The 911 surcharge applicable to any multi-channel or other complex service that is capable of simultaneously carrying multiple voice and data transmissions, including, but not limited to, private branch exchange service, that is provided to a fixed location with a unique street address or physically identifiable location shall be calculated by applying one (1) 911 surcharge for each simultaneous outbound call that can be placed to 911 using such service. The maximum number of 911 surcharges that may be imposed on a single subscriber of retail communications services provided to a fixed location shall not exceed two hundred (200) surcharges per building with a unique street address or physically identifiable location. A communications service that is priced lower than five dollars ($5.00) per month or a prepaid communications service priced below a one-time fee of less than ten dollars ($10.00) shall not constitute a retail communications service for purposes of the 911 surcharge and shall not be subject to a 911 surcharge in accordance with subsection (a). Dealers of communications service shall collect the 911 surcharge from their customers and, when practicable, display the 911 surcharge as a separate line item on customer bills or invoices. Dealers of prepaid communications service shall collect the 911 surcharge at the point of the sale. 911 surcharge revenue actually collected by a dealer shall be remitted to the department of revenue monthly. No additional or local 911 surcharges on communications service or prepaid communications service shall be permitted. Dealers of retail communications service shall have no obligation to remit surcharges that they are unable to collect from subscribers. Dealers of communications service and prepaid communications service shall remit the 911 surcharge to the department of revenue in the manner provided by the Retailers' Sales Tax Act, compiled in title 67, chapter 6, with respect to the sales and use taxes. The department of revenue shall establish registration and payment procedures for such dealers that substantially coincide with the registration and payment procedures that apply under the Retailers' Sales Tax Act. A dealer of prepaid communications shall be permitted to deduct and retain up to two percent (2%) of 911 surcharges that are collected by the dealer from the consumers. The audit and appeal procedures applicable under title 67, chapter 1, shall apply to the 911 surcharges on communications service and prepaid communications service. Any audit of a dealer of communications service or prepaid communications service shall coincide with the department's normal auditing of the dealer for sales and use tax purposes. The penalty and interest provisions under title 67, chapter 1, part 8, shall apply to the 911 surcharges on communications service and prepaid communications service. The department of revenue shall pay all remitted 911 surcharges to the board within thirty (30) days of receipt, for use of the board in accordance with part 3 of this chapter. The department of revenue may deduct an administration fee of one and one hundred twenty-five thousandths percent (1.125%) of the collected charges. The 911 surcharge is the liability of the subscriber and not of the dealer. Dealers are authorized to demand payment from any subscriber who fails to pay any authorized 911 surcharge, and may take legal action, in the sole discretion of the dealer, to collect the 911 surcharge from any such subscriber, or may, in the alternative, and without any liability to such subscriber for any losses or damages that result from termination, terminate all service to such subscriber. Notwithstanding this section to the contrary, the board may withhold such distribution to an emergency communications district, if the district is operating in, or fails to correct a specific violation of state law. This may include, but not be limited to, the failure to submit an annual budget or audit, operating contrary to the open meeting requirements of title 8, chapter 44, part 1, or failure to comply with any requirements of this chapter 86. Further, the board may also withhold such distribution if it deems that the district is not taking sufficient actions or acting in good faith to establish, maintain, or advance E911 service for the citizens of an emergency communications district. The department of revenue shall have the exclusive authority to audit and to bring any legal action to collect the 911 surcharge collected and remitted by any dealer. The exclusive authority by the department includes, but is not limited to, nonpayment or under-collection errors or other causes of action that relate to the collection of 911 surcharges. Acts 2010, ch. 774, § 3; 2014, ch. 795, § 4; 2016, ch. 1047, §§ 2-4, 6. Compiler's Notes. Acts 2014, ch. 795, § 1 provided that the act, which amended this section, shall be known and may be cited as the “911 Funding Modernization and IP Transition Act of 2014”. Amendments. The 2014 amendment, effective January 1, 2015, rewrote the section which read: “(a) As used in this section, unless the context otherwise requires:“(1) ‘Board’ means the emergency communications board established under § 7-86-302 ;“(2) ‘Consumer’ means a person who purchases prepaid wireless telecommunications service in a retail transaction;“(3) ‘Department’ means the department of revenue;“(4) ‘Prepaid wireless emergency telephone service charge" means the charge that is required to be collected by a seller from a consumer in the amount established under this section;“(5) ‘Prepaid wireless telecommunications service’ means a wireless telecommunications service that allows a caller to dial 911 to access the 911 system, which service must be paid for in advance and is sold in predetermined units or dollars of which the number declines with use in a known amount;“(6) ‘Provider’ means a person that provides prepaid wireless telecommunications service pursuant to a license issued by the federal communications commission;“(7) ‘Retail transaction’ means the purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale, and the purchase of more than one (1) item that provides prepaid wireless telecommunications service, when such items are sold separately, constitutes more than one (1) retail transaction;“(8) ‘Seller’ means a person who sells prepaid wireless telecommunications service to another person; and“(9) ‘Wireless telecommunications service’ means commercial mobile radio service as defined by 47 CFR 20.3.“(b)(1)(A) A statewide prepaid wireless emergency telephone charge of fifty-three cents (53cent(s)), or an adjusted amount as provided in subdivision (b)(6), shall be imposed on each retail transaction in lieu of the charge imposed pursuant to § 7-86-108 .“(B) Notwithstanding (b)(1)(A), if a minimal amount of prepaid wireless telecommunications service is sold with a prepaid wireless device and a single, non-itemized price is charged for the service, then the seller may elect not to apply the service charge imposed by this subdivision (b)(1). For purposes of this subdivision (b)(1)(B), a minimal amount of service means an amount of service denominated as either ten (10) minutes or less or five dollars ($5.00) or less.“(2) The prepaid wireless emergency telephone service charge shall be collected by the seller from the consumer with respect to each retail transaction occurring in this state. The amount of the prepaid wireless emergency telephone service charge shall be either separately stated on an invoice, receipt, or other similar document that is provided to the consumer by the seller, or otherwise disclosed to the consumer.“(3) For purposes of this subsection (b), a retail transaction that is effected in person by a consumer at a business location of the seller shall be treated as occurring in this state if that business location is in this state, and any other retail transaction shall be treated as occurring in this state if the retail transaction is treated as occurring in this state for purposes of § 67-6-230 .“(4) The prepaid wireless emergency telephone service charge is the liability of the consumer and not of the seller or of any provider, except that the seller shall be liable to remit all charges that the seller is deemed to collect where the amount of the charge has not been separately stated on an invoice, receipt, or other similar document provided to the consumer by the seller.“(5) The amount of the prepaid wireless emergency telephone service charge that is collected by a seller from a consumer, if such amount is separately stated on an invoice, receipt, or other similar document provided to the consumer by the seller, shall not be included in the base for measuring any tax, fee, surcharge, or other charge that is imposed by this state, any political subdivision of this state, or any intergovernmental agency.“(6)(A) If the emergency telephone service charge imposed under § 7-86-108(a)(1)(B)(i)(a) is increased or reduced pursuant to the provisions of such subdivision, then the prepaid wireless emergency telephone charge imposed by subdivision (b)(1) shall be increased or reduced in proportion to such change.“(B) The proportional increase or reduction shall be effective on the first day of the first calendar month to occur at least sixty (60) days after notification is received by the department from the board as provided in § 7-86-108 (a)(1)(B)(i)(b).“(C) The department shall provide notice on its web site of an increase or reduction that occurs pursuant to this subdivision (b)(6) at least thirty (30) days before such change takes effect.“(c)(1) Prepaid wireless emergency telephone service charges collected by sellers shall be remitted to the department at the times and in the manner provided by title 67, chapter 6, with respect to the sales and use taxes. The department shall establish registration and payment procedures that substantially coincide with the registration and payment procedures that apply under title 67, chapter 6.“(2) A seller shall be permitted to deduct and retain three percent (3%) of prepaid wireless E911 charges that are collected by the seller from consumers.“(3) The audit and appeal procedures applicable under title 67, chapter 1 shall apply to the prepaid wireless emergency telephone service charge.“(4) The department shall establish procedures by which a seller of prepaid wireless telecommunications service may document that a sale is not a retail transaction, which procedures shall substantially coincide with the procedures for documenting sale for resale transactions for sales and use purposes under title 67, chapter 6.“(5) The department shall pay all remitted prepaid wireless emergency telephone service charges over to the board within thirty (30) days of receipt, for use by the board in accordance with part 3 of this chapter. The department may deduct an amount, not to exceed two percent (2%) of collected charges, to be retained by the department to reimburse its direct costs of administering the collection and remittance of prepaid wireless emergency telephone service charges.“(d)(1) A seller that is not a provider shall be entitled to the immunity and liability protections under §§ 7-86-319 and 7-86-320 , notwithstanding the requirement in § 7-86-320 (a) regarding compliance with federal communications commission order number 05-116.“(2) A provider shall be entitled to the immunity and liability protections under §§ 7-86-319 and 7-86-320.“(3) In addition to the protection from liability provided by subdivisions (d)(1) and (2), each provider and seller shall be entitled to the further protection from liability, if any, that is provided to providers and sellers of wireless telecommunications service that is not prepaid wireless telecommunications service pursuant to §§ 7-86-319 and 7-86-320.“(e) The prepaid wireless emergency telephone service charge imposed by this section shall be the only E911 funding obligation imposed with respect to prepaid wireless telecommunications service in this state, and no tax, fee, surcharge, or other charge shall be imposed by this state, any political subdivision of this state, or any intergovernmental agency, for E911 funding purposes, upon any provider, seller, or consumer with respect to the sale, purchase, use or provision of prepaid wireless telecommunications service.” The 2016 amendment, in (a)(1), deleted “Effective January 1, 2015,” from the beginning, and added the last sentence; rewrote (e) and (f) which read: “(e) The 911 surcharge shall, when practicable, be displayed as a separate line item by dealers of communications service on customer bills or invoices. 911 surcharge revenue actually collected by a dealer shall be remitted to the board every two (2) months. No additional or local 911 surcharges on retail communications service shall be permitted. Dealers of retail communications service shall have no obligation to remit surcharges that they are unable to collect from subscribers.“(f)(1) For prepaid communications service, the surcharge shall be collected at the point of sale and remitted to the department of revenue at the times and in the manner provided by title 67, chapter 6, with respect to the sales and use taxes. The department of revenue shall establish registration and payment procedures that substantially coincide with the registration and payment procedures that apply under title 67, chapter 6.“(2) A dealer of prepaid communications service shall be permitted to deduct and retain up to three percent (3%) of 911 surcharges that are collected by the dealer from consumers.“(3) The audit and appeal procedures applicable under title 67, chapter 1, shall apply to the 911 surcharges on prepaid communications service.“(4) The department of revenue shall pay all remitted 911 surcharges to the board within thirty (30) days of receipt, for use by the board in accordance with part 3 of this chapter. The department of revenue may deduct an amount, up to two percent (2%) of collected charges, to be retained by the department of revenue to reimburse its direct costs of administering the collection and remittance of 911 surcharges.”; and added (i). Effective Dates. Acts 2014, ch. 795, § 15. January 1, 2015. Acts 2016, ch. 1047, § 7. July 1, 2017. Attorney General Opinions. Emergency telephone charges on wireless phone service. OAG 13-43, 2013 Tenn. AG LEXIS 43 (6/5/13).