§ 29-11-102.5. Imposition of Charge on Prepaid Wireless – Rules – Prepaid Wireless Trust Cash Fund – Rules – Definitions – Repeal

1. As used in this section:
   1. “Consumer” means a person who purchases prepaid wireless telecommunications service in a retail transaction.
   2. “Department” means the department of revenue.
   3. “Prepaid wireless 911 charge” means the charge imposed under subsection (2) of this section to pay for the expenses authorized in section 29-11-104 (2)(a).
   4. “Provider” means a person that provides prepaid wireless telecommunications service.
   5. “Retail transaction” means the purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale. For the purposes of this section, “purchase” includes exchanges of money and exchanges of nonmonetary consideration, such as consumer information required for reimbursement claims under federally supported services or programs.
   6. “Seller” means a person who sells prepaid wireless telecommunications service to another person.
2. 1. A prepaid wireless 911 charge is hereby imposed on each retail transaction. The primary purpose of the prepaid wireless 911 charge is to defray the reasonable direct and indirect costs of providing emergency telephone service. The prepaid wireless 911 charge does not raise revenue for the general expenses of government.
   2. 1. Repealed.
      2. Effective January 1, 2021, the charge is in an amount to be established annually by the commission in accordance with subsection (2)(c) of this section. The charge must be a flat amount imposed on each retail transaction in which prepaid wireless service is purchased in Colorado.
   3. On or before October 1, 2020, and on or before October 1 each year thereafter, the commission shall establish the amount of the prepaid wireless 911 charge for the next calendar year. The charge amount is calculated by adding the average of the local emergency telephone charge amounts imposed in accordance with section 29-11-102 (2) as of July 1 of that year and the amount of the 911 surcharge established for the upcoming year in accordance with section 29-11-102.3. The new amount takes effect on the following January 1.
   4. 1. 1. The seller shall collect the prepaid wireless 911 charge from the consumer on each retail transaction occurring in the state. The amount of the prepaid wireless 911 charge shall be either disclosed to the consumer or separately stated on an invoice, receipt, or other similar document the seller provides to the consumer. A seller shall elect to either disclose or separately state the charge and shall not change the election without the written consent of the department. The seller is deemed to have collected the charge notwithstanding the seller’s failure to separately disclose or state the charge on an invoice, receipt, or other similar document the seller provides to the consumer. Except as provided in subsection (2)(d)(I)(B) of this section, providers who use federally supported services or programs to offer customers free prepaid wireless telecommunications service are deemed to have collected the charge. The provider shall remit the charge for each retail transaction that occurs in Colorado. (d) (I) (A) The seller shall collect the prepaid wireless 911 charge from the consumer on each retail transaction occurring in the state. The amount of the prepaid wireless 911 charge shall be either disclosed to the consumer or separately stated on an invoice, receipt, or other similar document the seller provides to the consumer. A seller shall elect to either disclose or separately state the charge and shall not change the election without the written consent of the department. The seller is deemed to have collected the charge notwithstanding the seller’s failure to separately disclose or state the charge on an invoice, receipt, or other similar document the seller provides to the consumer. Except as provided in subsection (2)(d)(I)(B) of this section, providers who use federally supported services or programs to offer customers free prepaid wireless telecommunications service are deemed to have collected the charge. The provider shall remit the charge for each retail transaction that occurs in Colorado.
         2. A provider that pays 911 fees on federally supported services or programs pursuant to a commission order or agreement in connection with such provider’s eligible telecommunications carrier designation that is in effect as of July 10, 2020, shall continue to remit fees in accordance with that agreement. Through a formal docket process, the commission may change such agreements no more frequently than annually. No later than October 1, 2021, the commission shall complete a docket to establish the 911 fee for federally supported services or programs at one and six-tenths percent of the value of the service provided by the carrier. On any subsequent docket, the 911 fee for federally supported services or programs must not exceed one and nine-tenths percent of the value of the service provided by the carrier.
      2. For purposes of this section, a retail transaction occurs in Colorado if:
         1. The consumer effects the retail transaction in person at a business location in Colorado;
         2. If subsection (2)(d)(II)(A) of this section does not apply, the product is delivered to the consumer at a Colorado address provided to the seller;
         3. If subsections (2)(d)(II)(A) and (2)(d)(II)(B) of this section do not apply, the seller’s records, maintained in the ordinary course of business, indicate that the consumer’s address is in Colorado and the records are not made or kept in bad faith;
         4. If subsections (2)(d)(II)(A) to (2)(d)(II)(C) of this section do not apply, the consumer gives a Colorado address during the consummation of the sale, including the consumer’s payment instrument if no other address is available, and there is no indication that the address is given in bad faith; or
         5. If subsections (2)(d)(II)(A) to (2)(d)(II)(D) of this section do not apply, the mobile telephone number is associated with a Colorado location.
   5. The prepaid wireless 911 charge is the liability of the consumer and not of the seller or of any provider; except that the seller is liable to remit all prepaid wireless 911 charges that the seller collects from consumers as provided in subsection (3) of this section.
   6. The amount of the prepaid wireless 911 charge that is collected by a seller from a consumer shall not be included in the base for measuring any tax, fee, surcharge, or other charge that is imposed by the state, any political subdivision of the state, or any intergovernmental agency.
3. 1. The seller or provider who uses federally supported services or programs shall remit any collected prepaid wireless 911 charges to the department at the times and in the manner provided in part 1 of article 26 of title 39. The department shall establish, by rule, registration and payment procedures that substantially coincide with the registration and payment procedures that apply under part 1 of article 26 of title 39. A seller is subject to the penalties under part 1 of article 26 of title 39, for failure to collect or remit a prepaid wireless 911 charge in accordance with this section.
   2. A seller or provider who uses federally supported services or programs may deduct and retain three and three-tenths percent of the prepaid wireless 911 charges that are collected by the seller from consumers.
   3. The audit and appeal procedures applicable to the state sales tax under part 1 of article 26 of title 39 apply to prepaid wireless 911 charges.
   4. The department shall, by rule, establish procedures by which a seller may document that a transaction is not a retail transaction, which procedures must substantially coincide with the procedures for documenting that a sale was wholesale for purposes of the sales tax under part 1 of article 26 of title 39.
   5. 1. Remittances of prepaid wireless 911 charges received by the department are collections for the local governing body, not general revenues of the state, and shall be held in trust in the prepaid wireless trust cash fund, which is hereby created. Except as provided in subsection (3)(e)(II) of this section, the department shall transmit the money in the fund to each governing body within sixty days after the department receives the money in accordance with section 29-2-106 for use by such governing body for the purposes permitted under section 29-11-104.
      2. The department may expend an amount, not to exceed three percent of the collected charges in the prepaid wireless trust cash fund, necessary to reimburse the department for its direct costs of administering the collection and remittance of prepaid wireless 911 charges; except that the department may expend up to an additional nineteen thousand dollars in the 2020-21 fiscal year to cover the costs of implementing House Bill 20-1293, enacted in 2020.
      3. The commission shall establish a formula for distribution of revenues to governing bodies from the prepaid wireless 911 charge based upon the governing authority’s portion of the total 911 wireless call volume. The commission, or its designee, shall transmit the formula for distribution to the department by October 1 of each year, to take effect on the following January 1. The commission may promulgate rules to implement this subsection (3)(e)(III).
4. The prepaid wireless 911 charge imposed by this section shall be the only direct 911 funding obligation imposed with respect to prepaid wireless telecommunications service in the state. No tax, fee, surcharge, or other charge to fund 911 shall be imposed by the state, any political subdivision of the state, or any intergovernmental agency upon a provider, seller, or consumer with respect to the sale, purchase, use, or provision of prepaid wireless telecommunications service.
5. The department shall supply information regarding the administration of the prepaid wireless trust cash fund to the commission or a governing body upon request.

Source: L. 2010: Entire section added, (SB 10-120), ch. 371, p. 1739, § 3, effective January 1, 2011. L. 2020: Entire section amended, (HB 20-1293), ch. 267, p. 1288, § 6, effective July 10.

Editor’s note:

1. Subsection (3)(b)(II)(B) provided for the repeal of subsection (3)(b)(II), effective July 1, 2011. (See L. 2010, p. 1739 .)
2. Subsection (2)(b)(I)(B) provided for the repeal of subsection (2)(b)(I), effective July 1, 2021. (See L. 2020, p. 1288 .)