Prepaid Telephone Calling Service
What Tax is Due?
The general state and applicable local and transit rates of sales and use tax apply to the gross receipts derived from the sale or recharge of prepaid telephone calling service. The tax applies regardless of whether tangible personal property, such as a card or a telephone, is transferred. The tax applies to a service that is sold in conjunction with prepaid wireless calling service. Prepaid wireless calling service is taxable at the point of sale instead of at the point of use and is sourced in accordance with N.C. Gen. Stat. § 105-164.4B.
Prepaid telephone calling service taxed under N.C. Gen. Stat. § 105-164.4(a)(4d) is not subject to tax as a telecommunications service.
How to File and Pay?
Tax due on the sale or recharge of prepaid telephone calling service is reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.
How Do I Find More Resources?
- 911 Service Charge for Prepaid Wireless Telecommunications Service Webpage
- Sales and Use Tax Bulletin 80 - Telecommunication Service, Ancillary Service, Prepaid Telephone Calling Service, and Other Related Topics