New Sales and Use Tax Implications of Prepaid Calling Cards

In an effort to fund improvements to broadband Internet service in Vermont and to keep it affordable for Vermonters, there is now going to be a Universal Service Charge (USC) on prepaid calling cards beginning Jan. 1, 2020.

To better conform to federal requirements, sellers of prepaid calling cards will be required to collect the USC of 2.4%. The responsibility is entirely that of the seller of the card, not the service provider (unless the provider is the retail seller).

The USC can be paid at myVTax.vermont.gov at the same frequency Sales and Use Taxes are normally filed and paid. The first time filing Form SUT-451 (Vermont Sales and Use Tax Return) in 2020, filers will be asked whether they collect USC.

For more information visit https://www.tax.vermont.gov/business-and-corp/universal-service-charge.

With offices in Williston and Rutland Vermont, Davis & Hodgdon Associates CPAs has been assisting Vermont’s residents and entrepreneurs for more than 30 years. Our proactive approach make us more than an accounting firm – we counsel our clients on a wide range of financial and management issues, resulting in better decision making and more confidence in their success.