A new state sales tax on prepaid cellphones in Missouri to help fund 911 services may provide some welcome relief to Dent County, where a 911 surcharge on landlines is falling short.
The tax took effect Jan. 1.
The impact of the new tax isn’t known yet, but it could help offset declining revenues from the 4 percent surcharge on CenturyLink landlines that once brought in $50,000 a year for 911 operations at the county sheriff’s office.
With the number of landlines decreasing each year, presiding commissioner Darrell Skiles said the surcharge produced only $38,246 last year, compared to $45,668 in 2017.
“The 911 fund is funded by a landline surcharge,” he said. “So as landlines get dropped, that revenue has just fallen off. It is not at all covering the cost of the 911 system.”
Using some of the 911 fund reserves, the county commission transferred $41,678 to the sheriff’s fund for 911 operations in 2018, or almost $5,000 less than the previous year, due to the shrinking revenue from the surcharge.
CenturyLink is the only provider that collects the surcharge, even though some Dent County residents are served by other phone companies. The money comes primarily from the 729 and 739 phone exchanges.
“It really was a small area but at one time it did generate right at $50,000 a year,” Skiles said. “It never really fully funded the cost of 911, but it did allow them some funding to buy the equipment, put 911 in and cover some of the cost of dispatching.”
When the 911 equipment had to be upgraded in 2016, the county paid the more than $100,000 out of general revenue due to the low balance in the 911 fund.
“Every year we figure out how much we can transfer from the 911 fund to the sheriff’s fund to help cover the costs,” Skiles said. “It leaves very little to cover equipment. That’s how we ended up paying the bulk of the expense out of general revenue for the upgrade.”
In addition to the charge on prepaid cellphones, Missouri’s new law allows local governments to ask voters to replace their current 911 sales taxes or landline phone taxes with a new monthly fee of up to $1 that would be charged both to landline phones and traditional wireless phone service.
The new fees are intended to improve Missouri’s patchwork of 911 centers, which range from outdated to modern. Missouri is currently the only state not collecting a tax or fee on wireless devices for 911 services, although more than 80 percent of 911 calls come from a wireless device.
Prepaid service makes up about 20 percent of the wireless phone subscriptions nationwide, according to reports.
The new Missouri law imposes a 3 percent sales tax on the amount of prepaid wireless phone service over $15, meaning someone buying a $40 prepaid phone card would pay tax on $25 of it, amounting to a fee of 75 cents.
The new tax could affect tens of thousands of retailers that sell prepaid phone service, including department stores, grocers, gas stations, pharmacies, hardware stores and even some liquor stores, according to the Missouri Retailers Association.
The law gives retailers an incentive to immediately collect the tax. For the first month, they get to keep all the revenue. Starting in February, the state will get to keep a share. Eventually, revenue will go into a state fund that distributes part of the money back to local entities for 911 call centers.
Missouri’s new cellphone tax for 911 service was decades in the making. Statewide voters in 1999 and 2002 rejected ballot measures that would have imposed a monthly fee of up to 50 cents on wireless phones to fund enhanced 911 service.
State lawmakers then struggled to come up with an alternative. That left Missouri and Wisconsin as the only states that weren’t funding 911 call centers with taxes or fees on wireless phone service, according to the National Emergency Number Association.
A report produced a year ago by the Missouri Department of Public Safety said the state “has a disjointed and inefficient system” for handling 911 calls.
Missouri has 185 independent emergency call centers. The report said 28 counties lacked the ability to pinpoint the location of callers from cellphones, including 16 rural counties that couldn’t see any caller information.
Skiles said the Dent County system is much improved since the equipment upgrade in 2016, but called the county’s 911 fund “an area of concern.”
“We really came out in good shape in general revenue and the other funds, but I can tell you real fast, the 911 fund, we’ve got real problems there,” he said.
Whatever the county decides to do will require voter approval.
“We’ll take a look at that law and see how that would work,” Skiles said. “We’ll have to get some more information on that, but that it is an option.”
Some information for this story was provided by the Associated Press.