The South Carolina Administrative Law Court ruled that the taxpayer was required to collect sales tax on its retail sales of prepaid cellular telephone service.  The taxpayer argued that its sales did not constitute “prepaid wireless calling arrangements,” which must be “sold in units or dollars which decline with use in a known amount.”  Because it sold unlimited plans, the taxpayer contended its sales did not meet this test.  The court disagreed, finding the statute to unambiguously subject prepaid plans to sales tax.  Although the taxpayer’s prepaid plans were unlimited, they were still subject to a known unit and known expiration date of 30 days.

Unlimited Phone Store, LLC v. S.C. Dep’t of Revenue, No. 16-ALJ-17-0399-CC