Tax-free prepaid in California is going to end Jan 1, 2016. That's when a new law called AB-1717 goes into effect. It will shift California's state and local taxes on prepaid mobile service from being business taxes imposed on mobile operators to a new point of sale tax on end users. AB-1717 was sponsored by the CTIA, the mobile operators trade and lobby group, and seems to give operators a giant windfall, although the new law's proponents say it will give state and local governments a modest increase in tax revenue.
Under the new law, all the state and local taxes on prepaid airtime will be lumped into a new end-user tax on prepaid service called the Prepaid MTS Surcharge. The MTS tax rate will be calculated each year by the California Board of Equalization. The rate for 2016 will be a