(1) As used in this section:

(a) "Consumer" means a person who purchases prepaid wireless telecommunications service in a retail transaction.

(b) "Department" means the department of revenue.

(c) "Prepaid wireless E911 charge" means the charge that is required to be collected by a seller from a consumer under subsection (2) of this section.

(d) "Provider" means a person that provides prepaid wireless telecommunications service.

(e) "Retail transaction" means the purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale.

(f) "Seller" means a person who sells prepaid wireless telecommunications service to another person.

(2) (a) A prepaid wireless E911 charge of one and four-tenths percent of the price of the retail transaction is hereby imposed on each retail transaction.

(b)

(I) The seller shall collect the prepaid wireless E911 charge from the consumer on each retail transaction occurring in this state. The amount of the prepaid wireless E911 charge shall be either disclosed to the consumer or separately stated on an invoice, receipt, or other similar document the seller provides to the consumer. A seller shall elect to either disclose or separately state the charge and shall not change the election without the written consent of the department.

(II) For purposes of this paragraph (b), a retail transaction occurs in Colorado if:

(A) The consumer effects the retail transaction in person at a business location in Colorado;

(B) If sub-subparagraph (A) of this subparagraph (II) does not apply, the product is delivered to the consumer at a Colorado address provided to the seller;

(C) If sub-subparagraphs (A) and (B) of this subparagraph (II) do not apply, the seller's records, maintained in the ordinary course of business, indicate that the consumer's address is in Colorado and the records are not made or kept in bad faith;

(D) If sub-subparagraphs (A) to (C) of this subparagraph (II) do not apply, the consumer gives a Colorado address during the consummation of the sale, including the consumer's payment instrument if no other address is available, and the address is not given in bad faith; or

(E) If sub-subparagraphs (A) to (D) of this subparagraph (II) do not apply, the mobile telephone number is associated with a Colorado location.

(c) The prepaid wireless E911 charge is the liability of the consumer and not of the seller or of any provider; except that the seller shall be liable to remit all prepaid wireless E911 charges that the seller collects from consumers as provided in subsection (3) of this section. The seller shall be deemed to have collected the charge notwithstanding that the amount of the charge has neither been separately disclosed nor stated on an invoice, receipt, or other similar document the seller provides to the consumer.

(d) The amount of the prepaid wireless E911 charge that is collected by a seller from a consumer shall not be included in the base for measuring any tax, fee, surcharge, or other charge that is imposed by this state, any political subdivision of this state, or any intergovernmental agency.

(3) (a) The seller shall remit any collected prepaid wireless E911 charges to the department at the times and in the manner provided in part 1 of article 26 of title 39, C.R.S. The department shall establish, by rule, registration and payment procedures that substantially coincide with the registration and payment procedures that apply under part 1 of article 26 of title 39, C.R.S. A seller is subject to the penalties under part 1 of article 26 of title 39, C.R.S., for failure to collect or remit a prepaid wireless E911 charge in accordance with this section.

(b)

(I) Effective July 1, 2011, a seller may deduct and retain three and three-tenths percent of the prepaid wireless E911 charges that are collected by the seller from consumers.

(II) Repealed.

(c) The audit and appeal procedures applicable to the state sales tax under part 1 of article 26 of title 39, C.R.S., shall apply to prepaid wireless E911 charges.

(d) The department shall establish procedures by which a seller may document that a transaction is not a retail transaction, which procedures shall substantially coincide with the procedures for documenting that a sale was wholesale for purposes of the sales tax under part 1 of article 26 of title 39, C.R.S.

(e)

(I) Remittances of prepaid wireless E911 charges received by the department are collections for thelocal governing body, not general revenues of the state, and shall be held in trust in the prepaid wireless trust cash fund, which is hereby created. Except as provided in subparagraph (II) of this paragraph (e), the department shall transmit the moneys in the fund to each governing body within sixty days after the department receives the money in accordance with section 29-2-106 for use by such governing body for the purposes permitted under section 29-11-104.

(II) The department may expend an amount, not to exceed three percent of the collected charges in the prepaid wireless trust cash fund, necessary to reimburse the department for its direct costs of administering the collection and remittance of prepaid wireless E911 charges; except that the department may expend up to an additional four hundred fifty thousand dollars from January 1, 2011, through January 1, 2012, to cover the initial cost of establishing the collection and remittance process.

(III) The public utilities commission shall establish a formula for distribution of revenues from the prepaid wireless E911 charge based upon the governing authority's portion of the total 911 wireless call volume. The public utilities commission, or its designee, shall collect and transmit the percentage of wireless calls processed by each public safety answering point to the department by November 15 of each year. The public utilities commission may promulgate rules to implement this subparagraph (III).

(4) The prepaid wireless E911 charge imposed by this section shall be the only direct E911 funding obligation imposed with respect to prepaid wireless telecommunications service in this state. No tax, fee, surcharge, or other charge to fund E911 shall be imposed by this state, any political subdivision of this state, or any intergovernmental agency upon a provider, seller, or consumer with respect to the sale, purchase, use, or provision of prepaid wireless telecommunications service.