The State is Fixing a Loophole That Let "Unlimited" Prepaid Phone Plans Skip 911 Fees

The Bottom Line

If you buy a prepaid, "unlimited" wireless phone plan, you are going to see a few extra dollars in state fees added to your bill. This legislation closes a recent loophole that accidentally exempted unlimited prepaid plans from the standard state surcharges that fund 911 dispatchers, the 988 mental health crisis hotline, and disability communication access.

What This Bill Actually Does

To understand this legislation, you have to look back to a quiet but highly impactful decision made in June 2025. The Colorado Department of Revenue issued a private letter ruling regarding how state telecommunications fees are collected. For years, the law stated that these fees applied to "prepaid wireless" plans—but it specifically defined those plans as services sold in predetermined units (like minutes or megabytes) that "decline with use."

Telecommunications companies pointed out a glaring technicality: modern unlimited prepaid plans do not have a declining balance of minutes or data. Because they offer unlimited use for a fixed period of time (usually a month), they didn't technically fit the legal definition. Suddenly, a massive chunk of prepaid wireless plans were legally exempt from paying into Colorado's emergency and accessibility funds, creating a major headache for the state's budget and local emergency responders.

HB26-1115 is the legislative fix to that specific headache. It rewrites the definition of a prepaid wireless telecommunications service to explicitly include plans that provide "unlimited use of the service for a fixed period of time." By changing a few words, the bill puts unlimited prepaid plans back on the hook for three specific state charges: the 911 surcharge, the 988 crisis hotline charge, and the Telephone Disability Access (TDA) charge.

Additionally, the bill targets providers who offer free prepaid phones through federally supported programs (like Lifeline). Previously, these providers had to remit the 911 fee but weren't clearly required to pay the 988 crisis fee. This bill closes that gap, requiring them to cover the 988 charge for each Colorado transaction, and gives the Department of Revenue the power to audit and enforce these collections electronically. Finally, it allows the Department of Revenue to securely share tax data regarding these fees with the Public Utilities Commission to ensure everyone is paying their fair share.

What It Means for You

If you rely on a prepaid cell phone plan—whether that is through Boost Mobile, Mint Mobile, Cricket, or a straight-from-the-carrier prepaid option—you are the primary person affected by this change. It is time to check your monthly receipts. If you have an "unlimited" plan, you might have enjoyed a brief, unannounced discount on state fees since mid-2025 due to that Department of Revenue ruling. This bill officially ends that discount.

You should expect to see an additional $2.61 per transaction or monthly reload tacked onto your bill. This isn't a single ambiguous tax; it is broken down into three specific charges: $2.23 for local 911 services, $0.30 for the 988 mental health crisis hotline, and $0.08 for the Telephone Disability Access program, which funds relay services for deaf and hard-of-hearing Coloradans. While $2.61 might not break the bank, it adds up to over $31 a year per line, which is a noticeable difference for families managing multiple prepaid phones on a tight budget.

If you receive a free prepaid wireless phone through a federally supported program, your actual out-of-pocket costs shouldn't change. However, your provider will now be legally responsible for remitting the 988 crisis hotline fee to the state on your behalf. The state essentially defines your "purchase" in this context as the exchange of your consumer information for their federal reimbursement, ensuring that even subsidized phones contribute to the statewide mental health network.

Ultimately, this bill is about parity. Coloradans on traditional, post-paid cellphone contracts have been paying these fees all along. By closing the loophole on prepaid unlimited plans, the state ensures that local 911 dispatch centers and the 988 crisis hotline don't face sudden, massive budget shortfalls just because consumer habits have shifted away from "pay-by-the-minute" burner phones to modern unlimited prepaid plans.

What It Means for Your Business

If your business sells prepaid wireless services—whether you operate a big-box retail electronics department, a local convenience store, or an independent mobile dealer franchise—your point-of-sale systems require an immediate audit. You must ensure you are actively collecting the 911, 988, and TDA surcharges on all prepaid plans, particularly the unlimited ones that were briefly considered exempt under the 2025 Department of Revenue ruling. Failing to collect and remit these fees puts your business squarely in the crosshairs of state tax penalties.

The legislation also centralizes and modernizes how you handle compliance. It puts the 988 crisis hotline charge fully under the administration of the Department of Revenue and explicitly allows the state to mandate electronic filing and payment for these specific returns. If your business utilizes federally supported services to offer free mobile plans to eligible low-income residents, you are now explicitly required to remit the 988 fee for those transactions. To offset the administrative burden of collecting and remitting these funds, the state continues to allow sellers and providers to deduct and retain a 3.3% vendor fee from the 988 charges collected.

For businesses outside the telecommunications and retail space, the impact is strictly budgetary, albeit minor. If your company issues cell phones to employees and uses bulk prepaid unlimited plans to keep operational costs predictable, you need to factor an extra $2.61 per line, per month into your IT or telecommunications budget. It is a small margin, but for logistics companies, construction crews, or sales teams carrying dozens of company-issued prepaid devices, it is a line item worth updating in your financial forecasts.

Follow the Money

According to the nonpartisan fiscal note, this legislation doesn't technically "raise" taxes or generate new revenue streams; rather, it functions as a tourniquet to stop a sudden bleed in state funds. By closing the unlimited plan loophole, the state maintains the historical revenue levels required to operate local 911 authorities, the 988 Crisis Hotline Enterprise, and the Communication Services for People with Disabilities Enterprise. Without this bill, the state was facing an indeterminate, but likely significant, drop in funding for these critical emergency and accessibility services.

From an expenditure standpoint, the bill costs the state virtually nothing to implement. The Department of Revenue and the Public Utilities Commission will experience a minimal workload increase to update their public guidance, adjust tax reporting forms, and manage the newly authorized data-sharing agreements between agencies. It is worth noting that while the 988 hotline and disability access services operate as exempt enterprises, the revenue generated from the 911 fees remains subject to Colorado's TABOR (Taxpayer's Bill of Rights) limits.

Where This Bill Stands

HB26-1115 is currently Signed Into Law. The latest official action came on 03/26/2026: Governor Signed.

That means the legislative process is complete and the bill is now law. The remaining questions are about implementation timing and how agencies, businesses, or local governments respond.