TracFone Gets Reprieve on Maine Prepaid Fee but Not Service Tax

TracFone Wireless Inc. is off the hook for $1.2 million in fees charged for prepaid wireless services in Maine but must pay the state $439,000 in back service provider taxes, the state high court ruled.

TracFone, a Verizon subsidiary, provides low-income consumers with subsidized cellphone service under the Federal Communication Commission’s Lifeline program, administered by the Universal Service Administration Company. A state audit found the TracFone hadn’t paid service provider fees or prepaid wireless services for its 17,000 Lifeline subscribers in Maine.

The Maine Supreme Judicial Court ruled Thursday that TracFone’s service, called SafeLink, is “sold” and therefore subject to ...