Telecom Taxes, Fees, and Surcharges Basic Questions Is the tax, fee, or surcharge the correct percentage?
Is the service exempt from certain types of taxes, fees or surcharges?
Is the service subject to Federal or State Universal Service Fund?
A Tax, Fee, & Surcharge Audit involves the application of :
State and Federal Regulations
State and Federal Tariffs
Federal, State and Local Tax Laws & Rulings
The Carrier Service Guide
The Location, Type of Service, and End Use of Service
Taxes, Fees and Surcharges are the most under looked billing item, some reasons why are listed below:
The bill paid off the summary page.
The taxes, fees and surcharges listed as a dollar amount without any tie into to the service.
The review can require looking at thousands of columns of data or pages of bills.
Confidence in the billing system the taxes, fees, & surcharges have been applied correctly, with no mark up.
An examination requires a network map, accurate descriptions of end use on a both A and Z connections.
Taxes and fees on communication services vary considerably by type of service and choice of electronic device used to receive the service
Telecommunications services are in 10,857 taxing jurisdictions
Taxes and fees vary by type of service and choice of electronic device used to receive the service
Taxes, fees, and surcharges are rarely understood by the Carriers customer service staff
The “telecom tax expertise” in the market place addresses the risk of the Carrier, which is under collection by the Carrier.
Taxes, Fees, and Surcharges vary greatly from jurisdiction to jurisdiction, the variations make little sense and often are the legacy of tax and regulatory decisions made before the advent of modern communication technologies.
TEM software cannot validate a tax rate without imputing the “correct” rate:
Taxes, Fees, and Surcharges are not contracted rates, telecom contracts and service agreements allow for a pass through or collection of these items.
There thousands of jurisdictions and rulings on which rates apply to what services.
Most companies believe they have had a tax audit:
What they received is a FET or Communications Excise Tax recovery.
An end use tax and surcharge audit is extremely detailed, research process, whereas the FET recovery involves application of an IRS formula or collecting the long distance excise tax charge that is normally listed on each invoice.
Federal, State and Local taxing authorities and the multiple surcharges that a carrier will collect or pass through will increase your telecom costs by a double-digit percent.
Consider a Telecom Tax, Fee, & Surcharge Analysis to complement or complete a TEM solution. Even if you have had a telecom audit or use a TEM solution.
The analysis will address the improper application of Telecom Taxes, Fees and Surcharges on your voice and data services.