VOICE SERVICES TAX REQUIREMENTS

Transcription

1 VOICE SERVICES TAX REQUIREMENTS FCC Requirements and Author: John Chowdhury Creation Date: June 20, 2015 Last Updated: January 25, 2017 Control Number: 001 Version: 2 Approvals: John Chowdhury Brenda Cordova Andrew Gonzales Copy Number

2 Document Control Change Record Date Author Version Change Reference June 20, 2015 John Chowdhury 1 No previous document January 24, John Chowdhury 2 Updated with FCC Database 2017 Reviewers Name John Chowdhury Position Director Distribution Copy No. Name Location 1 Library Master Project Library 2 Project Manager 3 4 Document Control ii

3 Contents Document Control... ii Introduction... 4 New Mexico: Common taxes, surcharges and fees details... 5 Charges Definition based on FCC... 7 Common taxes, surcharges and fees details Proposed First Quarter 2017 USF Contribution Factor is 16.7 Percent Reporting Requirements to be updated Document Control iii

4 Introduction This document describes the charges approved by FCC for Monthly Wirelss, Wirline telephone bills. What is Document Source? FCC's Truth-in-Billing rules require service providers to: Provide clear, factual, plain language descriptions of services for which you are being billed. Identify the service provider associated with each charge. Specify which charges could result in disconnection of basic local service if they are not paid on time, and which ones would not. Display on each bill one or more toll-free numbers that you can call to ask about or dispute any charge. New Mexico Image of a Bill: Example 4 Introduction

5 New Mexico: Common taxes, surcharges and fees details Source: Federal Excise Tax 3% The Federal (U. S. Government) Excise Tax is a tax imposed directly on the customer by the Federal Government for certain communications services. Congress determines the tax rate and the services to which it applies. The Federal Excise Tax is intended to tax services that allow the customer the ability to communicate with virtually all subscribers of the telecommunications network. State 5.125% City & County Taxes (percentage depends on where you live in NM) The "sales" taxes in New Mexico are technically Gross Receipts Taxes imposed on the retailer's gross revenues and are passed on as allowed by state law. These taxes exist at the state County and city level and all are administered by the state and required to follow state rules. The rates for county and city sales taxes vary. The only relevant distinction in what is taxable is that the state taxes interstate toll (at a reduced rate) while cities and counties cannot tax interstate product/services. Federal Access Charge $6.50 The Customer Access Line Charge is a charge proposed and authorized by the Federal Communications Commission. Access charges are fees charged subscribers or other telephone companies by a local telephone company for the use of its local network. The FCC allows local telephone companies to bill customers for a portion of the costs of providing access. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less or not at all. Access charges for second or additional lines at the same residence are higher than the charges for the primary line. These charges can be described on your telephone bill as Federal Access Charge, Customer or Subscriber Line Charge, Interstate Access Charge, etc. Federal Universal Service Fund 17.9%: New Mexico: Common taxes, surcharges 5 and fees details

6 The Federal Universal Service Fund (FUSF) supports the telecommunications needs of consumers living in high-cost areas, low-income households, schools, libraries, and rural healthcare providers. Each telecommunication company may implement the Federal USF differently. The Universal Service Fund (USF) provides support to promote access to telecommunications services at reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries. All telephone companies that provide voice service between states and internationally, including wireless and interconnected Voice over Internet Protocol (VoIP) providers, must contribute a percentage of their revenues derived from these services to the USF. Some states impose similar requirements for revenues derived from intrastate services. Although not required to do so, many service providers choose to pass their contribution costs to the USF on to their customers in the form of a line item on customer bills, often called the Federal Universal Service Fee or Universal Connectivity Fee. The charges on bills may not exceed the provider s actual cost of contributing to the USF. Federal Charge Service Provider Number Portability The Local Number Portability Charge, which became effective February 10, 1999, is designed to help cover the costs of facilities upgrades necessary to allow customers to retain their telephone number(s), at the same location, when they change from one local service provider to another. The Telecommunications Act of 1996 requires that each local exchange carrier provide number portability in accordance with the requirements prescribed by the Federal Communications Commission. This fee has or will be removed; this is not a permanent charge on your bill. Telecommunications Relay Service Surcharge.33%: This surcharge funds a statewide program to provide telecommunication services to residents who have communications disabilities, i.e., hearing or speech. Funds are remitted to the State Commission and used to establish and administer a statewide Telephone Dual Relay System that will permit full and simultaneous communication between communications disabled persons and persons with conventional telephone equipment. This surcharge is mandated by state legislatures to make telephone service as accessible to communications disabled persons as it is for persons without such disabilities. Since it is governed by the state legislature it applies to all customers physically located in the state. State 911 or Emergency Network Surcharge $0.51 per access line Telecommunication carriers collects 911 surcharges each month for states, counties and/or cities that use this money to fund their emergency services communications systems (E911 or 911). The surcharge is imposed upon each access line within a jurisdiction's 911-service area. New Mexico imposes two 911 charges: one is called the Emergency Services Surcharge and the other is called the Network and Database Surcharge. These are combined on the customer bill. New Mexico Universal Service Charge 3.3% This charge recovers the amount the telecommunication carrier contributes to the New Mexico Universal Service Fund. This fund helps keep basic exchange rate affordable. Many service providers choose to pass their contribution costs to the NMUSF on to their customers in the form of a line item on customer bills, often called the New Mexico Universal Service Fee. The charges on bills may not exceed the provider s actual cost of contributing to the NMUSF New Mexico Access Charge $1.59 per access line This charge allowed by the NMPRC, covers part of the cost for providing access to and maintenance of the local network. New Mexico: Common taxes, surcharges 6 and fees details

7 Charges Definition based on FCC Access charges Local telephone companies are allowed to bill customers for a portion of the costs of providing access to its local network. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less than that, or even nothing at all. Access charges for second or additional lines at the same residence are higher than the charges for the primary line. These charges can be described on your telephone bill as "Federal Access Charge," "Customer or Subscriber Line Charge," "Interstate Access Charge," etc. State public service commissions regulate access charges for intrastate (within a state) calls. In some states, a state subscriber line charge may appear on customer bills. Federal excise tax This three percent tax applies only to local service billed separately from long distance service. State and local taxes Taxes imposed by state, local, and municipal governments on goods and services that may also appear as "gross receipts" taxes on your bill Universal service charges All telecommunications service providers must contribute to the federal Universal Service Fund, which allows those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries to access to telecommunications services at reasonable rates through programs and initiatives such as the Connect America Fund, Lifeline and E-rate. A "Universal Service" line item may appear on your telephone bill when your service provider chooses to recover USF contributions from you, the customer. The FCC does not require this charge to be passed on to you, but service providers are allowed to do so. These charges usually appear as a percentage of your phone bill. Companies cannot collect an amount that exceeds the percentage of their contribution to the USF. They also cannot collect any fees from someone who is a Lifeline beneficiary. 911, LNP, and TRS charges 911 To help local governments pay for emergency services such as fire and rescue. Local Number Portability For retaining your current local telephone numbers when switching from one service provider to another at the same location. Fees may vary by Charges Definition 7 based on FCC

8 company; some may not charge any fees. These fees are not taxes. Telecommunications Relay Service To help pay for relay services that transmit and translate calls for people with hearing or speech disabilities. Other charges Directory Assistance For placing 411 or (area code) directory assistance calls. Monthly Calling Plan Charge Applicable any monthly calling plan, such as unlimited long distance calling on your wireline bill or unlimited minutes on your wireless bill. Operator Assisted Calls For calls connected by an operator. Rates for these calls generally are higher than rates for unassisted calls. Features Charges Services such as call forwarding, three-way calling, call waiting, voice mail and Caller ID. These charges would appear only on your wireline telephone bill: Minimum Monthly Charge Some long distance companies charge a minimum monthly charge even if you don t make long distance calls. Single Bill Fee For combining local and long distance charges onto one bill. This fee is not mandated by the FCC and is not an FCC charge. Some companies waive the fee for customers who pay bills online or by credit card. You can avoid the charge by arranging for separate billing from your long distance telephone company. Finally, these charges would appear only on your wireless telephone bill: Airtime charges If you don t have any more voice minutes in your package, you could see airtime or per-minute charges on your wireless bill for any additional voice calls. Some providers round fractions of minutes to the next highest one, two, or three minutes. Check the terms of your service plan. Roaming charges - Wireless providers typically charge higher per-minute rates for calls made or received outside of the service area or network defined in your service plan or contract. Additional charges, such as a daily access fee, may also be applied. 911 charges - Enhanced 911 service enables wireless telephones used to dial 911 to automatically transmit the caller's location to emergency responders. Wireless service providers may choose to bill their customers for E911 service costs. Text messaging - You can be charged either a per-message fee or a flat, monthly fee for unlimited messaging. Downloading fees - For downloading more data (including apps, system upgrades, music files and ring tones) than the plan allows. Detailed billing - Fees for detailing billing information for calls, such as date, time, Charges Definition 8 based on FCC

9 duration, number called, or calling party. Charges Definition 9 based on FCC

10 Common taxes, surcharges and fees details Regulatory Recovery Fee Name Service Calculation/Basis Definition Universal Connectivity Charge (In Texas, this is the Fed. Universal Service Fee) Voice Voice This fee includes components that may be calculated based on access lines, subscribers, or percentage of applicable charges. The amount may vary each month. This fee is calculated by applying the rate supplied by the Federal Communications Commission (FCC) on a quarterly basis to interstate and international revenues. Proposed First Quarter 2017 USF Contribution Factor is 16.7 Percent This fee helps to defray regulatory costs incurred in complying with obligations and charges imposed by state commissions or municipalities to fund state universal service programs, relay services for the visually/hearing impaired and state and local utility fees. This is not a tax or government mandated fee. This fee recovers the company's contribution to the Federal Universal Service Fund, which ensures the availability of affordable communications services to low-income and rural customers as well as eligible schools, libraries and healthcare providers. View the quarterly rate change online. This is not a tax or government-mandated fee. State and Local 911 Fees Voice This surcharge may be calculated per access line, per telephone number, per account, or as a percentage of applicable charges. The amount may vary each month. These charges are imposed by state and/or local governments to support the emergency response system for fire and rescue. The fee is generally owed to the state or local government by the subscriber and KitCarson Telecom acts as a collection and remittance agent. Federal Excise Tax Voice The rate is applied to local service billed separately from long distance service. This is a tax imposed on local telephone service by the federal government. Common taxes, surcharges 10 and fees details

11 Name Service Calculation/Basis Definition State and Local Sales Taxes Gross Receipts Taxes and State and Local Utility Taxes State and Local Communications Services Tax Voice, Video, and Internet Voice and Video Voice, Video, and Internet FCC User Fee or FCC Regulatory Fee Video Franchise Fees PEG Fees Video Video Percentage of applicable charges. Percentage of applicable charges. Percentage of applicable charges. Monthly fee based on per subscriber amount. This amount may vary by $0.01 each month in accordance with FCC rules. Percentage of applicable charges. Monthly fee or percentage of applicable charges. The rate for sales taxes varies by state and/or locality. The tax is owed to the state or local government generally by the subscriber and KitCarson Telecom acts as a collection and remittance agent. The rate for these taxes varies by state and/or locality. These taxes are levied on KitCarson Telecom and service providers are permitted to pass them on to consumers as a line item on the bill. The rate varies by state and/or locality. This tax is collected by KitCarson Telecom and it is remitted to the state. Fees collected annually by the FCC from cable operators to reimburse the FCC for administering its regulatory responsibilities under the Communications Act of FCC rules permit cable operators to recover the regulatory fees from cable subscribers in twelve monthly installments. Franchise fees are paid to local franchising authorities (municipalities) as compensation for the cable company's use of the public right-of-ways or easements. A franchising authority is the municipality that gives permission to the cable company to use a street or area along residential property, where telephone or electric poles are located. PEG stands for public, educational, and governmental. A local franchise authority may require that a cable operator provide channels for public, education, and / or government access. The LFA may require the cable operator to provide funds for equipment for local studios for these channels and operating funds to cover the Common taxes, surcharges 11 and fees details

12 Name Service Calculation/Basis Definition Franchise Related Costs or FRC Fees Video Monthly fee or percentage of applicable charges. expenses of operating the studios. Franchise Related Costs are costs associated with providing public, educational, and/or government access facilities and equipment and/or other related costs with the local franchise area. Note: This is not a comprehensive list of all taxes and fees that may be found on your bill. Common taxes, surcharges 12 and fees details

13 Reporting Requirements to be updated Federal Universal Service Fund How It Works All carriers providing interstate or international service to end users originating or terminating within the US must contribute. De minimis exception may apply. Contribution based on projected interstate or international revenues as reported by carrier. End of year true-up Remittance: The Administrator of the USF (e.g., USAC) invoices the taxpayer. Separate State USF. Reporting Requirements 13 to be updated