Explanation of Taxes, Surcharges, and Related Fees
S-Net and all other Interconnected VOIP providers are obligated to collect taxes and governmental surcharges on behalf of local, state, and federal governments.
As most S-Net subscribers know, the US telecommunications industry is among the most regulated and taxed in the world. The VOIP industry, which is still relatively new, is also coming under increased scrutiny and regulation by taxing and regulatory authorities. While we at S-Net have no say in the amount of taxes and surcharges assessed, we strive to ensure that you don’t pay any more than is absolutely required by government entities for us to collect.
Because there are over 40,000 taxing authorities, each with constantly changing regulations and rates, S-Net contracts with an industry-leading telecom tax rating agency, CCH SureTax, to monitor each month’s billing for accuracy and compliance in the taxes, surcharges, and fees assessed.
Taxes and/or governmental surcharges can be assessed on the following, as applicable, and are subject to change.
- Monthly service charges for hosted phone licenses, telecommunication lines, VOIP vertical applications, fax lines, toll free and DID numbers, local, long distance, and international charges, etc.
- Equipment and related shipping charges.
- And, in some cases, taxes are assessed on pass-throughs to customers from providers associated with regulatory fees.
Note: The terms used in the next sections to describe the various taxes and surcharges are derived from the official descriptions as they appear in the CCH SureTax database and closely match the descriptions as they appear on your bill.
Federal Universal Service Fund
The Telecommunications Act of 1996 requires that S-Net contribute to the Federal Universal Service Fund (“FUSF”). The FUSF helps to make phone service affordable and available to all Americans, including consumers with low incomes; those living in areas where the cost of providing telephone service is high; public schools and libraries; and rural health care providers. The FCC delegates the administration of the FUSF to the Universal Service Administrative Company (USAC). Each quarter, USAC announces, and the FCC approves, a “contribution factor.” The contribution factor is a percentage of the total interstate/international revenue for which each interstate carrier is responsible for contributing to the FUSF in order to sustain the FUSF System. As permitted by FCC regulations, S-Net has opted to bill FUSF as a separate line item. Consistent with such regulations, the Company only bills FUSF line item charges in an amount equal to the quarterly contribution factor currently in effect. This is a permissible pass-through fee but is not a tax or charge mandated by the government.
Please visit Universal Service – Universal Service Administrative Company (usac.org) for more information on the FCC’s Universal Service Fund.
This fee is subject to tax and may be increased or decreased quarterly, depending on the needs of the Universal Service | Federal Communications Commission (fcc.gov).
Some VOIP providers elect not to itemize this fee on customer invoices and attempt to recover it through increased rates charged for telecom services. Other providers, such as S-Net, itemize this separately to better inform our subscribers of the impact that taxes and governmental surcharges have on their phone bills.
|Federal Universal Service Fund||29.2%|
Federal and Regulatory Cost Recovery Fee and Surcharge
This is a percentage of charges, excluding taxes, appearing on a Customer’s invoice and will apply to all services including those subject to direct regulation by the FCC. This charge is being imposed to recover amounts incurred by S-Net for fees, contributions, and/or charges associated with telecommunications services for the sight and hearing impaired; local number portability and North American Numbering Plan administration; administrative costs, fees and expenditures related to compliance with Federal, state, and municipal regulatory programs; and annual FCC regulatory fees. This is a permissible pass-through fee but is not a tax or charge mandated by the government. For more information on the various programs supported by this fee, please see below.
Federal Telecommunications Relay Services (TRS) Fund
The Telecommunications Relay Services (“TRS”) Fund was established by the FCC in 1993 to reimburse TRS providers for the cost of providing interstate TRS services. TRS services are telephone transmission services that provide hearing or speech challenged individuals with the ability to use a traditional telephone.
Under the FCC’s rules, S-Net must contribute a percentage of its interstate and international end-user telecommunications revenues to the TRS Fund. S-Net may collect these fees from customers. The contribution percentage varies annually.
Local Number Portability Administration (LNPA)
Local Number Portability (LNP) is a customer’s ability to keep existing phone numbers when switching to another service provider. S-Net must provide LNP, as well as contribute to the Commission’s LNPA program, designed to diffuse the costs of administering LNP. S-Net pays a proportionate share of the LNP costs in each region in which it operates and has customers. S-Net collects a fee from customers to offset its LNP costs. This fee varies frequently by region.
North American Numbering Program Administration (NANPA)
The North American Numbering Plan (“NANP”) is an integrated telephone numbering plan for the Public Switched Telephone Network (“PSTN”) serving multiple countries including the United States and its territories. It is administered by the North American Numbering Plan Administration (“NANPA”).
Under the Commission’s rules, S-Net must contribute to the costs of numbering administration. Contributions are based on a percentage
of S-Net’s revenues from customers using international, intrastate and interstate services. The percentage varies annually.
Annual Regulatory Fee
S-Net must pay an annual regulatory fee to the Commission. This fee varies annually. S Net collects this fee from customers.
State and Local e911/911 Fees
Some states and localities require S-Net to collect a fee to help support state and local Enhanced 911 (e-911) Funds. These funds support state and local 911 service and vary by state and locality.
The FCC requires that S-Net provide Emergency 911 services and allows us to charge a recurring monthly fee that is used to provide this service.
This fee is separate from the taxes and fees charged by municipalities to maintain their 911 infrastructure.
Individual State Taxes and Surcharges
The following is a partial list of taxes and governmental surcharges listed by state. Taxes, fees, and surcharges are subject to change and rates may differ by municipality. Consult your bill for the charges applicable to your service and the most current rates. Click on the link of your state for more information.
|llinois||Illinois State Taxes and Surcharges|
|California||California State Taxes and Surcharges|