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Voice taxes (United States)

The following information is a high-level overview of the various taxes that regulatory authorities mandate for commercial enterprises (US customers only). Because the taxes vary based on the type of service and the tax jurisdiction, this information cannot cover every scenario that a commercial enterprise might encounter.

Voice services have many different taxes based on the tax jurisdiction where the service is being consumed. Because taxation and regulation vary from state to state, the taxes are significant not only at the federal level, but also at the state level.

The taxes that can be assessed include the following:

  • State and Local Sales and Use Tax
  • Excise Tax
  • Gross receipts tax
  • Utility Users tax
  • E911
  • Local telecommunications taxes

Other regulatory fees that are assessed include the following:

  • Federal USF
  • Federal TRS (Telecommunications Relay Service) Fund
  • North American Numbering Plan Administration
  • Local Number Portability shared costs
  • FCC Regulatory Fees
Note:The following examples are illustrative in nature and do not constitute the exact percentages and taxes charged by each jurisdiction. The actual invoice contains all the applicable taxes charged by the specific jurisdiction where the customer’s business is located.

Use case scenarios

Scenario 1: Activation of a toll free number

Customer purchases a toll-free number. What taxes can the customer expect on an invoice for purchasing and activating this number? The following examples list various taxes for three different locations. The revenue amount is $1.Location: Dallas, TX

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 6.25 0 100 0.06
State State Cost Recovery Fee 1.00 0 0 100 0
City City Sales Tax 1.00 1.00 0 100 0.01
District Dallas MTA 1.00 1.00 0 100 0.01
Total tax   0.09

Location: New York, NY

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 4.00 0 100 0.04
State NY State Excise Tax 1.00 2.5 0 100 0.03
City County Sales Tax 1.00 4.5 0 100 0.05
District Metro Commuter Trans. District 1.00 o.375 0 100 0.00
District NY MTA Surcharge on Excise Tax 1.00 0.595 0 100 0.01
Total tax   0.14

Location: San Francisco, CA

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State CA Telecom Relay Systems Surcharge 1.00 .50 0 100 0.01
State CA Teleconnect Fund 1.00 1.08 0 100 0.01
State CA High Cost Fund(A) Surcharge 1.00 0.35 0 100 0.00
State CA Universal Lifeline Surcharge 1.00 4.75 0 100 0.05
Total tax   0.08

Scenario 2: Monthly recurring charges for a toll-free number

Customer purchases a toll-free number. What taxes can the customer expect on an invoice for monthly recurring charges for this number? The following examples list various taxes for three different locations. The revenue amount is $1.Location: Dallas, TX

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Fee Toll Free Number 1.00 0 0.01 100 0.01
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 6.25 0 100 0.06
State State Cost Recovery Fee 1.00 0 0 100 0
City City Sales Tax 1.00 1.00 0 100 0.01
District Dallas MTA 1.00 1.00 0 100 0.01
Total tax   0.10

Location: New York, NY

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Fee Toll Free Number 1.00 0 0.01 100 0.01
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 4.00 0 100 0.04
State NY State Excise Tax 1.00 2.5 0 100 0.03
City County Sales Tax 1.00 4.5 0 100 0.05
District Metro Commuter Trans. District 1.00 o.375 0 100 0.00
District NY MTA Surcharge on Excise Tax 1.00 0.595 0 100 0.01
Total tax   0.15

Location: San Francisco, CA

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Fee Toll Free Number 1.00 0 0.01 100 0.01
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State CA Emer Tel. Users Surcharge 1.00 0.75 0 100 0.01
State CA Telecom Relay Systems Surcharge 1.00 0.50 0 100 0.01
State CA Teleconnect Fund 1.00 1.08 0 100 0.01
State CA High Cost Fund(A) Surcharge 1.00 0.35 0 100 0.00
State CA Universal Lifeline Surcharge 1.00 4.75 0 100 0.05
Total tax   0.10

Scenario 3: Activation of a DID number

Customer purchases a DID number. What taxes can the customer expect on an invoice for purchasing and activating this number? The following examples list various taxes for three different locations. The revenue amount is $1.Location: Dallas, TX

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Universal Service Fee 1.00 17.4 0 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 6.25 0 100 0.07
State State Cost Recovery Fee 1.00 0 0 100 0
City City Sales Tax 1.00 1.00 0 100 0.01
District Dallas MTA 1.00 1.00 0 100 0.01
Total tax   0.21

Location: New York, NY

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Universal Service Fund 1.00 17.4 0.01 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 4.00 0 100 0.05
State NY State Excise Tax 1.00 2.5 0 100 0.03
City County Sales Tax 1.00 4.5 0 100 0.06
City Local Gross Receipts Tax 1.00 2.35 0 100 0.02
District Metro Commuter Trans. District 1.00 o.375 0 100 0.00
District NY MTA Surcharge on Excise Tax 1.00 0.595 0 100 0.01
Total tax   0.29

Location: San Francisco, CA

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Universal Service Fund 1.00 17.4 0 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State CA Telecom Relay Systems Surcharge 1.00 0.50 0 35.1 0
State CA Teleconnect Fund 1.00 1.08 0 35.1 0
State CA High Cost Fund(A) Surcharge 1.00 0.35 0 35.1 0
State CA Universal Lifeline Surcharge 1.00 4.75 0 35.1 0.02
Total tax   0.14

Scenario 4: Monthly recurring charges for a DID number

Customer purchases a DID number. What taxes can the customer expect on an invoice for monthly recurring charges for this number? The following examples list various taxes for three different locations. The revenue amount is $1.Location: Dallas, TX

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Universal Service Fee 1.00 17.4 0 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 6.25 0 100 0.17
State 9-1-1 Equalization Fee 1.00 0 0.06 100 0.06
State State Cost Recovery Fee 1.00 0 0 100 0
City City Sales Tax 1.00 1.00 0 100 0.03
City Municipal Right of Way Fee 1.00 0 1.64 100 1.64
City Dallas 9-1-1 Fee 1.00 0 0.62 100 0.62
District Dallas MTA 1.00 1.00 0 100 0.03
Total tax   2.67
Note:The total tax amount is comparatively high for commercial enterprises in Texas due to the fees.
Location: New York, NY
Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal Federal Universal Service Fund 1.00 17.4 0.01 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State State Sales Tax 1.00 4.00 0 100 0.05
State NY State Excise Tax 1.00 2.5 0 100 0.03
City County Sales Tax 1.00 4.5 0 100 0.06
City Local Gross Receipts Tax 1.00 2.35 0 100 0.02
City NYC E-911 Surcharge 1.00 0 1.00 100 1.00
District Metro Commuter Trans. District 1.00 o.375 0 100 0
District NY MTA Surcharge on Excise Tax 1.00 0.595 0 100 0.01
Total tax   1.29

Location: San Francisco, CA

Tax authority Tax description Revenue ($) Tax rate (%) Fee rate ($) Percent taxable (%) Tax amount ($)
Federal FCC Universal Service Fund 1.00 17.4 0 64.9 0.11
Federal Federal Cost Recovery Charge 1.00 1.862 0 64.9 0.01
State CA Emer Tel. Users Surcharge 1.00 0.75 0 35.1 0
State CA Telecom Relay Systems Surcharge 1.00 0.50 0 35.1 0
State CA Teleconnect Fund 1.00 1.08 0 35.1 0
State CA High Cost Fund(A) Surcharge 1.00 0.35 0 35.1 0
State CA Universal Lifeline Surcharge 1.00 4.75 0 35.1 0.02
County San Francisco Access Line Tax 1.00 0 3.27 100 3.27
Total tax   3.41

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This page was last modified on April 27, 2018, at 09:15.