Many businesses give little thought to their telecom tax provider once they’ve chosen one. As with almost every business service and expense, it’s wise to occasionally consider what you pay for the service and what your provider actually does.

Critical Questions to Ask you Telecom Tax Provider

To help asses your current provider’s offerings, here are five questions to ask to ensure your business is fully protected.

Client reviewing telecom tax audit with their provider.

1. Are You Actively Monitoring and Managing My Company’s Sales Tax Nexuses?

Where your company conducts business will likely change over time, and those changes can lead to changes in reporting and remitting obligations. Confirm that your current telecom tax provider actively monitors where your company does business and that they manage the necessary filings in each state where you have a nexus.

Specifically, full telecom tax services should include:

  • Notifying you of any changes in sales tax nexuses
  • Explaining obligations in any new sales tax nexus
  • Registering your company in every state where it has a nexus
  • Creating e-file accounts in every applicable state

Those e-file accounts also should be in your company’s name and not under a master account. Having an individual company account clarifies questions that may arise in the future.

Stack of business documents and folders symbolizing telecom tax paperwork.

2. What Am I Responsible for Sharing with a Telecom Tax Provider?

Clearly identifying the relationship between a company and its telecom tax provider is essential to smooth service. If the relationship isn’t delineated, too many details can fall through the cracks and result in costly errors.

If you aren’t sure how the relationship with your telecom tax provider is structured, ask them to clarify what your responsibilities are. You should ask whether you:

  • Have to approve every return
  • Keep your nexus and state tax obligations updated
  • Notify the provider of any calendar changes

If a provider keeps tabs on what your company is doing, you likely don’t have to share all of these details because the provider will already know. Make sure you do share the information if the provider doesn’t know, though. Of course, a provider that does keep up to date on your company’s operations will be much easier to work with since you don’t have to notify them as much.

3. How Much Do I Pay in Miscellaneous Fees?

Any miscellaneous fees should be itemized on bills, but it takes time to add these all up and you have other things to do. Your telecom tax provider should be willing to calculate the total for you.

Although each miscellaneous fee is typically small, it can add up to a substantial amount. Formatting fees, processing fees, and postage are significant, especially when they’re regularly taken out of the company budget.

Whatever you pay in miscellaneous fees has to be considered when you figure your total telecom tax service costs. In some cases, these fees can make a service that costs little upfront but isn’t inclusive of services more expensive than a service that covers miscellaneous expenses.

Close up calculator on business working desk symbolizing telecom tax fees

4. What Assistance Will You Provide If I’m Audited?

The amount of help that a telecom tax provider will give in the event of an audit can vary dramatically. Some providers will help you decide the best way of handling the audit and even which documents to share with auditors. Other providers won’t include such services, leaving you with little included support at a time when you need it most.

In addition to offering audit support, a provider should also take steps to mitigate the risk of audit in the first place. A pre-audit review that’s conducted annually can identify risk factors and potential liabilities. This will inform you about the risks that your company faces, and it may reveal a few risk areas that can be addressed.

5. Why Have Penalties Paid Have Been Increasing?

An increase in penalties is a sure sign that something’s amiss. Your telecom tax provider should explain any penalties and then determine whether your company or they are responsible for paying the associated fees.

Regardless of who’s ultimately responsible for the penalties, an increase is a major sign that you should look into other providers. Your current one either isn’t taking care of their obligations or isn’t informing your business well. You need someone else who can do telecom taxes right.

fastek logo

Work with a Telecom Tax Provider you can Trust

If you’re unhappy with your current telecom tax provider’s service or want to explore other provider options, contact the experts at FAStek. We’re specialists in telecom taxes, and we offer robust services that provide peace of mind for our clients. Have questions about what sets our services apart? We’ll be happy to explain in detail what we do, and how we’re well-positioned to help your company with all telecom tax issues.