Here are a few common and interesting items to consider when looking at your company’s funding obligations:
Q. My tax provider handles all of these things. Do I really need to worry about these surcharges and fees?
A. Yes. Although your tax provider may be handling your remittances, your IT and billing departments need this information. They need to be advised well in advance to update your billing system to correctly bill your end-users.
Q. I’m a VoIP provider. These fees and surcharges are only applicable to wire line service providers. Right?
A. No. Almost half of all of the USF, 911, TRS and similar fees apply to Voice Over Internet Protocol service providers. Although most of the VoIP provider obligations are for 911 funding , there are jurisdictions that require VoIP providers (and/or their subscribers) to help with the burdens of funding universal service and telecommunications relay services.
For example, there are at least six states that require a VoIP provider to pass through the relay surcharge/fee to their subscribers: California, Delaware, Indiana, Maryland, Missouri, Montana, and Nebraska. Three jurisdictions (Illinois, Ohio and the FCC) also have a relay fee, but do not require a VoIP service provider to pass through the funding obligation to their subscribers.
Q. Do I need to have specific information in my tariffs about these fees and surcharges? Doesn’t my general fees and taxes liability language cover it?
A. No. In several cases, the state commission requires specific language be included in your tariff explaining the fee/surcharge/assessment, and in some cases, the specific amount must be included in the tariff.
Q. Am I allowed to keep part of the monies I collect to cover my administrative costs?
A. Yes. Many of the state funds will allow a carrier to retain a small amount to recover administrative costs. However, several funds specifically prohibit a carrier from retaining any administrative fees and require remittance of the entire amount collected.
For example, carriers collecting the new Alabama Statewide 911 Charge are allowed to retain an amount equal to 1% from the statewide 911 charges received. Louisiana allows collecting carriers to retain up to 2% of the collected amount for the Telecommunications Tax for the Deaf. However, such an administrative fee may only be collected if your remittance is timely.
Q. How often do these surcharge/fee/assessment amounts change?
A. The amounts change frequently. Some amounts change based on a calendar year, others based on differing fiscal years. Occasionally, a fund audit will result in a mid-year adjustments..or two. On average, for a nationwide carrier, there are at least eight (8) rate changes a month with the majority of changes occurring in December.
Learn about The Telecommunications Funds Matrix from TMI.