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 an 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 and local 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 can be assessed include the following:
- Federal USF
- Regulatory Recovery Fee (including Federal TRS (Telecommunications Relay Service) Fund)
- North American Numbering Plan Administration
- Local Number Portability shared costs
- FCC Regulatory Fees
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 | |||||
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 | |||||