Taxes

[VOIPoTim]

Unfortunately we can't provide any legal or accounting advice due to liability reasons, sorry.

There are just too many variables (type of services offered, location, how stuff is structured accounting wise, etc) and if we started offering advice, we'd expose ourselves to a lot of liability if there is incorrect info based on something in someone's individual situation, etc.

There are still a lot of grey areas in VoIP taxation in general for ALL providers so it's not a simple cut and dry thing. Many states haven't decided if they consider it to be an internet service or a telecommunications service yet.

In general, I'll say that I personally would not be too worried about it until you start seeing revenue and reach a good size. In nearly all cases, there are even exemptions until you reach a certain amount of revenue. I'd focus on getting your business setup and ready to go and then meet with your accountant and advisors once you get some revenue coming in. A lot of people get wrapped up in the details like this and never get off the ground.

[rangermoore]

Excellent advice...!!

[eatld]

Knock on wood! Thanks Tim.

[timreichhart]

here is a email I got back from FCC

You are receiving this email in response to your inquiry to the FCC.

Dear Consumer,

The FCC has determined that an entirely Internet-based VoIP service was an unregulated information service. The FCC also began a broader proceeding to examine what its role should be in this new environment of increased consumer choice and what it can best do to meet its role of safeguarding the public interest.

To view the FCC order on VoIP: www.fcc.gov/cgb/consumerfacts/voip911.html


Web Site(s): www.voip911.gov VoIP & 911 Services Site www.fcc.gov/cgb/consumerfacts/voip911.html Consumer Advisory http://www.fcc.gov/cgb/consumerfacts/voip.html VoIP General Information
http://www.911voip.org/ 911 & VOIP website (non-FCC)
www.fcc.gov/cgb/broadband.html Broadband Website

Because the FCC does not regulate the rates of VoIP providers the FCC does not monitor the associated tax obligations which could vary state-by-state and provider-by-provider. VoIP is currently subject to fewer taxes and regulatory fees than standard phone service. Most states typically require consumers to pay sales tax fees but generally, you won't find state taxes on VoIP phone bills. There are exceptions, however. There also may be some regulatory recovery fees which are NOT a tax or government fee but usually a charge from the VoIP provider to defray regulatory costs such as 911 fees and universal service fees.

NOTE: Taxes as applied to VoIP services can still change at any time with further regulations as federal and state policies continue to evolve with the technology and the movement toward a more competitive telecommunications market.

[eatld]

thanks for sharing that info.

[rangermoore]

Very nice.. Thanks for sharing.. : )

[GreenLantern]

I found this info on the Texas Comptroller website.

http://www.window.state.tx.us/taxinf...SSESSMENT_BASE

Go to item #66 regarding VOIP services. Then you'll find this link with examples of what is and isn't taxable.

http://aixtcp.cpa.state.tx.us/opendo...00205077l.html

[4plus3vette]

"VoIP is currently subject to fewer taxes and regulatory fees than standard phone service."

Tell that to Vonage customers.


"There also may be some regulatory recovery fees which are NOT a tax or government fee but usually a CHARGE from the VoIP provider to defray regulatory costs such as 911 fees and universal service fees."

This is how Vonage is able to say that they don't raise their rates. They keep the "monthly charge" the same, then jack up the fees.

In three short years, the fees went from 29.4% of the monthly rate to 56.2% of the monthly rate. Almost a 100% increase in fees. Ouch.

VOIPoTIM - thank you for the service that you provide. Should you ever get to the point where you can handle faxing (the old fashioned way), I will try to move my business account over too.

[IBhere]

Wow, this tax stuff is really crazy. I've been in business for over 30 years and have never seen such a thing, outside of vending taxes.

I looked for about two weeks on every IRS/government website and didn't find anything concrete on what to charge. Then I sent whatever I found over to my accountant who has been looking into this for almost another two weeks and he said he has seen so much contradiction, he has no clue what to tell me. He is now putting calls in to certain departments to see if anyone can give him any information on what I should charge.

I will look over some of the links here, but if anyone finds a way to get started, please post it here. I think we need to charge something because if we don't and then start later, we might get people a little angry.

And I agree about Vonage over doing the tax and fees. Before I came to VOIPo, I was with Vonage for four years and at the end of year four, my taxes were over 30% of my bill.

Thank you VOIPo for giving us all the opportunity to keep expenses down!!!

The tax issue is what is keeping me at this time from launching my reseller program. Hopefully we can collectively come to some place where we can start.

[eatld]

There is a very simple way to figure out the tax area, If you know how to read in between the contradictions.