Taxes

[eatld]

I know that you layed out the UFS tax of 8.6% and the E911 fee of $1.00

But do I need to charge State and Federal Taxes each month to my customers and also

Is there any other kind of taxes, fees, and surcharges that i am required to charge each of my customers.

The phone companies vary but most of them charge 9 or more different taxes, fees etc.

I know we are separated from them and is a little different but i need to know this so I can edit my POS Registers & Billing Statement Software Accordignly as needed.

Thanks,

[eatld]

Along with preparing my CPA for whatever that we are required to do.

Thanks

[timwidmer]

Yeah, that is a good question. My take is it is covered under voipo? I could be wrong.

[GreenLantern]

very good question... did we get an answer on this yet?

[VOIPoTim]

We can't really offer any accounting or legal advice.

We're selling all the components as a wholesale provider (phone numbers, minutes, E911 service, etc) and each reseller will package them together in different ways. Since there are a lot of different possibilities, all situations are different and everyone is in a different location, etc.

[mmtech]

Wow... that's not what I got told before I signed up...

[11:44 PM] julio has joined the room
[11:44 PM] Cody C has joined the room
[11:44 PM] Cody C: Thank you for choosing VOIPo. How can I assist you today?
[11:44 PM] julio: question about taxes for resellers
[11:44 PM] Cody C: Sure
[11:45 PM] julio: do i need to charge my customers any taxes? only two mentioned on your site collected are
USF and e911
[11:46 PM] Cody C: Those are the only taxes you will need to charge them for. Let me pull the exact taxes
[11:48 PM] Cody C: Basically VOIPo charges you for the E911 and USF. E911 is charged to you at $1 per number. The USF is charged at a 9.9% recovery fee and is subject to change so there's not exact on the USF
[11:49 PM] julio: okay. i just wanted to make sure http://tax.utah.gov/forms/pubs/pub-25.pdf e911 in utah is just under a dollar. so that makes sense. it also says in state telecom is subject to sales tax, so is that what the usf is for? and any other federal stuff you are required to pay?
[11:55 PM] Cody C: That is what the USF contribution is for. These charges will be charged to you as the USF.
[11:55 PM] julio: okay, cool. Thank you so much!
[11:55 PM] Cody C: You're welcome
[11:55 PM] Cody C: Have a great day

[usa2k]

Looks like support should refer Reseller questions to Reseller@VOIPo.com

[VOIPoTim]

The info in that chat is not accurate. I will address that internally.

The rep appeared to be only addressing the taxes we collect from you as a wholesale provider. Since all resellers have unique situations, are in different locations, and will sell different services (residential, wholesale, toll-free, etc), we can't provide any financial, legal, or taxation advice.

All reseller questions must be directed to reseller@voipo.com because our regular support team (chat/phone) has absolutely no info about the reseller program.

[mmtech]

Is reseller support available after hours and weekends?

All my presale reseller questions were directed to the chat. I'm afraid I got a lot of bad information, especially as I continue to read the forums...

Can any other resellers comment on what they do? Collect local sales tax, pay county 911 fees?

Accountant will talk to me for cheap, it's the lawyer that gets you!


Let me ask voipo a question then. Do you pay local sales tax if I were to sign up in Utah, to utah? And their local county 911 taxes in addition to the e911?

[mmtech]

http://www.broadbandreports.com/forum/r24345460-VOIPo-to-Offer-a-Reseller-Program

The last post there:


Anyone hot and bothered about becoming a reseller ought to seriously consider the implications of the statement above. You will have to bill and tax and collect from customers directly. You'll have to contract with a billing company, and pay royalties to the tax calculation firm, and pay Timo's bill when due irrespective of collections from your customer base. You'll also have to register with FCC and your state's public utility commission, so don't forget about legal expenses and the ongoing reporting and filing obligations and fees (the FCC requires you to have a law firm with an office in Washington DC, so a local bookkeeper won't be sufficient). Certainly not everyone follows the rules, but if you become of significant size you'll have to, and then account for the time prior to your registration. Be careful out there.

As a reseller we have to register with the FCC? I know you want to refer me back to legal on that one Tim, but can some of the other resellers comment on this? Have you registered with the FCC for your VOIP services?

[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/taxinfo/audit/telecommunications/ch5.htm#SALES_TAX_ASSESSMENT_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/opendocs/open27/200205077l.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.

[Inmemori]

In short, every state has different rules, regulations, and taxes.
The FCC also has rules you will want to look at.
But since VOIP is still a pretty much new technology, laws have not yet caught up everywhere.
So check your state utility commission...

[Inmemori]

From what I understand (not legal advice) the FCC does not require resellers to register. It is the termination service that is required to register... VoIPo.
As far as taxes, your state's public utility commission is the determing body for that.

I'm just thankful that "Timo's" team is so responsive.... when I post questions/issue in the correct place! LOL

The last termination company I was with would take nearly a week to respond. I was unable to keep any customers!

In case you don't hear it enough, THANKS to Team VoIPo! or should I say Team Timo!