Billing Question ??

[roehrle]

I have been a customer for a couple years now and I just paid my third year bill.$149 + $36 tax. It seems to me that 24% taxes is more than I pay the Govt. Is there something wrong with this . Seems high to me.

[VOIPoTim]

I agree it's a lot, but I'm not a politician so I can't do much about it unfortunately.

Believe it or not, we're actually losing a pretty substantial amount of money on the "flat rate" $3 fee. That's why pretty much all the mainstream VoIP providers now charge way more than $3.

There's lots of quasi-government "funds" we have to pay into....USF Fund, LNP Fund, NANPA fund, etc. The USF alone is a huge hit since we have to pay 15.5% of the gross interstate revenue into it alone.

Another big one is E911. In addition to various taxes for it, we have to pay an E911 service provider a monthly recurring cost for each active number to provide the E911 service.

Many of these costs keep going up (such as the USF) and in most cases we are losing money depending on the customer location. Due to the recession, all kinds of government agencies are finding ways to get more $ and more and more fees keep cropping up.

We've had the $3 "flat fee" for a few years now, but it's something we're going to be forced to in the near future, so $3 is probably a bargain compared to what it will be in the future if the government continues on the path its on to make sure that all the landline taxes/fees end up applying to VoIP as well.

If we do end up changing it, anyone that's paid up would not be affected. We wouldn't retroactively bill it on prepaids and the new rate would only apply to future invoices.

Just as an example, one little county in WV wants $3.34 a month as a "911 tax" for all customers that live there. This does not pay for the 911 service the provider offers, it's just a tax to pay for the expenses of the local 911 center. So providers end up paying that plus the cost of a 911 service, various other federal, state, county, and local taxes, 15.5% of gross interstate revenue into USF, etc.

http://www.dslreports.com/shownews/West-Virginia-County-Wants-Magic-Jack-To-Collect-911-Fees-112279

Right now most county and local taxes don't apply to VoIP and only apply to traditional phone service. If some of the cities and counties have their way with it and include VoIP as this WV county is trying to do, many VoIP providers will soon be collecting more in taxes than they actually charge for service.

[Russell]

I have been a customer for a couple years now and I just paid my third year bill.$149 + $36 tax. It seems to me that 24% taxes is more than I pay the Govt. Is there something wrong with this . Seems high to me.

I believe looking at it as a percentage is not appropriate in this case since some of the fees are not percentage based. Lets say your county charges a $2 E911 fee. If VOIPo sells you service for $2 a month, your "taxes" are at 100%. So would it make you feel better to be charged $20 a month so your taxes are only 10%? If, philosophically, $3 appears to be a large amount for taxes and fees, compare it with the competition - I believe you'll be pleasantly surprised by how reasonable it is. The bottom line is you as a consumer compare what you get with what the competition offers and choose what works best for you. What I like about VOIPo far outweighs my dislikes - which may explain why I hope to be around a long time.

[voipinit]

POTS was allowed to have taxation without representation attached to it, so that was seen as a legal way to charge any fee or tax that officials want. Believe it or not, with the taxes/fees on telephone anything goes. If they wanted to add a health care tax/fee, or anything else, it just takes a swipe of the pen. It is only limited by imagination so don't be surprised when the tax on phone service is 100% + of the service itself. VOIP was left alone for awhile, but there is no way they were going to give that up forever. Mobile carriers will more than likely be the next target.

[B2ntx]

VoIPinit - you are so right.

<< If they wanted to add a health care tax/fee, or anything else, it just takes a swipe of the pen.>>

Actually, there already is a rural health care component of the Universal Service Fund! Check out "Rural Health Care Program" at the USAC.org website.

<<VOIP was left alone for awhile, but there is no way they were going to give that up forever. Mobile carriers will more than likely be the next target.>>

The wireless industry (mostly owned by telco holding companies) is actually putting up an excellent fight and has achieved some serious progress; it is the interconnected VoIP industry that is flirting with disaster by failing to defend against taxes and assessments. If they'd get their act together, they'd make sure taxes and assessments are levied strictly on physical layer services (like broadband access services) and keep the services and applications that ride over the top free of those encumbrances.

The big telcos don't have a century plus of wins under their collective belt because they are big, they win because they are diligent.

[burris]

Mobile carriers will more than likely be the next target.

My current Sprint bill is $42.97 and that includes $10.47 for taxes and fees and Sprint surcharges.

How much more of a target do they need to be?

[holmes4]

My local POTS bill has $10 or so in taxes out of a $26 bill, and the "fees" keep going up.