Telecom Tax Blog

Telecom Tax Webinars - Now Available on our Webinar Channel

 

Webinars - what a great forum for discussing telecom tax.

Lately, we've reached out to many of you in the telecom tax community through the webinars we have conducted with our partners.  It's a great two way exchange of information.  We enjoy the opportunity to present our solutions and we also appreciate the thoughtful questions we receive during the webinar. 

To share our webinars with more in the community, we've created a webinar channel where you can watch our webinars on demand.  Our two most recent webinars are available:

• Key Considerations For Building Your Telecom Tax Workflow.  This webinar is presented by Mike Sanders, SureTax's Chief Product Architect and David Rubenstein, CPA, from Wolters Kluwer. 

• Simplifying the Tax and Regulatory Obligations of Your Telecom Offering.  This webinar has more of a regulatory focus an din presented in conjunction with The Commpliance  Group.

We look forward to posting more webinars going forward.

COMPTEL Opposes USTelecom Petition on Switched Access Services

 

Yesterday, COMPTEL filed comments opposing USTelecom's petition for a declaratory ruling that incumbent local exchange carriers are non-dominant in the provision of residential and business switched access services.

With the adoption of VoIP and wireless services, incumbent local exchange carriers are asking to be relieved of their dominant carrier duties. This is significant because dominant-carriers have regulatory requirements regarding pricing, tariff filings and market entry and exit that are not applied to their competitors.

In its comments, COMPTEL noted several reasons why this petition should be denied. First, USTelecom readily admits that ILECs continue to have market power and remain dominant in the switched access market.

"As a result, the existence of the ILECs' market power and dominance is neither uncertain nor a matter of controversy. For this reason alone the Commission should deny USTelecom's Petition," COMPTEL stated. COMPTEL also noted that the future of end user switched access regulation is the subject of a Further Notice of Proposed Rulemaking in the Intercarrier Compensation/USF proceeding, and should be addressed there, rather than in a declaratory ruling proceeding. Finally, in an attempt to demonstrate the competitiveness of the market, USTelecom only submitted information about the retail market for voice services. Carrier's carrier switched access service is not a retail service, however, and IXCs do not have competitive alternatives to the switched access service provided by the ILECs that serve their customers, making allegations about the competitiveness of the retail voice market irrelevant to any determination of the ILECs' continued dominance in the switched access market.  
 
To see COMPTEL's full comments, visit the COMPTEL website.

Telecom Growth: Rethinking The Phone Call

 

Everyone was impressed as Siri changed the way we thought about "talking" on the phone. But, what if talking on the phone was taken to its full potential?

Ericsson recently uncovered its new communication technology, the IMS Innovation Platform, a "Web Real Time Communications" or WebRTC interface that is designed to reshape the consumer-enterprise habitat. This new platform is expected to make a high impact on communication services where new communication paradigms can be derived and better mobile service can be expected. WebRTC will enable developers to produce exceptionally creative applications that are not limited by their respective technology platforms.

"Developers will take the concept of the existing phone call, see it as a digital stream and innovate accordingly. Reading, transcribing, contextualizing, translating, on any connected device, using people's existing phone number - all are just the beginnings of possibility," said Geoff Hollingworth, head of Business Innovation, Ericsson North America.

At SureTax, we're excited about the possibilities...and look forward to providing solutions for the tax ramifications.

Unified Communications Revenue Tops $2 Billion

 

Unified Communications services is a hot segment of the telecom market.

New data from Synergy Research Group shows that annual service provider revenues from cloud UC services have now topped $2 billion. While today 75% of the cloud UC services market is for individual services – web conferencing, videoconferencing and contact center – the smaller UCaaS business suite market segment is growing more than twice as fast and will soon dominate.

Today the UC standalone SaaS segment is dominated by Cisco, thanks to it having a 54% share of the web conferencing SaaS market – though its market share is edging downwards. The main challengers in UC standalone SaaS include Citrix, Microsoft, Adobe and Intercall, Meanwhile leaders in the higher growth UCaaS business suite segment are mainly up-and-coming new operators – including RingCentral, 8×8, ShoreTel/M5 and West IP Communications. It is notable that traditional telcos have not led the charge in either segment, though companies like AT&T, Verizon and BT are now becoming increasingly active.

If you are thinking about getting into Unified Communications, SureTax^® Telecom can handle any communications tax calculation, including Unified Communications.  With our partners, we can help new and existing providers with regulatory, calculation and compliance solutions.

Machine 2 Machine Telecom, Telecom Tax and Bananas

 

The SureTax^® team just returned from the IT Expo East conference where is it clear that telecom continues to be a growth industry.

Among the takeaways from the conference was the enormous explosion of the M2M (machine to machine) market.   Just when you thought the telecom market could not get any more diverse, enter the banana monitoring devices.  Yes, that is right - banana monitors. 
 


Apparently bananas are one of the most profitable items in a grocery store, but with the shortest shelf life.  So, one ingenious company has developed a monitor to track the stage of ripening on the tree.  That information is transmitted to logistics where the process between harvesting, packing, shipping and stocking is timed precisely to maximize the amount of shelf life the bananas have in the store. 
 


This was just one of many examples of telephony enabled devices (in this case wireless network) that are rapidly entering our day to day activities.  Rest assured that as these new telecom markets grow, governments will be right behind them, ready to capture new tax revenues.
 


CCH SureTax is leading the way in research and knowledge for emerging telecom markets such as M2M.  As the universe of tax changes, we are here to help.

Telecom Tax Avoidance and "Qui Tam"

 

At SureTax®, our services support telecom tax calculation for the purpose of compliance.  The notion being that if a company does not comply with tax laws, they are subject to fines and penalties.

But, what if a company cheats - doesn’t pay taxes - and is caught by a whistleblower?  Then what happens?

There is a provision in common law call called qui tam, which is short for the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitu, meaning ‘he who sues in this matter for the king as for himself’.  It’s a principle that is still alive in US law and it means that whistleblowers can earn some or all of the collections of a case presented on behalf of the government.

Earlier this year, a whistleblower brought a qui tam case in New York under the state’s False Claims Act.  New York attorney general Eric Schneiderman intervened in that case against a national wireless provider for deliberately under-collecting and under-paying $100 million dollars in sales taxes on wireless access plans.

But, what about the federal tax?  Why not bring a qui tam case there also?

A loophole in federal law prohibits whistleblowers from bringing qui tam cases.  The IRS has a whistleblower office, where whistleblowers can go to file a complaint.  But, if the IRS decides not to take the case, it’s over and the whistleblower has no qui tam option.

In New York, the defendant must have at least $1 million in sales and must have deprived the state of at least $350,000 in revenue.

Maybe Congress needs to take a look at New York to figure out how to increase collections.  A federal qui tam law could do for tax fraud what nickel return deposits did for aluminum can recycling.

Georgia to Require Online Retailers to Collect and Remit Sales Tax

 

Vermont Votes for Cloud Tax Exemption

 

Jurisdictions face an on-going balancing act - tax and receive revenue today or defer and hope for growth and more revenue tomorrow.

In December, Vermont lawmakers, tax officials, and representatives of the business and software communities voted 4-3 on Monday to exempt businesses from a tax on cloud computing services in a set of recommendations to the Legislature.

The members of the Sales and Use Tax Study Committee who are in favor of a tax on remotely accessed software argued that the state would lose $2 million in potential tax revenue in the first year, and untold millions more in future years, as businesses expanded and scrambled to exploit a tax exemption.

Those against the tax on cloud computing said the economic benefits of an exemption would outweigh lost tax revenue, by keeping businesses, jobs, and especially software companies in the state.

So, Vermont Cloud Providers, enjoy the new tax break.  For our clients using SureTax^® Telecom for their cloud tax calculations - no worries.  The change in Vermont will be implemented automatically once passed by the Legislature.

Mainstreet Fairness Act Focuses Need for Online Tax Calculation for eCommerce

 

SureTax provides real time tax calculation solutions for eCommerce, so we were interested to find this item about the Mainstreet Fairness Act.

The Mainstreet Fairness Act may come up for a vote quickly.  The Mainstreet Fairness Act would require online retailers to collect sales tax just like brick and mortar stores do.

The Mainstreet Fairness Act may be added on to the Defense Authorization Act of 2013.  Sen. Richard Durbin (D-Illinois), filed an amendment on Friday to include the Act in the spending bill.  Voting may be as early as next week.

As states struggle to meet revenue shortfalls, Mainstreet Fairness has gained traction.

“Sen. Durbin is focused on working with his colleagues to try to get a vote on the bill before the end of this year, whether as a stand-alone bill or part of a larger piece of legislation,” said a Durbin aide. “They are keeping all options on the table at this point.”

The National Retail Federation supports the act. “As the nature of retailing evolves and Internet sales become a more prominent portion of total retail sales, it is critical that sales tax collection requirements not discriminate,” NRF Senior Vice President David French said in a letter to senators. “The current collection disparity has tilted the competitive landscape against local stores, creating a crisis for brick-and-mortar retailers around the country.”

For more about SureTax's Real Time Tax Calculation Solution for eCommerce, click here.

VoIP Tax implications as International Internet Tax Discussions Start Monday.

 

As providers of telecom tax and VoIP tax solutions, we are interested in anything that may change the commercial dynamics of the internet.

We are looking with great interest at the upcoming meeting of the International Telecommunications Union, beginning December 3 in Dubai.  Today, we take the internet and the free flow of information for granted.  But, for countries around the world, the internet has changed the balance of power and the revenue streams.

VoIP has displaced landline service around the world, leaving poorer nations to look for new streams of revenue.  The free flow of information has also displaced local media and put governments at risk.  So, this meeting should be interesting, as the governments of less developed countries look to gain more revenue and control, while more developed countries hope to maintain the internet as it is with a "if it ain't broke, don't fix it" approach.

Amongst the players, the United States is aligned with Canada, Australia, New Zealand, Mexico and others as preferring to keep the internet as it is now. As well as having support from African countries, officials say Russia has backing for some of its proposals from China.

With over half of world owning smart phones, this is perhaps the most under reported story in the world.  We watch and hope that the internet remains the engine of commerce and prosperity that is has been for the last 20 years.