Telecom Tax Blog

    The Five Best and Five Worst States for Starting a Telecom Solutions Provider Business

    Posted on Mon, Sep 16, 2013 @ 01:00 PM

    Are you thinking of becoming a solutions provider?  If so, what are the Five Best States for starting a technology business?  What are the Five Worst?

    CRN published an interesting article that looked at a broad range of criteria.  Here are the lists and brief explanations.  But, no matter where you start your business, SureTax can deliver your telecom tax solution, including VAT calculations for over 200 countries.

    Top Five

    #1 Utah.  Tech savvy and very pro-business.
    #2 Virginia.  Low taxes, limited regulations, sizable pool of educated workers and a virtually recession-proof economy.
    #3. Colorado
    #4. Washington
    #5. Maryland

    Bottom Five

    #50.  West Virginia.  Limited pool of IT educated workers and very limited business opportunities.
    #49.  Hawaii.  High labor costs and business expenses, taxes and regulatory environment, and business opportunity.
    #48. Wyoming
    #47. Arkansas
    #46. Mississippi

    Tags: telecom tax, voip tax, telecom taxes, telecommunications taxes, voip taxes, VAT tax, cloud computing

    Telecom Tax Avoidance and "Qui Tam"

    Posted on Wed, Jan 9, 2013 @ 11:11 AM

    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 ActNew 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.


    Tags: telecom tax, voip tax, telecom taxes, telecommunications taxes, telecommunications tax, ucaas, tax calculation, voip taxes, VAT tax

    VoIP Tax implications as International Internet Tax Discussions Start Monday.

    Posted on Fri, Nov 30, 2012 @ 08:04 PM

    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.

    Tags: telecom tax, voip tax, telecom taxes, voip taxes

    California PUC prohibited from Regulating VoIP services

    Posted on Wed, Nov 7, 2012 @ 12:35 PM

    As we scanned our VoIP tax news, we noticed this interesting article about VoIP regulation.

    California recently signed Senate Bill 1161 into law.  SB 1161, "Communications: Voice over Internet Protocol and Internet Protocol enabled communications service", prohibits the California PUC from regulating VoIP services until at least 2020.

    As we know from the VoIP tax calculation side, IP services can be complex when it comes to taxation and bundling.  VoIP, an obvious substitute for landline PSTN service, is an IP voice service.   So, is it voice and regulated like the PSTN or is it IP and not regulated by the PUC?

    In California, the answer is clear.  It's not regulated by the PUC.

    California, the leader in tech innovation, knows that government is always a step behind innovation.  This move is designed to allow VoIP to continue to grow and evolve.

    California is now the 25th state to enact a law that clarifies that VoIP services are not subject to state regulation. 

    It is worth noting, however, that nearly all states currently require providers of VoIP services to fund state and local 911 and, in addition, there are at least 22 states requiring providers of either fixed and/or nomadic VoIP services to contribute to certain state programs, such as Universal Service and Telecommunications Relay Service funds.  Indeed, several of the states with laws declaring VoIP services immune from state regulation still require VoIP service providers to Register and Contribute to state programs; California is one such state.  A common misconception is that immunity from State Regulation includes immunity from ALL state-mandated requirements.  A more appropriate way to view laws like the one adopted by California is as follows: If it's good enough for the FCC and if it's required by the FCC, then the same regulation can be adopted by the state regulator without violating the ban on regulation.


    Tags: voip tax, telecom taxes, telecommunications tax, voip taxes

    VoIP Tax Change in Wisconsin

    Posted on Tue, Oct 30, 2012 @ 01:55 PM

    Do you sell VoIP Services throughout the US?  If so, make sure you know the state by state taxability statutes.  One example of a change in policy from Wisconsin:  "Changes to the Taxability Status of Nomadic VOIP Service for Purposes of the Wisconsin Universal Service Fund".

    As a result of the same legislation that restricted the definition of the term telecommunications service to now exclude revenue derived from the sale of data and information services from WI USF assessment liability, VOIP providers are now equally required to contribute to the fund. To quote the text of the key statutory provision as a result of being amended by Senate Bill 13:

    “Contributions under this paragraph may be based only on the gross operating revenues from  the provision of broadcast services identified by the commission under subd. 2. and on intrastate telecommunications services in this state of the telecommunications providers subject to the contribution. Contributions based on revenues from interconnected voice over Internet protocol service shall be calculated as provided under s. 196.206(2)(b).”[1]

    “An entity that provides interconnected voice over Internet protocol service in this state shall make contributions to the universal service fund based on its revenues from providing intrastate interconnected voice over Internet protocol service. The revenues shall be calculated using the entity’s actual intrastate revenues, a provider-specific traffic study approved by the commission or federal communications commission, or the inverse of the interstate jurisdictional allocation established by the federal communications commission for the purpose of federal universal service assessments.”[2]

    Why spend your days managing this type of minutia?  As part of SureTax® Telecom, every rate and rule change is automatically updated and release notes are sent to you for your records.

    [1] Wisconsin Statutes § 196.218(3)(a)3m.

    [2] Wisconsin Statutes § 196.206(2).

    Tags: telecom tax, voip tax, telecom taxes, voip taxes

    VoIP Tax, VoIP Revenue and Telephone Numbers

    Posted on Tue, Oct 30, 2012 @ 12:29 PM

    At SureTax®, we're focused on telecom and VoIP tax calculation.  But, we can't help but be amazed at the transformation that the VoIP providers are bringing to the world and the affect that has on our phone numbers.

    It wasn't long ago that 96%+ of American households had a landline phone. In fact, if you didn't have a phone number, you almost couldn't get credit.  A phone number was that important.  It was part of your identity, like your name or address.  In fact, all the names and addresses and phone numbers were published in a big book that came out once a year.  (I throw that it because some kids have never seen a phone book).

    So, what's your phone number? Do you need one? How do you commercialize the connection between communication, technology and identity?

    At one time, your phone number was hard coded to your phone.  It was the physical location of your circuit and the place where your connection to the caller was made.  Now, it's just a number that represents a virtual location, much the same as a domain name reflects a DNS server address. 

    So, as VoIP replaces the Public Switch Telephone Network, what happens to our numbers?  The notion of "your phone number" is changing and causing ripple effects throughout  the economy.  It's affecting how pollsters project elections, how researchers learn about new product acceptance and how neighbors contact neighbors.

    As telecom revenues decline, could phone numbers represent a new opportunity?  After all, the technology may have changed, but our need to project an identity has not.

    Research body Ovum, part of the Datamonitor group, has revealed the results of a new study that show there is due to be a significant impact on telecommunications providers over the coming years as a direct result of the rise of VoIP.  Jeremy Green, principal telecoms strategy analyst at Ovum, said the primary threat to the market is that VoIP has the potential to reduce people's commitment to a certain telephone number.

    "Operators should use telephone numbers as the identifier and address for cloud-based services, allow customers to choose numbers that are relevant to them and develop more application-to-person SMS applications," he suggested.

    The report explained that revenue in the market is falling, but rather than voice traffic reducing it is simply switching to new platforms. Ovum said it is confident that turning people's reliance towards VoIP apps and the latest technology can ensure operators have a healthy future.

    Some providers are said to have taken a pessimistic view of the future and have opted to compete on price in a bid to eke out what they believe will be the last of significant revenues from the telecommunications market. But they have arguably made a mistake, as it is claimed by Mr. Green that many "commercial realities and opportunities" lie in the VoIP sector and are waiting to be realized.

    I wonder what Mr. Green knew about Facebook adding VoIP integration? it will be interesting to see how VoIP, voice and phone numbers re-connect to our identities.





    Tags: telecom tax, voip tax, telecom taxes, voip taxes

    Three Common Mistakes Made By VoIP Providers. Part 3 of 3.

    Posted on Mon, Oct 1, 2012 @ 05:01 PM

    Mistake #3: Not representing the proper taxes and fees on the bill.

    The VoIP world got off to a crazy start with offers flying all over the country for unlimited service for a low flat monthly fee. All the service providers were taking the stance that “hey, its internet, it isn’t taxable” so needless to say thousands of new companies were launched with little to no regard for taxation compliance.

    As always, the regulatory agencies were slow to catch up, but as they always do when tax dollars are on the table, they caught up.  Now VoIP providers all over the country are scrambling to understand the tax they should and should not collect based on the type of service they are and how it is billed and delivered.

    However,  while many are catching on that tax is something they should be collecting, the question becomes what taxes?  Along with that question is how do I represent those taxes on the bill?

    As Talk America discovered in 2006, not properly representing the taxes on the bill can be as bad as not collecting them at all.  The FTC is extremely diligent in protecting consumers from what they perceive as being false or misleading statements.

    So what do we do?  Well here is a quick reference list of some things you need to be sure you get right:

    • Understand the difference between provider based taxes, and consumer based taxes. 
    • Understand which of these taxes are pass-through taxes, which are not pass-through taxes and which are optional to be passed through to the consumer.
    • Make sure that you call a fee a fee and not a tax.
    • Make sure you call a surcharge a surcharge and not a tax. 
    • Make sure that you write out the exact nomenclature that the taxing authority expects to see.  Abbreviations or modifications to the bill can cause you problems.

    Nothing prevents a carrier or service provider from charging to recover costs or overhead, but improperly implying that those fees are somehow mandated by the government will get you in more trouble than it is worth.

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    Tags: telecom tax, voip tax, telecom taxes, voip taxes

    Smartphones for Everyone

    Posted on Mon, Sep 10, 2012 @ 09:42 AM

    As we at SureTax® focus on telecom tax and VoIP tax, we can’t help but a little distracted by the new hardware.  The new Kindles have just been released (not a smartphone, but 3G and 4G enabled) and the new iPhone 5 debuts tomorrow.

    So, how is the handset market?  Handset shipments had grown at a compounded annual growth rate of over 15% between 2009-2011.  Over 2 billion handsets will be shipped in 2015.  The primary driver of demand has been new smartphones, like the iPhone and Droid phones.  Even in the most remote corners of the planet, it’s not enough just to talk any more.

    Worldwide, global mobile penetration is 91%.  The implications of bringing mobile communications and data access to everyone on the planet are astounding.  

    Smartphones have driven that penetration, taking Western Europe and North America to OVER 100% in some markets.  Asia Pacific and Africa are still growing at over 9% per year.

    What does that mean in terms of opportunity?  As subscriber growth mirrors population growth, the opportunity is in the replacement handset market and providing services to the users on the platform.  Give some thought as to what services could be provided if everyone in the world had a smartphone.  By “if”, we mean “when” because that day is coming.

    While you do that, we’ll think about who’s going to impose the telecom taxes and how we’ll provide the tax calculation piece of the equation.










    Tags: voip tax, telecom taxes, telecommunications taxes, telecommunications tax, voip taxes

    Today's Telecom Tax Could be Tomorrow's Internet Tax

    Posted on Mon, Aug 27, 2012 @ 01:42 PM

    As followers of all things telecom tax and internet tax, we remain interested in how changes in the American telecom infrastructure become changes in our taxes, which in turn becomes changes in the types of tax that SureTax® calculates.  So, it seems logical that today's USF becomes tomorrows Universal Internet Fund.  After all, taxing communications is as American as apple pie.  But, an Internet USF Tax is not a sure thing.

    USF goes back to communications being a fundamental enabler of democracy and commerce.  From the beginning, the founders of this country envisioned a nation that was connected with communications infrastructure. The postal service connected Americans with each other (and their bill collectors!). It was subsidized using a flat fee system, so the inexpensive letters carried across town helped pay for the letters sent across the country.  The Communications Act of 1934 continued in that spirit, envisioning a system for "a rapid, efficient, nationwide, and worldwide wire and radio communication...for ALL of the people of the United States."  That notion led to the Universal Services Fund (USF).

    As telecom continues to go digital, the FCC wants to implement a new fee similar to USF, to enable broadband access to all across the country.  It makes sense that a community without broadband today would be as disadvantaged as a community without dial tone before the days of the internet.

    So, here comes the Internet USF Tax.  Seems like a done deal.  Some customers pay a little every month so that the people with difficult economics can also benefit from service.  Simple.

    No, not simple!

    In 1998, Congress passed the Internet Fairness Act, prohibiting taxation of internet access!  So, no tax.  But, wait.... is USF a tax?  The FCC says it isn't.  They say it's a fee collected by carriers.  So, if USF is simply a fee, then an Internet USF would be legal.

    Who knows what will happen?  I do know that whenever they sort this out, we'll be ready to make the calculations that keep everyone in compliance.

    You can read more here....


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    Tags: telecom tax, voip tax, i-voip tax, i-voip taxes, telecom taxes, telecommunications tax, voip taxes

    MetroPCS goes VoIP

    Posted on Fri, Aug 17, 2012 @ 03:28 PM

    As we follow telecom tax and voip tax changes, we follow the industry also.  So, it's interesting to note that MetroPCS has introduced America's first voice-over-LTE service, combining its voice, messaging and Internet services onto a single IP network.

    That seems like quite a technology advance for the carrier that traditionally is know for offering value priced services in metro areas.  Then again, VoIP began in the consumer market as a value driven offer, offering customers POTS like service at a less than POTS price.

    MetroPCS was driven to innovate by the need for more efficient use of spectrum.  Their 2G CDMA and 4G LTE service are on the same spectrum, so moving voice over to the IP network uses spectrum more efficiently.  In wireless, it's all about spectrum.

    There is a tax implication to the change.  Voice and data can be taxed differently.  A flexible tax calculation engine, like SureTax Telecom, can handle that change with ease.

    To read more about MetroPCS and their single IP service, see

    You can read more about SureTax Telecom here.


    Tags: telecom tax, voip tax, i-voip tax, telecommunications tax, voip taxes

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