Taxes and Regulatory Fees

Overview

Unfortunately, the Telecom industry is one that is filled with regulations, red tape, and lots and lots of miscellaneous taxes and fees. We are obligated to collect these taxes and fees by law - and trust us - its not something we enjoy doing.

 

What are the taxes that are collected on my usage?

We collect Federal and State taxes on a minute-by-minute basis as required by law on telecom revenue (but not feature costs).

The most significant tax we collect is the FCC USF fee. This fee changes quarterly and is classified as a “Contribution Factor.”

Applies to Quarter

Contribution Factor

January - March 2020

21.20%

October – December 2019

25.00%

July – September 2019

24.40%

April – June 2019

18.80%

January – March 2019

20.00%

October – December 2018

20.10%

July – September 2018

17.90%

April – June 2018

18.40%

January – March 2018

19.50%

October – December 2017

18.80%

July – September 2017

17.10%

April – June 2017

17.40%

January – March 2017

16.70%

October – December 2016

17.40%

July – September 2016

17.90%

April – June 2016

17.90%

January – March 2016

18.20%

You can learn more about the FCC USF Contribution here:

https://www.usac.org/cont/tools/contribution-factors.aspx
https://www.fcc.gov/general/contribution-factor-quarterly-filings-universal-service-fund-usf-management-support

The funds collected by this tax are applied to these programs:

https://www.fcc.gov/consumers/guides/universal-service-support-mechanisms

We also collect State Taxes where required by various states and municipalities in those states where we are under nexus laws

 

What is does the "Tax Rate (Includes Regulatory Recovery Fees)" mean?

The Tax Rate summarizes all of the taxes and fees we have to collect from you into one category for easy reading. In an attempt to be as transparent as possible, we don't want you to have to do the math to find out how much you are paying in taxes.

We break down that summary as follows:

  1. FCC FUSF Charges

    1. At the time of this writing, Skyetel files its taxes under the Safe Harbor provisions. This allows for Skyetel to simply assume that 64.9% of its telecom revenue (Usage + Phone Numbers, but not feature costs) is taxable under the FCC regulations. From that, we are subject to pay the quarterly adjusted USF charges (currently 21.20%). This means that the effective tax rate on telecom services is 16.75% for Q1, 2020

    2. On services that are not classified as telecom revenue (voicemail transcription, Caller ID, Spam Filtering, etc - we break this out in our Statements), we do not collect these taxes unless required by state law.

  2. Regulatory Recovery Fees - these are fees we charge in order to be compliant with the various taxing agencies. We also use these fees to cover the costs of your taxes where we under collected

  3. State/Local taxes - We collect additional taxes where required by various states and municipalities in those states where we are under nexus laws.

By default, our network asses a "Tax Rate" of 16.75%. That is broken down as follows:

  1. 13.75% USF Fund Contribution

  2. 3% Regulatory Recovery Fee

Please keep in mind that we do not asses these taxes on non-telecom revenue, so your effective tax rate (the amount you pay in total in taxes when compared to the total amount you were billed) will be less than these percentages.

 

Tax Exempt Customers

In order to qualify as Tax Exempt on our network, you will need to file a 499A with the FCC and be marked as a Universal Fund Contributor. Additionally, you will need to provide your 499 Filer ID for us to verify your tax exemption status. We make this as easy as possible - please simply fill this out and send it back to our Support Department: http://www.skye.tel/fusf

To be exempt from any misc state or local taxes, you will need to provide a resellers certificate and/or that local agencies exemption number.

 

What is a FCC Filer ID?

If you are reselling Skyetel, and want to be tax exempt, you will need to file form 499A with the FCC to register yourself as a phone service provider. Upon completing that form, they will assign you a Filer ID. We are not tax and legal experts, so please contact an attorney familiar with these laws to get more information.

 

Tax Changes

Because these taxes change so frequently, and each of our customers have different obligations based on the services they are offering, it is not possible for us to globally announce to our customers when these taxes change. Please keep an eye on your Rates & Fees page to see if/when your Tax Rate changes.

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