The Skyetel Tax Calculator is a free tool that is available to Skyetel customers to determine what taxes they should be collecting from their end users. We know how ridiculously complicated taxes and compliance is in the Telecom world, and so we're doing everything we can to make understanding the red tape as easy as possible.
The Tax Calculator has a list of static products that serve as general categories for you to use. These categories are tax categories, and may not be a perfect fit for your billing. For a more tailored export, we recommend you use the description field.
You may mix and match any different product to align as closely as possible with how you actually bill your end user. For example, if you sell Hosted PBX services, along with a conference suite, E911 and Spam Prevention, you can use all of those products collectively to generate a tax estimate.
Hosted PBX Extensions/Seats - Use this product if you are selling hosted PBX services and billing per extension or per user. If you include overage billing (for toll free or international), you can include that in the "SIP Trunk - Per Minute product" below.
SIP Trunk - Per Channel - Use this product if you are selling SIP Trunks and are billing per channel to your end user.
SIP Trunk - Per Minute - Use this product if you are selling any per-minute charges to your customer. This single product can be used for Toll Free, Long Distance, International, etc. You only need the quantity of minutes and what your incremental charges are.
Misc Telecom Service - Use this product for a telecom product that is still categorized under VoIP, but does not fit into other products. For example, you can use this for Conference Calling.
Phone Number - Use this product for monthly billing of individual local phone numbers.
Toll Free Number - Use this product for monthly billing of individual toll free numbers.
Phone Number Activation - Use this product for one time billing for phone number activations.
Fax Service - Please stop using fax, but if you must, you can use this product for efax/fax ATA services.
E911 - This product is the most tricky. If you are selling Hosted PBX services, use this field for the number of extensions that are able to dial 911. If you are selling carrier services (like SIP Trunks) use this field for the number of e911 registered addresses you have.
Feature Costs (Caller ID, Spam Lookup, etc) - This field is used for features that are delivered along with inbound phone calls. For example, use this for Caller ID or Spam Prevention lookups.
Ongoing Support/Labor - Use this field for any labor hours or flat rate labor you provide for your customers on an ongoing basis. Do not include installation labor in this field.
Installation Charge - Use this field for any labor related to the installation or deployment of your end user's telecom services.
Licenses and Software - If you resell software licenses (like 3CX), use this field for what you bill your end users for that software.
By Default, end users should ordinarily be billed for the entirety of their Recoverable taxes (more on that below). However, there are circumstances where you are providing services to someone who is themselves providing services. When this is the case, you can specify what taxes the end user is exempt from via this drop down.
There are 4 options here:
Exempt from Sales Tax (S) - Use this option if your end user is reselling your services, but is not registered with the FCC or the State PUC (If applicable). This is the most common kind of exemption in these scenarios.
Exempt from Federal and State Tax (S + Z-35, Z-59, Z-60) - Select this option if the end user is exempt from Federal USF charges and State PUC charges, but are NOT exempt from Sales Tax. This is very rarely used - so double check before selecting it.
Exempt from All Taxes (Y) - This is our most common exemption - Select this option if the end user is exempt from Sales Tax, Federal USF taxes and State PUC taxes (if applicable).
Exempt from State, County and Local Taxes (O) - Select this option when the end user is exempt from State PUC taxes, but not sales tax nor Federal USF charges. This option is usually only for state government agencies, universities and/or non-profits. Please double check with CSI or your Attorney for when to use this option for your particular end user.
What is the gibberish in the parenthesis?
We rely on CSI's Tax Rating API data to calculate these results. In order to stay as transparent as possible with their data, we are showing the API calls we are making for our customers who themselves interact with CSI's API.
Recoverable vs Non Recoverable
Recoverable - A Recoverable tax is a tax that you bill to your customers and collect/remit on their behalf. The most common kind of recoverable tax is standard Sales Tax. These taxes appear as separate line items on the end users bill, and generally have specific uses that your end user can research. The most important part of these taxes is that they effectively cost you nothing - they are passed through you to your customers.
Non Recoverable - A Non Recoverable tax is a tax that you may not rebill your customers for. The best example of this is Federal Income Tax - this tax is your tax, and you can't recoup that from your customers as a separate line item on an invoice. Another example of this is Washington State's B&O tax. There are far fewer of these than there are Recoverable Taxes. These taxes are not passed through to your customers, and actually cost you money out of your bottom line.
Important note about Non Recoverable Taxes - these usually are not things that should surprise you, are usually accounted for by your ordinary bookkeeper, and may not be related to the fact that you are providing telecom services. For example, Washington State (our home!) has a B&O tax that is listed on this report even though the customer is never billed for it, and it has nothing to do with the fact that we provide telecom services. Skyetel would be billed B&O taxes from WA if we sold baskets.
We decided to display these kinds of taxes because we want to be transparent with the data that the CSI API is returning to us, and to show that there are some gross receipt taxes that are incurred simply by doing business.
The exempt field will show Yes or No based on the value you select for exemption options.
The FCC can only collect charges on your VoIP services when they cross state lines (Interstate revenue). Identifying what percentage of your revenue falls into the “Interstate Revenue” category is really complicated for some lines of business (like Hosted PBX Providers) and so the FCC has provided a technique to safely calculate this without having to worry about tracking where your customers called.
Therefore, we decided to use the Safe Harbor provisions as part of the per minute and per seat calculation. It is not possible to use this tool for traffic studies nor inter/intra tax rating.
Don't Freak Out :)
The purpose of this tool is to educate, not to scare. Calculators like this one do a good job of showing you what taxes you can be collecting and remitting, but are not good at showing you how hard/easy that process is. For example, when you use our calculator for services in Southern California, this crazy tax list is returned:
|Federal Communications Commission||Federal Universal Service Fund|
|Federal Communications Commission||FCC Cost Recovery Fee|
|Federal Communications Commission||Federal Telecommunications Relay Services Fund (Non-IPCTS)|
|Federal Communications Commission||Federal Telecommunications Relay Services Fund (IPCTS)|
|California, State of||Deaf & Disabled Telecommunications Program Surcharge (DDTP)|
|California, State of||Teleconnect Fund (CFT)|
|California, State of||High Cost Fund (A) Surcharge (CHCF-A)|
|California, State of||Advanced Services Fund Surcharge (CASF)|
|California, State of||Universal Lifeline Surcharge (ULTS)|
|California, State of||Emergency Telephone Users Surcharge|
However - both the FCC and State of California make remitting these taxes a breeze. The FCC's tax collection couldn't be easier and California has a crazy easy page where you just put in how much you billed for telecom services in their state, and they'll do the math for you. For example, if you billed $5,000 in June, this is what that page looks like.
After you click Continue, they'll just draft the taxes right out of your account - It's super easy.
Don't let people or companies scare you out of this industry because of taxes and regulatory compliance issues. Every business is challenging - whether you sell telecom or baskets. People who scare you are either trying to sell you something or don't want competition!
This information is collected, maintained and updated on an ongoing basis by Compliance Solutions Inc. We use this information ourselves when we bill our customers for their taxes (the taxes you see on your statement), and even use CSI to remit these taxes to the various state and federal authorities on our behalf.
Skyetel understands the value you place on your business's privacy, confidential operations, trade secrets and customer lists. Please know that Skyetel does not share any information with any third party or government agency as part of our Tax Calculator. This information is protected by the Confidentiality clauses in our Terms of Service, and our CPNI Policy. CSI (or any third party or government agency) does not have access to your information, or any identifying information about your customer. We take your concerns around privacy very seriously and want to assure you that your use of the Skyetel Network and its tools remains strictly confidential.
When you use the Skyetel Tax Calculator, we take the values you provide in the product fields along with the ZIP code and query the CSI API for the tax results and display them for you. The Descriptions you provide are only saved locally in your browser so you can export them into a CSV.
Who To Call For Help
Unfortunately, Skyetel Support is not able to provide specific advice or answer questions about what taxes should be paid, where, why, or how. For questions surrounding the data found in our Tax Calculator, we suggest that you contact CSI directly. They are incredibly helpful and knowledgeable, and are an outstanding resource to have as part of your own telecom toolkit.