How We Tax You
At the end of the month, Skyetel will summarize all of your use onto our network, and then calculate your tax obligation based on those summaries.
At the bottom of your Statement, you will see these taxes explicitly broken out:
Where we tax you
Skyetel uses the billing ZIP code on your companies default billing credit card in order to determine taxable jurisdiction, and does not use the geography associated with any of the call detail records or phone numbers. This process is automatic, and will change as you update your credit card.
Statements before July 2020
Prior to July 2020, Skyetel collected taxes in real time and consolidated all taxes into a single taxable field. Statements predating July 2020 will still show this and will not show the table that breaks out all of the taxes that are charged to your account.
Am I Exempt?
There are three categories used for Tax Exemption.
Federal Taxes - These include FUSF and TRS taxes.
State PUC/Municiple Taxes - These include state level Service Fund Charges, or other state-specific taxes. For example, California has a Universal Lifeline Surcharge (ULTS), Advanced Services Fund Surcharge (CASF), etc.
Sales Tax - Ordinary Sales/Use Tax. You likely are already collecting this when you sell hardware.
You can use our Tax Calculator to see what taxes will be billed to your account, or to identify what taxes you recover from your customers. Learn more here.
Federal Taxes include USF charges, TRS charges, along with other miscellaneous taxes that come from FCC related parties. You are exempt from FCC USF and TRS charges if you have an FCC 499 Filer ID Number, and are listed as a "Universal Service Fund Contributor."
For example, this is Skyetel's 499 FCC Profile:
You can see that Skyetel is exempt because the FCC is confirming we are a USF Contributor:
Since this shows Skyetel as a USF Contributor, we are exempt from being taxed by the FCC directly. Instead we collect and remit from our own customers.
If you don't know what this is, that's okay, but it probably means you are not exempt from these taxes.
State & Municipal Taxes
This category is the most complicated to describe in a quick guide. Broadly speaking, some states have their own set of Municipal/State PUC taxes and fees that we must collect and remit whereas others simply rely on Sales Tax.
For example, Washington State (our home!) does not have dedicated PUC taxes for Interconnected VoIP providers and instead relies solely on Sales Tax. However, California has tons of taxes and fees. The most important in CA is the CPUC (California Public Utilities Commission) which has 6 categories that they tax. Those are:
- Deaf & Disabled Telecommunications Program Surcharge (DDTP)
- Teleconnect Fund (CFT)
- High Cost Fund (A) Surcharge (CHCF-A)
- Advanced Services Fund Surcharge (CASF)
- Universal Lifeline Surcharge (ULTS)
In the case of California, you will need a Utility number in order to be exempt from CA PUC charges. For reference, this is what Skyetel's CPUC compliance looks like:
You can look this up yourself here:
Other states, such as Illinois, West Virginia, etc will have their own requirements. Just like the Federal Taxes, if you don't know what these are, that's okay. It just means you probably are not tax exempt :).
Sales Tax is the most common exemption Skyetel receives, and probably needs the smallest amount of explanation. If you are purchasing anything for resale in most states, you will need a reseller certificate. Each states have different procedures for this and we would direct you to researching your own sales tax obligations independently of this guide. They are usually easy to get, and if you are reselling things, you probably already have one :)
Regulatory Recovery and Compliance Fees
Regulatory Recovery Fees are fees collected to pay for the cost of actually taxing you. It's sort-of like a tax because you are taxed. In our case, these fees pay for our third party tax compliance company, CSI, along with the other fees associated with compliance with new regulations, legal questions, etc.
You are exempt from Regulatory Recovery Fees when you are exempt from all three 3 categories - meaning you handle all of your own Regulatory and Compliance yourself, and do not rely on us to collect and remit taxes on your behalf.
Are You In Canada?
If you are providing services in Canada, your account will not be billed any US Taxes. Instead, you will be billed the standard GST VAT taxes applicable to Canadian businesses by the Canada Revenue Agency.
In order to request tax exemption from Skyetel, you will need to open a ticket and use the "Request Tax Exemption" selection.
Once you select this option, you will need to select which categories you are exempt from. We've broken this down into three main categories - Federal Taxes, State Taxes and Sales Tax.
Once you have submitted this ticket, an automated wizard will create a DocuSign and send it to who you designate inside this ticket (You will get confirmation when the DocuSign has been sent, and when it was completed).
Once the DocuSign has been completed, the Skyetel operations team will verify the provided information and remove the applicable taxes from your account. Please note that this process may take a few days - so please be patient as we review your submitted information.