Taxes may differ by state and/or municipality. Additionally, the type of service being provided can also affect the amount of tax on your bill.
State Communications Services Tax is levied on all long distance calls and local service as well as some services and features that can vary by your state. For Florida, this combined tax includes a state sales tax rate of 6.8% plus a gross receipts tax rate of 2.37%, for a combined state communications tax rate of 9.17%.
Equipment that has either been purchased or leased is subject to state sales tax. The current Florida rate is 6% plus any additional discretionary surtax which varies by county.
Local governments collect tax from product purchases and from telecommunication service use, which may include equipment, installation, maintenance as well as local and long distance service. Each local taxing jurisdiction may levy its own local tax rate on communications services. While the state and gross receipts tax rates stay fairly constant, local tax rates can change frequently.
Gross Receipts Tax is a tax on total revenue and must be paid by telephone companies. Pursuant to Chapter 203, Florida Statutes, a tax is imposed on gross receipts from utility services that are delivered to retail customers in Florida. As mentioned above, for Florida customers the gross receipts tax is integrated into the State Communications Services Tax.
Certain telecommunication services are subject to a Universal Service Fund (USF) Fee. This rate is established by the Federal Communications Commission (FCC) and the proceeds are used to support telecommunication services to low income families, local schools, libraries and health care providers in your community. This rate is variable and typically changes quarterly. The USF applies to state-to-state and international calls and is also assessed on local service in the form of a per line charge. Recently, the FCC has subjected bundled VoIP services to USF charges.