VoIP Taxes and a VoIP Tax Guidebook

By Brian Greer on Wed, Nov 16, 2011 @ 10:19 AM

Topics: telecom tax

There are few days where I don’t speak with a new VoIP service provider who is concerned about VoIP taxes.   I get calls from current telecom service providers, internet service providers, cable operators, and even technology/systems integrators.  


As a result of the many companies that focus on delivering VoIP solutions to these new entrants the barriers to entry are remarkably low.  A new entrant can gain access to a complete white label solution with minimal, if any, upfront costs.  These VoIP solution providers deliver the soft switch, bandwidth, billing, and even tax/fee calculation support.

With market entry being rather simple, I encourage these businesses to not forget about their VoIP tax and regulatory obligations.  Some of the taxes and fees to consider include Federal USF contributions and the filing of a 499A form each year.  Additionally, almost every state, and some local jurisdictions, require VoIP service providers to collect and remit 911 fees.  Where the landscape becomes a bit more confused is at the state level regarding state USF fees and VoIP taxes including sales tax and telecommunications tax.  Only a handful of states currently regulate VoIP services as a telecommunications service.  States also differ in their application of a sales tax and telecommunications taxes to VoIP services.

With such a confusing tax and regulatory scheme – which is frequently changing – VoIP service providers are wise to develop a strategy for how they will comply.  Here’s a link to a guidebook on VoIP taxes and regulatory issues.

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Brian Greer

Written by Brian Greer