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2024: A Year of Growth & Excellence for the Voxtelesys Support Team

2024: A Year of Growth & Excellence for the Voxtelesys Support Team

Support
Business Solutions
3CX
2024: A Year of Growth & Excellence for the Voxtelesys Support TeamAt Voxtelesys, we pride ourselves on delivering unmatched support to our customers. In 2024, we took bold steps to enhance our support team, ensuring that our clients receive the expertise and assistance they need when they need it. With a focus on growth, certification, and strategic restructuring, our team is now better equipped than ever to deliver exceptional service. Learn More
3CX Version 20

3CX Version 20

Call Center
SMB
PBX
3CX Version 20Take advantage of our offer: No setup fees will be charged for upgrading to 3CX V20 with Hosting by Voxtelesys until March 2024! - 2 Core, 2 GB All 3CX's hosted by Voxtelesys come standard with a minimum of 2vCore and 4GB's of memory, so no worries here. - Sufficient Disk Space needed. Ensure a minimum of 5 GB of free disk space - The source list must remain unaltered for a successful upgrade; any modifications will result in failure Remove any additional source lists. If you are utilizing Microsoft Azure, verify by checking "cat /etc/apt/sources.list.d/microsoft-prod.list." Learn More
3CX's Latest Release: Geo-Routing Headers Take the Lead in Dynamic E911 Integration

3CX's Latest Release: Geo-Routing Headers Take the Lead in Dynamic E911 Integration

3CX
911
Calling
3CX's Latest Release: Geo-Routing Headers Take the Lead in Dynamic E911 Integration3CX is leading the telecommunications industry with its new release, v20, which features an innovative integration of Dynamic E911. The main change in this update is that 3CX has decided to use geo-routing headers. This move simplifies the process and enhances the reliability and efficiency of emergency call routing. Learn More
Home / Learning Hub / Blogs / Debunking the Myth: VoIP Resellers and Tax ResponsibilityFAQs
Debunking the Myth: VoIP Resellers and Tax Responsibility
Ask the Experts
Customer Experience
SIP/VoIP

VoIP Service Providers often mistakenly believe they don't owe taxes and fees directly to the government, as long as they pay what their underlying carriers or hosted providers charge them. This is a common misconception. The Federal and State regulators assign the responsibility of collecting and paying taxes to the retail service provider, irrespective of whether they may have already paid somewhere up the supply chain.


Don't be fooled by suppliers saying “We have you covered!" VOIP Service Providers and Resellers must register and pay communications taxes.

 

The common misconception, that VOIP service providers and resellers of telecommunications services do not need to pay taxes and regulatory fees, such as Universal Service Fund surcharge, to government agencies as long as they pay taxes and fees billed by their suppliers (i.e., wholesalers), is a dangerous myth. Many resellers mistakenly believe that an underlying carrier or hosted switch provider can pay taxes and fees on their behalf.

Unfortunately, that’s not how it works. A retail voice provider cannot contract away its own regulatory and taxing responsibilities. A supplier cannot pay taxes and fees on behalf of a reseller customer. More than likely, this myth derives from a misunderstanding of the general prohibition on “double taxation” and a fundamental misinterpretation of the supply-chain tax and regulatory fee exemption system in the United States.

This blog is intended to inform and to dispel the myth that telecommunications resellers, including VoIP service providers, do not have any registration or remittance obligations for taxes and regulatory fees. Retailers bear the responsibility of billing, collecting, and remitting taxes and regulatory fees on sales of telecommunication services to their end-user customers, regardless of whether:

Illustration of 2 people discussing a fine

  1. The retailer has already paid taxes and fees to its suppliers, in the form of pass-through charges.
  2. The retailer’s suppliers have already paid taxes and regulatory fees on the same services.


Regulatory Fees

VoIP service providers and resellers have independent obligations to register and pay Federal and State USF fees on telecommunications services sold to end-user customers. At the federal level, resold telecommunications services are ONLY exempt from paying pass-through USF fees to their underlying carrier or supplier if they can prove that they are registered and contribute directly to the USF.

If a reseller of telecommunications services is unable to prove they are a contributor to USF, then the reseller is responsible for USF pass-through charges from its wholesale supplier. Alternatively, a reseller that is registered with the FCC and is listed as a USF contributor on the FCC website, is exempt from pass-through charges, thus preventing duplicative USF contributions.



Taxation

As with federal regulatory fees, retailers of resold telecommunications services may be subject to state and local taxation, regardless of whether their suppliers remitted such taxes. As with the USF, resellers must register and remit applicable taxes directly to authorities for sales of services to end-user customers. Registered resellers that provide proof of registration and remittance to their suppliers should not be assessed pass-through taxes. If the reseller cannot prove proof of registration (via a resale exemption certificate), the wholesale provider must treat sales of services the reseller as “end-user” sales and bill taxes on the sales to the reseller.

Illustration of a person paying their taxes

Wholesale providers cannot pay taxes “on behalf of” their reseller customer. In other words, paying pass-through taxes to the wholesale provider does not eliminate the reseller’s independent duty of registration and remittance of applicable taxes on its own retail sales.

Most states require service providers to prove their tax exemption status by submitting a valid resale certificate. Many states allow providers to complete a state-generated resale exemption form and remit it annually to their suppliers. For sales taxes, many states accept a “multi-state” reseller tax exemption form. Others have their own specific forms, which vary by jurisdiction and tax type.


For more details please refer to the FCC website.


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