Taxes and surcharges
EXPLANATION OF SURCHARGES & FEES
Effective May 1, 2006
FEDERAL
FCC SUBSCRIBER LINE CHARGE
Imposed by the Local Exchange Company to recover costs associated with connecting to the various interstate telecom service providers' networks, the long distance companies, such as AT&T, Sprint, MCI/WorldCom, etc.
FCC LOCAL NUMBER PORTABILITY CHARGE
The FCC allows local telephone companies to recover certain costs for providing "telephone number portability" to its customers. This charge provides residential and business telephone customers with the ability to retain, at the same location, their existing local telephone numbers when switching from one local telephone service provider to another.
FEDERAL EXCISE TAX
Federal Excise Tax is a 3% tax imposed on consumers by the federal government for the privilege of using telecommunications services. Taxable services include all local and long distance calls. Repair and replacement incidental to ordinary maintenance is taxable. Installations are not taxable. Rental or leasing of any tangible property is also taxable.
Note: 501(c)(3) and/or nonprofit organizations are not exempt from Federal Excise Tax.
FEDERAL UNIVERSAL SERVICE FUND (USF)
Congress has mandated that all telephone companies providing interstate service must contribute to the USF for the purpose of providing the availability of basic telecommunications services to all persons at an affordable price. This surcharge is applied to all interstate and international calls including directory assistance.
STATE AND LOCAL
911 EMERGENCY SERVICE FEE
This charge is imposed by the local or county government to help pay for emergency services such as fire and rescue.
HIGH COST FUNDS
A fee imposed in some states to subsidize the installation and maintenance of rural telephone service in areas where the costs of construction would normally not be economically justifiable.
MUNICIPAL & STATE INFRASTRUCTURE FEES
Imposed by the telephone companies passing along their costs to do business within a city or state, including state specific Franchise Fees and other charges specific to the jurisdiction in which the equipment and services are provided.
OTHER COMMUNICATIONS FEES
A 2.5% administrative fee assessed against access revenue that is charged by Cypress Communications to recoup some of the costs of administering, collecting, and submitting the various taxes and surcharges and assuring data integrity.
PERSONAL PROPERTY TAX
A pass through of a customers pro-rata share of personal property taxes based on such customer's subscription to or payment for Cypress Communications' equipment or services.
POISON CONTROL FUND
A fee imposed in some states to assist in the cost of recycling of poisonous materials within the state.
PUBLIC UTILITY COMMISSION TAX
Imposed by some state Commissions to finance its operations.
RENTAL TAX
Imposed by some state or local governments on the lease of equipment. The rates vary by jurisdiction.
SALES & USE TAX
Imposed by state or local governments on the privilege of making sales of telecommunications services. The rates vary by jurisdiction.
TELECOM SURCHARGE
A 3.0% administrative fee that applies to everything USF applies to. It is used by Cypress Communications to recoup the costs of administering, collecting and submitting USF surcharges. The FCC does not prohibit this surcharge and it is set forth in Cypress Communications' Federal Tariff.
TELECOMMUNICATIONS RELAY SERVICE (TRS)
This state charge helps to pay for the relay center that transmits and translates calls for hearing-impaired and speech-impaired individuals.
UNIVERSAL SERVICE FUND
USF is imposed by some states to fund the subsidy of providing affordable telephone service to high-cost rural customers, low-income families and disabled individuals who would normally not afford residential telephone service.
