Taxes on Your Bill

Taxes may differ by state and selected features, so you might find some variation with the following taxes on your bill.

City Tax

City governments collect a city tax from product purchases and from telecommunication service use, which may include equipment, installation, maintenance as well as local and long distance service.

State Sales Tax

State sales tax is levied on all long distance calls and some services and features by your state.

Additional State Taxes

Each state has the power to levy additional state taxes based upon Public Utility Commission (PUC) guidance. If you have a question about a charge on your bill that appears to be state-initiated, contact your state PUC for explanation of the charge and why it was instituted. In many cases, these charges are similar to those levied at the interstate level.

State Utility Gross Receipts Tax

The State Utility Gross Receipts Tax is a tax on total revenue to fund the Public Utility Commissions and other state services, and must be paid by telephone companies. This tax is usually a liability of the company (levied on the company’s receipts). Generally, this tax must be paid whether or not it is recovered from customers.

Universal Service Fees

Telecommunications services are subject to a Universal Service Fund (USF) Fee. This rate is established by the Federal Communications Commission (FCC) and proceeds are used to support low income families, local schools, libraries and health care providers in your community. The USF applies to state-to-state and international calls.

Note: Many states also have separate Universal Service Fees.

State Universal Service Fees

Some states assess State Universal Service Fees to support providing universal service for schools, libraries, rural healthcare facilities and low-income families. This fee is calculated as a percentage of your total monthly long distance charges.