New York Phone Taxes
Here’s a Summary of the telecom taxes for the New York area. Unfortunately this varies from state to state so it’s hard to create a simple summary for everywhere, and many of these don’t apply to toll free service, but I thought it was still interesting to see where your money is really going. The national average is about 17% of the bill. NY is actually slightly below the average in taxes. The government doesn’t want you to see this and trys to hide it, but they seem to get higher and higher and more and more complicated every year!
Subscriber line charge: Instituted after the 1984 break-up of AT&T to pay for maintenance of local communications networks. While capped by the FCC, it’s not a tax. It’s an industry charge applied to each separate phone line in your home or office.
Local number portability: Federally approved fee created after the 1996 Telecommunications Act. Local telephone companies use it to cover the expenses of allowing a consumer or business to retain their existing telephone number when switching long-distance carriers. Also not a tax.
911 fee: Imposed by local governments to pay for E-911 services. Orange County’s 35-cent monthly fee, for instance, raised an estimated $840,000 in 2004. Telephone companies question whether this tax should continue after local 911 facilities are established.
Federal excise tax: Enacted to finance the Spanish-American War. Now, 107 years later, the federal government still imposes this 3 percent “luxury” tax on all telecommunications services, including local and long-distance calling. This is the telecom lobby’s least favorite mandate.
Sales tax: State and local sales tax rates apply, too. In Orange County, tack on an extra 0.25 of a percentage point to help the Metropolitan Transportation Authority pay its bills.
Gross revenue surcharge: Used to pay for a state excise tax – also called the gross income tax – New York imposes on all telecommunications companies.
Metropolitan Transportation Authority surcharge: Double taxation! The state imposes this surcharge on what it collects from the gross income tax, providing yet another revenue stream for the MTA. Then, of course, the telephone company passes it on to you.
Universal Service Fund recovery charge: Since the 1930s, Congress has required all telephone companies to contribute to the Universal Service Fund, which subsidizes affordable phone service in low-income and rural areas. While not mandated to, most providers include the charge as a line item on your bill. Since it’s limited to long-distance calls, consumer groups think it’s unfair when telephone companies apply this tax to “bundled” service plans.
Municipal tax: Sometimes levied on goods and services by state and local governments. The Village of Goshen, for example, expects to raise $115,000 this fiscal year with taxes on utilities. Utilities, in turn, pass that cost on to consumers.
New York long-distance surcharges: Fees assessed on all long-distance calls.
Presubscribed Interexchange Carrier Charge (not shown): Also called National Access Fee or Carrier Line Charge, this fee is levied by your long-distance company to recoup the switching costs charged by your local phone provider. While regulated by the FCC, the charge varies from company to company.
Pay phone surcharge: A variable surcharge increasingly imposed by telephone companies on toll-free and calling card calls that originate from pay phones.
Sources: Federal Communications Commission, New York Public Service Commission, New York state Consolidated Laws, United States Telecom Association, TeleTruth, Frontier Communications and Verizon.
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azrin (1 comments.) says:
November 22, 2007 at 11:45 am
Bill..it’s getting more complicated… I just have to hit more pills to understand this.
Best regards and thanks for popping by
azrin @ http://www.azrin.net