Wholesale Carrier Services, Inc. (“WCS”) rates and charges for WCS Services are exclusive of the following taxes, fees and surcharges. These charges do not contribute toward the any monthly or annual volume or revenue commitments and are not discountable.
Taxes, fees and surcharges include, but are not limited to the following:
- Applicable federal, state, local, and foreign sales, use, excise, utility, gross receipts and value added taxes
- Tax-like charges to recover charges WCS is required or permitted by a governmental or quasi-governmental authority to collect from others or pay to others in support of statutory or regulatory funds or programs
- All other tax-like charges that are imposed or operate like taxes, but are not directly referred to as taxes
- Any tax imposed by an authority on the benefits of a promotion offered by WCS involving services or goods of a third party as well as all other taxes
- A tax-related surcharge to recover a tax or fee imposed in a jurisdiction which levies, or asserts a claim of right to levy:
A gross receipts tax, a license tax, or other tax-like charge on WCS’s gross receipts, revenues or operations; and
- A tax on access charges incurred by WCS on access to telephone exchanges based on the amount paid for interstate and intrastate access charges; and
- A Property Tax Allotment which allows WCS to recover a portion of the property tax it pays to state and local jurisdictions directly and via its underlying carrier partners; and
- Universal Cost Recovery Mechanism which allows WCS to recover regulatory fees and expenses incurred by WCS such as FCC regulatory fees, federal regulatory fees to fund programs, various State Public Utilities Commission (PUC) fees, various state business licenses, and various state annual regulatory fees; and
- Franchise Cost Recovery Fees which allow WCS to recover local government franchise fees and right-of- way costs incurred for the use of the public right-of-way; and
- Regulatory Compliance Fee to recover a portion of internal costs and expenses incurred by WCS to implement, administer, and comply with federal and state regulations and programs.
All taxes, tax-like charges and the tax-related surcharges are referred to collectively as "Tax(es)."
WCS will assess all applicable taxes and the customer will be responsible for paying these taxes.
If WCS collects Taxes and a challenged Tax is found to have been invalid and unenforceable, and if the amounts collected were retained by WCS or delivered over to the jurisdiction and returned to WCS, WCS, in its sole discretion, may reduce service rates for a fixed period of time in the future in order to flow-through to customers an amount equivalent to the amounts collected, credit or refund such amounts to affected customers (less its reasonable administrative costs), or negotiate an arrangement with the jurisdiction to provide a future benefit for customers in that jurisdiction.
WCS reserves the right to collect any applicable Taxes retroactively.
If the Customer provides WCS with a duly authorized exemption certificate, WCS will exempt the Customer in accordance with law, effective on the date WCS receives the properly executed certificate. Note that some charges that are not eligible for exemption.
More detailed information regarding applicable federal, state and local taxes, fees and surcharges is provided below:
Federal, state and local governments assess a variety of taxes and surcharges. WCS collects the required taxes and remits the appropriate amounts to the taxing agencies. There are several types of federal, state and local taxes, fees and surcharges that apply to the Services sold by WCS including:
- Federal Universal Service Fund Surcharge (FUSF) – see below section on FUSF for more detail
- Federal, state and local taxes, fees and surcharges – see below section on taxes for more detail
- Other surcharges – see below section on other surcharges for more detail
FEDERAL UNIVERSAL SERVICE FUND (FUSF)
The Federal Universal Service Fund (FUSF) surcharge is billed at the FUSF rate established by the FCC. Universal Service is a Federal Communications Commission (FCC) program designed to ensure affordable access to telecommunications services to low-income customers, rural areas, school and libraries, and rural healthcare facilities. The FCC is the agency responsible for the regulation of domestic interstate and U.S.-to-international telecommunications services.
The rate changes on a calendar quarterly basis. It is a regulatory charge, not a tax.
Effective Jan. 1, 2018, the FUSF surcharge is 19.5% and applies to telecommunications services subject to direct regulation by the Federal Communications Commission (FCC), as well as to interconnected VoIP. A Customer will not be required to pay the FUSF if it demonstrates to WCS's reasonable satisfaction that it is (a) acquiring WCS Services for resale and not for its own internal use, (b) is contributing directly into the Universal Service Administration Company (USAC) with a valid Filer ID in good standing and (c) has filed the proper FUSF exemption annually with WCS.
The FUSF will: (i) be calculated after the application of promotional and other discounts; (ii) not be eligible to receive promotional or any other discounts; (iii) not be included to determine satisfaction of usage volume requirements; (iv) be calculated based upon the rates and charges applicable to the Customer's total interstate and international service, unless otherwise specified; (v) apply to tax-like and/or tax-related surcharges as defined or described herein; and (vi) not apply to calls using Telecommunications Relay Service (TRS) or to calls originated by certified Customers with hearing or speech impairments.
All telecommunications providers that offer interstate and international voice and data, private line, and other regulated services in the United States (“US”) are required by the FCC to contribute on an equitable and nondiscriminatory basis to the FUSF.
This includes Customers whose circuits with WCS:
- have only one end-point in the US, even if that circuit ultimately terminates to an international destination.
- Interstate circuits have FUSF applied to 100% of the revenue if both ends of the circuit are within the US.
- International circuits have FUSF applied to 50% of the revenue when only one end-point is in the US.
Taxes generally are assessed on the FUSF surcharge. It is important to understand that the FUSF surcharge is not a tax. It is a charge that the government imposes on telecommunications carriers on the voice and data revenues they collect. The FCC allows carriers to recover the cost of the surcharge from its end-user customers. Thus, the FUSF surcharge is not considered a tax and must be taxed as normal revenues.
FEDERAL, STATE AND LOCAL TAXES, FEES AND SURCHARGES BILLED IN ADDITION TO FUSF
Below is a summary list of the various federal, state and local taxes, fees and surcharges that WCS bills to its customers in addition to FUSF addressed above. Most of these charges are imposed directly on the Customer and are collected and remitted by WCS acting as an agent for the taxing authority.
- Federal Excise Tax
- State, County, City and Special District Sales Taxes
- State and Local Telecommunications Taxes
- E-911 Fees
- Gross Receipts Tax Surcharges
- State Universal Service Fund Surcharges
- State Regulatory Fees
- State and Local Right of Way Fees/Franchise Fees
- Special Taxes and Fees
In some situations, certain customers may be exempt from certain taxes and governmental surcharges. This is usually in the case of Customers who are reselling the services they purchase or Customers who are exempt charitable, government or religious organizations. WCS does not determine a customer's tax-exempt status. It is the Customer's responsibility to advise WCS of its tax-exempt status WCS will bill tax and surcharges until proper notice of exempt status and properly executed exemption documentation is provided. WCS Surcharges discussed in the following section are not covered by the standard exemption policy described above.
The information contained in this document is for reference only and is subject to change without notice. It is not intended to replace or supersede any Federal, State or Local laws and regulations. Updated information with respect to changes in Federal, State and Local taxes can be obtained from the respective governmental agencies.
In addition to FUSF, federal, state and local taxes, fees and surcharges discussed above, WCS applies surcharges to recover fees imposed for doing business in certain jurisdictions.
- Property Tax Allotment
- Universal Cost Recovery Mechanism
- Administrative Expense Fee
- Regulatory Recovery Charge
- Franchise Cost Recovery Fee
These surcharges are associated with certain taxes and fees imposed on WCS by underlying supplier carriers and third parties and are both consistent with our customer agreements and standard industry practice by carriers and service providers.
PROPERTY TAX ALLOTMENT
A tax-related surcharge of 3.75% applied to the total regulated and unregulated charges (including usage and non-usage charges) after the application of applicable discounts and credits to recover the property tax that it pays to state and local jurisdictions and its underlying carrier partners. Federal Universal Service Fund (FUSF) and other taxes, fees and surcharges may apply to the surcharge.
UNIVERSAL COST RECOVERY MECHANISM
A tax related surcharge equal to 1.90% of all applicable charges appearing on a customer's invoice will apply to interstate and international telecommunications services subject to direct regulation by the Federal Communications Commission as well as to Interconnected VoIP service charges treated as interstate under FCC rules. This charge is imposed to recover amounts incurred by the company for regulatory fees and expenses such as FCC regulatory fees, and North American Numbering Plan administration, various State Public Utilities Commission (PUC) fees, various state business licenses, and various state annual regulatory fees. Federal Universal Service Fund (FUSF) and other taxes, fees and surcharges may apply to the fee.
ADMINISTRATIVE EXPENSE FEE
A tax related fee equal to 0.95% of all applicable charges appearing on a customer's invoice will apply to interstate and international telecommunications services subject to direct regulation by the Federal Communications Commission as well as to Interconnected VoIP service charges treated as interstate under FCC rules. This charge is imposed to recover a portion of internal costs and expenses incurred by WCS to implement, administer, and comply with federal and state regulations and programs. Customer is not required to pay the Administrative Expense Fee if it demonstrates to WCS’s reasonable satisfaction that it meets the requirements to be exempt from the Federal Universal Service Fund surcharge as previously described under FUSF section above. Federal Universal Service Fund (FUSF) and other taxes, fees and surcharges may apply to the fee.
FRANCHISE COST RECOVERY FEES
A tax related surcharge to recover local government franchise fees and right-of-way costs incurred for the use of the public right-of- way will apply to customer invoices. The rates and application vary based on jurisdiction. Rates vary from county and state and are available upon request from WCS Customer Service or the WCS Service Guide.
REGULATORY RECOVERY CHARGE
A tax-related charge of 2.2% applied to all interstate and US billed international charges, excluding taxes, to recover amounts paid to the federal government for regulatory costs and telecommunications services for the hearing impaired (excludes Telecommunication Relay Services).