Taxes on Bills

Understanding Your Bill: Taxes, Surcharges, and Fees

At Digitronics (d/b/a Digitvoip), we strive for transparency in our billing. The rates for our services marketed under the Digitvoip brand are separate from the taxes, surcharges, and fees mandated by federal, state, and local governments or regulatory bodies. These additional charges are itemized on your bill where applicable. Please note that these are subject to change without notice due to changes in laws, regulations, or rates set by governmental authorities.

Below is an explanation of common taxes, surcharges, and fees that may appear on your bill. The applicability and specific rates can vary based on your service location and the types of services you subscribe to. The examples provided, particularly those related to Florida, are for illustrative purposes and reflect rates as of a certain date; current rates may differ.

General Note on Taxes

Taxes can differ significantly by state and/or municipality. Additionally, the specific type of telecommunication or VoIP service being provided can also affect the classification and amount of tax applied to your bill.

Common Types of Taxes, Surcharges, and Fees

1. State Communications Services Tax (CST)

Many states levy a Communications Services Tax on various telecommunication services and features. The services covered and the tax rates can vary widely.

• Example (Florida): In Florida, a combined communications services tax (CST) applies, which includes components such as state sales tax and a gross receipts tax. As of a past reference date, this combined rate was approximately 9.17%. This rate is illustrative and subject to change by Florida authorities.

2. State and Local Sales Tax on Equipment

Equipment that you purchase or lease from Digitronics (such as VoIP phones or adapters) is generally subject to state and local sales tax.

• Example (Florida): The Florida state sales tax rate is 6% (as of a past reference date). Additionally, many Florida counties impose a discretionary sales surtax, which is added to the state rate. The total sales tax will depend on the county where the equipment is delivered or deemed to be used.

3. Local Communications Services Tax

In addition to state-level taxes, local governments (cities, counties) may also collect taxes from product purchases and from the use of telecommunication services. These can apply to equipment, installation, maintenance, and local and long-distance service. Each local taxing jurisdiction may establish its own tax rate, and these rates can change frequently.

4. Gross Receipts Tax

Some states impose a Gross Receipts Tax on the total revenue of companies providing utility services, including telecommunication services. This tax is typically passed through to customers.

• Example (Florida): Pursuant to Chapter 203, Florida Statutes, a tax is imposed on gross receipts from utility services delivered to retail customers in Florida. As mentioned, for Florida customers, this tax is often integrated into the State Communications Services Tax.

5. Universal Service Fund (USF) Fees

The Federal Communications Commission (FCC) established the Universal Service Fund to help ensure that all Americans have access to affordable telecommunications services. Certain telecommunication services, including many VoIP services, are subject to a USF contribution factor. This rate is set by the FCC and typically changes quarterly. The USF fee is applied to the interstate and international portion of your telecommunication service charges. Some states may also have their own state-level USF programs with separate fees.

6. E911 Fees/Surcharges

To fund the provision of 911 and Enhanced 911 (E911) emergency services, state and local governments often impose a fee or surcharge on services that can access 911. This fee can be a flat rate per line or per account.

7. Telecommunications Relay Service (TRS) Fund Surcharges

TRS helps individuals with hearing or speech disabilities communicate over the telephone network. The FCC and some states mandate contributions to TRS funds, which may appear as a small surcharge on your bill.

8. Other Regulatory or Administrative Fees

From time to time, other fees may be imposed by regulatory bodies or assessed by Digitronics to recover costs associated with compliance with governmental regulations or network-related expenses.

Questions?

If you have questions about the taxes, surcharges, and fees on your Digitvoip bill (from Digitronics), please contact our customer support. While we cannot provide tax advice, we can help clarify the charges appearing on your invoice. For specific advice regarding your tax obligations, please consult a qualified tax professional.

Digitronics, a Florida LLC (d/b/a Digitvoip)