Understanding Cell Phone Taxes and Surcharges
by Daniel Mardorf
Ever wonder what exactly those charges under "Taxes,
Fees and Surcharges" on your cell phone bill actually are?
Because this charge can amount to 10% or more of your cell
phone bill, it's important to try to understand exactly
what your are getting charged for. Since cell phone taxes,
fees and surcharges vary by cellular service provider and
by state, it's hard to get an actual number on these
charges. You can, however, use our tax rates and
definitions below as your tax and surcharge guide to
estimate your taxes and fees.
Cell Phone Taxes
Sales Tax - Sales tax rates will apply for every state
that charges for a sales tax. These charges can be levied
against recurring monthly charges, local usage, toll
usage, or roaming usage. If your state does not charge for
sales tax, no sales tax rate will be applied. Important
note: The sales tax rate is based on the mailing address
of your bill.
City Tax - If your city charges a tax on sales, that rate
will also apply on your monthly phone bill based on
recurring monthly charges, local usage, toll usage, or
roaming usage.
County Tax - If your county charges a tax on sales, that
rate will also apply on your monthly phone bill based on
recurring monthly charges, local usage, toll usage, or
roaming usage.
Federal Excise Tax - Telephone services are subject to a
3% federal excise tax on a cellular customers recurring
monthly charges. This tax is collected by the cellular
service provider and remitted to the IRS. (Internal
Revenue Service) This tax does not apply on phone sales,
accessories or surcharges.
Annual Regulatory Fee - Telecommunications companies are
assessed an annual regulatory fee (sometimes called a
Federal Regulatory Charge) by the federal government. This
results in a one time annual charge per cell phone number.
As of October 2002, it was .24 cents.
Cell Phone Surcharges and Fees
Activation fees - Every cell phone service provider
charges a one time fee for activating the cellular
service, assigning the cell phone number and turning it
on. The standard one time fee is usually $35.
Local number portability - Cellular phone numbers are
becoming Portable, which equates to an increase in cell
phone surcharges. Fees vary by the service provider, but
extra monthly fees will be charged for number portability.
Since this fee won't be broken out on your cell phone bill
and lumped in "fees in surcharges", it's hard to pinpoint
an amount. Carriers such as Verizon Wireless and T-Mobile
do not charge for this service as of yet. We do know
Sprint plans to charge a monthly fee of $1.10 for this
service (Including number pooling) - which is probably a
good guide for other carriers that do or may charge.
Telephone number pooling - Carriers share a 'pool' of
telephone numbers that they can assign to a new cellular
customer. This way, no number can be assigned to two
customers at anytime, and it's more efficient. To maintain
this pooling resource, the fee is again passed on to the
customer. Since the fees are lumped in fees and
surcharges, it's hard to gauge an accurate monthly fee for
this service. Between .30 - .50 seems the norm per
provider.
Emergency 911 Service - Included in every cell phone bill
is a monthly charge for emergency cellular service. Fees
range from .40 to .75 per provider. This surcharge is
again a fee that the government charges the cellular
providers that then gets passed onto the customers.
Universal Service Fund Surcharge - All cellular service
providers are required to contribute to the Federal
Universal Service Fund. The universal service fund
subsidizes programs for schools, libraries, and rural
health care providers. This monthly surcharge equates to
1.2% on your recurring monthly charges.
Directory Assistance - Each provider charges a fee per
call for directory assistance. To avoid this per call
charge, use the yellow pages if possible.
Telecommunications Relay Service Surcharge - All cellular
service providers are required to contribute to the
Federal Telecommunications Relay Service (TRS) Fund in
order to finance how relay services get provisioned.
Telecommunications relay services enable hearing and
speech impaired persons to send and receive messages to
and from persons whose telephones are not equipped with
specialized telecommunications equipment. This monthly
surcharge is 0.073% on your recurring monthly charges.
Cancellation Fees - Since almost all cell phone providers
require a year or two commitment with every cellular
offer, if the contract is broken you will pay for it.
Sometimes this fee, also called a termination fee, can
range between $150 to $350 to cancel.
This article courtesy of http://www.mobilephonesites.co.uk.
You may freely reprint this article on your website or in
your newsletter provided this courtesy notice and the author
name and URL remain intact.
« home
This site is © Copyright www.cell---phones.com 2004-2005, All Rights Reserved
Steve's free web templates
|
