Sandy Beaches Software

Tax Exemption Caveats

Managing telecommunications tax and regulatory fee exemptions is complex because communications services are subject to a broad range of federal, state, and local taxes, fees, and surcharges. Subscribers are seldom exempt from everything – and if they are exempt from everything, multiple exemption certificates would most likely be required. Additionally, tax exemptions may have differing expiration dates. Companies need to stay on top of which subscribers are exempt from what taxes, and which taxes/fees should be assessed. Your billing software should:

1.)   Allow for the exemption of any tax or regulatory fee.
2.)   Track the expiration date of the exemption.
3.)   Store a digital copy of the subscriber’s exemption certificate.
4.)   Produce a report of tax and regulatory exemptions by subscriber.
5.)   Produce a report of expiring exemptions.

Exemptions for fees such as 911 and Federal Universal Service Recovery charges are rare. Nonprofit subscribers who are used to being exempt from sales tax, might argue over their need to pay, so it’s important to require all up-to-date exemption certificates from the prospective client prior to the sale. It’ll keep your sales team from producing inaccurate quotes, and in the event of an audit you’ll have the proper documentation.

If you are a reseller of telecommunications services, it might make sense to establish the ability to purchase telecommunications services from your carrier on an exempt basis. However, with this being the overly complicated world of telecommunications – standard sales tax resale exemptions are not sufficient to achieve exemption from all taxes. You need to verify with your carrier(s) what their specific requirements are and fill out all of their required paperwork. Brian Greer, of TaxConnex sums up reseller tax exemptions well in this article.

IntegriBill has what you need to efficiently handle tax exemptions for your subscribers. Let us help you navigate the complexity of tax exemptions and save you money!

Schedule a Demo

Shopping cart0
There are no products in the cart!
Continue shopping
Scroll to Top