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State and Local Tax being charged on Fees

State and Local Tax being charged on Fees

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Copper Contributor merlin96
Copper Contributor
Posts: 43
Registered: ‎11-06-2010
Message 1 of 9
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My bill recently increased yet again.  Most of the increase was to the Federal Universal Service Fee; there was also a small increase to PA Gross Recipts Tax Surcharge and to my state and local tax.  There was no increase to my actual services - triple play or equipment rental.

 

From this, it seems that Verizon is applying state and local tax to the Federal Universal Service Fee.  Does anyone know whether this is permissible?  It doesn't seem like it should be but I don't know and can't find anything about it.  I tried calling but the hold times were prohibitively long.  I also tried asking them on Facebook message but got a nonsensical reply.  Anyone know anything about this?   I am in the state of Pennsylvania.  Thanks.

8 REPLIES 8
Gold Contributor VII
Gold Contributor VII
Posts: 4,665
Registered: ‎10-18-2016
Message 2 of 9
(496 Views)

I think i seen this post at DslReports. 

The universal service fund increases and decreases due to telephone usages. As with tv they are highly taxed and then you have the bogus surcharges by the provider.

 

i know that in my state you can contact your state taxing authority and see what the results are for Pennsylvania. In NY taxes on taxes are not allowed.

 

you may also do a google search and research the results.

 

you could get rid of phone and go to a voip provider, and ditch tv and use a streaming service for it. You will save big money. Internet has no taxes as if right now. But in NY verizon places a bogus NYS Municipal Construction Surcharges on each fiber invoice since it is not yet regulated by our state Public Service Commission 

Copper Contributor merlin96
Copper Contributor
Posts: 43
Registered: ‎11-06-2010
Message 3 of 9
(491 Views)

Thanks.  That was me cross-posting on both forums.  Thank you for your answer.  I did try to google but didn't find anything.  It is helpful to know that at least in some states, this is not allowed.  It's not a lot of money but it just seemed wrong.  I will definitely follow up with Pennsylvania.  

Gold Contributor VII
Gold Contributor VII
Posts: 4,665
Registered: ‎10-18-2016
Message 4 of 9
(487 Views)

@merlin96 wrote:

Thanks.  That was me cross-posting on both forums.  Thank you for your answer.  I did try to google but didn't find anything.  It is helpful to know that at least in some states, this is not allowed.  It's not a lot of money but it just seemed wrong.  I will definitely follow up with Pennsylvania.  


When i advocated for the taxpayers, i always said “a penny grows into dollars, into hundreds, thousands and millions” that small amount is pure profit for them. Contact your states tax department and ask 

Copper Contributor merlin96
Copper Contributor
Posts: 43
Registered: ‎11-06-2010
Message 5 of 9
(479 Views)

Yes thank you.  I definitely will. For me alone it adds up to about .40 total a monht.  Multiply that by however many -- it's a lot of money if it's wrong.

Copper Contributor merlin96
Copper Contributor
Posts: 43
Registered: ‎11-06-2010
Message 6 of 9
(434 Views)

I finally got through to Verizon today to ask for clarification on what looked like taxing of Federal Univeral Service Charge.  Math adds up exactly to 8% increase in fee and tax so it really looks like it's being taxed.  Nonetheless, the guy I spoke with insists no, it's not.  State and local taxes just randomly went up because Verizon supposedly has an agreement with the PUC to raise the amount of taxes any time they want (i.e., to higher than 8%).  PUC hotline guy referred me to PUC website which was like searching for needle in hay stack.  No wonder Verizon gets away with this.  Anyone ever heard of this?  It sounds unconstitutional to me.

Gold Contributor VII
Gold Contributor VII
Posts: 4,665
Registered: ‎10-18-2016
Message 7 of 9
(426 Views)

@merlin96 wrote:

I finally got through to Verizon today to ask for clarification on what looked like taxing of Federal Univeral Service Charge.  Math adds up exactly to 8% increase in fee and tax so it really looks like it's being taxed.  Nonetheless, the guy I spoke with insists no, it's not.  State and local taxes just randomly went up because Verizon supposedly has an agreement with the PUC to raise the amount of taxes any time they want (i.e., to higher than 8%).  PUC hotline guy referred me to PUC website which was like searching for needle in hay stack.  No wonder Verizon gets away with this.  Anyone ever heard of this?  It sounds unconstitutional to me.


In NY we use to call them the Public Disservice Commission. You see verizon was under scrutiny and regulated when this was on copper. In fact NY has fined them tons of cash for failing obligations, installs and support issues.

 

now with fiber, verizon is running amok since it is not regulated. The state regulators are in talks to control them, but verizon and others are dragging their feet.

 

the tax department in your state might be of a better service. Like i said in NY verizon and others cannot tax a tax. Years ago i tried Ooma which is a voip service for phones. The pricing is via state of residence, if you take just basic phone service they only bill you monthly for taxes and mandated surcharges. Originally when i ported in the cost to me was $3.40 +/- and i watched it carefully. Then one month there was a .03¢ increase. I called and told them you cannot levy a tax on a tax in NY. 

 

They balked and kept saying they could. I said the Tax and Finance department sent the law to me. I faxed it to them. They said it was staying. I said i am not. So for .36¢ they lose a customer. I also notified Facebook and Twitter and consumer reporting sites, the FCC, my state tax department. I caused them so much loss of revenue that they paid me every dollar i spent on them even for their phone telo device.

 

you must stay diligent and keep hammering them. Companies that get bad press lose far more than they will ever take in from you. 

Copper Contributor merlin96
Copper Contributor
Posts: 43
Registered: ‎11-06-2010
Message 8 of 9
(392 Views)

Thanks.  I called back and spoke with another CS rep who confirmed the tax is on the surcharge and said he thinks it's required that way by the FCC.  I will check that claim out next.  PA's state tax department is the worse to contact, especially about sales tax.  Their phone lines are voice mail message only and they never seem to calll back.  I've tried calling them before about vendors taxing nontaxable items.  Anyway, I could try calling the FCC or I may just contact my city councilman's office and see if they can help me get an answer to this.

 

Yes I could get rid of the phone line.  I'm still under contract but it's something to consider once my contract expires in a few months.  I may be getting rid of Verizon entirely.

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Gold Contributor VII
Gold Contributor VII
Posts: 4,665
Registered: ‎10-18-2016
Message 9 of 9
(362 Views)

IT would seem telling them Verizon is taxing their own bogus surcharge is a legitimate tax on stupidity. So the tax department sees this as ok as long as the bogus surcharges are accessed on the consumers, then the state of Pennsylvania gets more revenue by taxing it.

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