The current system taxes all telecom providers – landline, wireless, and Voice over Internet Protocol (“VoIP”) – differently. Landline carriers, such as Verizon and Frontier, pay the most in taxes. VoIP providers, such as the cable companies have been exempt from most state and local taxation. In addition, confusion arises because some taxes (such as the E-911 surcharge) appear as a surcharge and not a tax on customer bills, while the FCC Subscriber Line Charge often appears on customer bills as a tax instead of a surcharge.
We stressed six points which will benefit consumers:
- The need to simplify and streamline any and all telecom taxes.
- All providers of similar services should be assessed the same taxes at the same tax rate.
- All taxes on phone service should be explicit, not implicit, on customer bills to avoid confusion.
- Lifeline recipients should be exempt from telecom taxes, other than sales taxes.
- If all providers of similar services were equally assessed, the tax rate could be reduced and the state could receive the same or more revenue.
- Surcharges allowed by utility regulators should be included in the tax discussions since they can be misleading and unclear to consumers.
The Committee Chair, Senator Liz Krueger, remarked that the state had not examined telecom taxes for many years and there have been significant changes in the marketplace during that time period. More hearings and further analysis is expected over the next several months.