Understanding Taxes and Fees

Last updated: 03/23/2021

In addition to the service charges billed for Convoso, Inc. (“Convoso”) services, taxes, fees and other charges may be applied to your invoice based on the type of service you have and your geographical location, among other factors.  Certain taxes and fees may show up as separate line items on your invoice.  Examples include, but are not limited to, the following.  

State & Local Taxes and Fees

State & Local Sales and Use Tax

All states, with limited exceptions, impose some form of state-level sales and use tax.  The sales and use tax is generally imposed on the sale or use of tangible personal property and certain services.  These taxes are intended to be passed on to the end user/consumer.  

In many states, local jurisdictions also impose a sales or use tax.  In some instances, the local sales and use tax is administered by the local jurisdiction.  In other instances, the state administers the local sales and use tax.

Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).  

Convoso collects sales and/or use taxes as required by state and/or local law.

Communications Services Tax

Some state and local jurisdictions impose communications specific taxes on communications services in addition to or in lieu of sales or use tax.  The communications services tax is intended to be passed on to the end user/consumer.  The rates for communications services taxes are usually different than the sales and use tax rates and vary by jurisdiction.

Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).  

Convoso collects communications services taxes as required by applicable state and/or local law.

Gross Receipts Taxes

A number of states impose a gross receipts tax on communications service providers.  In some states, gross receipts taxes are intended to be passed on to the end user/consumer.  In other states, the gross receipts tax is the responsibility of the seller, and there is no pass-through to the end user.

Certain exemptions may exist for gross receipts taxes that are intended to be passed on to the customer, based on the type of entity making the purchase (e.g., the federal government, state and local governments, non-profit entities, etc.).  

Convoso pays gross receipts taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

Local Utility Taxes

Local utility taxes are imposed by cities and counties in a select number of states.  Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).  

Convoso pays local utility taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

Local License Taxes

Local license taxes are imposed by cities and counties in a limited number of states. 

Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).  

Convoso pays local license taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

E911 Fees

In order to fund the provision of 911 emergency telephone service, state and local jurisdictions impose E911 fees on certain communications services. These fees are sometimes administered by the state department of revenue, but the majority of E911 fees are assessed and administered by local jurisdictions.  E911 fees are intended to be passed on to the customer on the invoice.  Sales for resale are generally exempt from E911 fees. Non-profit organizations are generally subject to E911 fees, whereas they might be exempt from taxes or other fees.

Convoso collects E911 fees from customers when required by applicable state and/or local law.

Other Fees

Cost Recovery

Cost Recovery Fee (CRF).   A Cost Recovery Fee (“CRF”) equal to 5% of invoiced charges (excluding taxes) will apply to services subject to direct regulation by the FCC.  This charge is imposed to recover costs incurred by Convoso (where applicable) for fees, contributions and/or charges associated with telecommunications services for the sight and hearing impaired, and administrative, legal and other costs, fees and expenditures related to compliance with Federal regulatory programs, along with other carrier and administrative expenses (including, but not limited to, costs imposed upon Convoso by its suppliers). 

This is a permissible fee but is not a tax or charge mandated by the government.  For more information on programs supported by the CRF, please see below.

Federal Telecommunications Relay Services (TRS) Fund. The TRS Fund was established by the FCC in 1993 to reimburse TRS providers for the cost of providing interstate TRS services.  TRS services are telephone transmission services that provide hearing or speech challenged individuals with the ability to use a traditional telephone.

Under the FCC’s rules, Convoso must contribute a percentage of its end-user communications revenues to the TRS Fund. The contribution percentage varies annually.