Telephone Taxes Explained

If you have ever scrutinized your phone bill you might have wondered what all the charges are. If you have never carefully looked at your phone bill do so, you will be surprised. This month I will briefly explain all the extra charges that appear on your monthly bill. By breaking them down into 2 categories you can see what are taxes and what are fees authorized by the FCC.
Phone company fees:
1. Access charges: This is a fee charged to subscribers/other telephone companies by a local telephone company for using use its local network. The FCC sets a maximum per line access charge; local telephone companies can charge less than the maximum or charge nothing. Even though the FCC sets a maximum charge this is not a tax.
2. Directory Assistance: charge for placing 411 or (area code) 555-1212 directory assistance calls.
3. Monthly Calling Plan Charge: Charge for any monthly calling plan such as unlimited long distance calling.
4. Operator Assisted Calls
5. Calling Features Charges such as; call-forwarding, 3 way calling, call waiting, voice mail, or caller ID
6. Single Bill Fee: monthly fee for combining local and long distance charges onto one bill
7. LNP (Local Number Portability): LNP fees allow residential and business customers to retain their existing local telephone numbers when switching from one telephone service provider to another but staying at the same physical location.
Taxes or other government mandated fees:
1. 3% Federal Excise Tax: applied only to local service billed separately from long distance service.
2. State and Local Taxes: imposed by state, local, and municipal governments on goods and services (may be labeled gross receipts taxes).
3. Universal Service Charges: The Universal Service Fund (USF)/Universal Connectivity fee provides support to promote access to telecommunications services at reasonable rates for people living in rural and high-cost areas, low income consumers, rural health care facilities, and schools and libraries. Telecommunications service providers and certain other providers of telecommunications must contribute to the federal USF based on a percentage of their interstate and international end-user telecommunications revenues. A Universal Service line item will appear on telephone bills if a company chooses to recover its USF contributions directly from its customers.
4. 911 and TRS (Telecommunications Relay Service) Charges: 911 fees are a local government charge to help pay for emergency services such as fire and rescue. TRS charges help pay for the relay center that transmits and translates calls for people with hearing or speech disabilities.
I hope this brief overview of the numerous charges on your phone bill help you understand your bill. If you have additional questions or want to save money and simplify your bill give me a call or send me an email.

Craig Hodges

586-330-9252 DID/Cell


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