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Telecommunications Fees, Taxes,
and Surcharges
This webpage describes telecommunications fees, taxes and
surcharges and applicable exemptions for governmental entities.
All information on this webpage was derived from a spreadsheet
issued on July 8, 2003 by the Office of Attorney General.
The following lists all known names for the fees, taxes and
surcharges. Each item on the list is linked to tables (below)
that tell whether the item should be paid or not and gives
the legal citation for that decision.
Telecommunications Fees, Taxes, and Surcharges
Fees, taxes and surcharges applicable to government telecommunications
are explained in the tables below. Each table has four columns.
Column one lists other labels or names the fees, taxes and
surcharges may be known as. Column two tells whether to pay
the charges, and if so, who should pay them. Column three
gives legal citations justifying the answers giving in column
two. Column four provides comments and clarification (if any).
The information contained in these tables was supplied issued
by the Office of the Attorney General on April 1, 2006.
FCC Subscriber Line Charge (SLC)
| FCC-Approved
Customer Line Charge
Interstate Subscriber Line Charge
Customer Subscriber Line Charge
Federal Line Fee
Easy Access Dialing
End User Access Charge
FCC End User Charge
Interstate Access Surcharge
FED Primary Carrier Multi-Line Charge
(Verizon) |
|
FCC
97-158 ¶¶ 72-87 (CC Docket No. 96-262) |
The
purpose of the SLC is for the LEC to recover part of
the booked cost of common lines.
It is a federally mandated fee.
It appears on the local service portion of the bill
and is assessed on a per line basis.
|
Telecommunications Relay Service
| Federal
TRS Charge |
|
47
CODE OF FEDERAL REGULATIONS § 64.601 - 64.605 |
Enables
telephone communications between persons who are hearing
and persons with hearing or speech disabilities.
Originally required by the Americans with Disabilities
Act. |
Utility Gross Receipts Assessment
| Public
Utility Gross Receipts Tax
|
Yes –
State and Pol. Subs. are required to pay it.
Exempt
If directly imposed on State, but not exempt if a
pass-through as part of the rate or price, which is
the usual.
|
TEX.
UTIL. CODE § 16.001 Tex Att'y Gen Op. H-1265 (1977).
Verizon Bill - It is line itemizing
its pass through
|
LECs
have traditionally recovered the Utility Gross Receipts
Assessment in base rates. However, long distance
carriers are allowed to recover it as a line-item on
customer bills.
The fee goes to pay for the expense of implementing
the Public Utility Regulatory Act.
Governmental entities should only expect to see this
fee in bills from long distance carriers.
TEX-AN users will avoid it.
State is liable for its charges for service.
|
Municipal Franchise Fee
|
Municipal Phone Service Fee |
|
Tex.
Att'y. Gen. Op. H-1265. |
Texas
courts have determined that municipal franchise fees
are not taxes, but rather users fees for city streets.
State, Pol. Subs., & non-profit schools pay them
as part of utility’s cost of service. |
Cost of Service Surcharge
| None |
Yes-
except SWB.
See comment on Verizon
|
PURA
§53.202, Tex. Util. Code Ann. SWB v. PUC,
863 S.W.2d 754 GTE v. PUC,
978 S.W.2d 161 Tex. Att'y Gen. Op. H-1265
(1977). |
Pursuant
to HB11, 72th Leg., 1st Called Session, the methodology
changed for state franchise tax.
Telecom utilities are allowed to pass the portion of
the tax due to the change in methodology of the fee
to customers as the cost of service.
However, Verizon is not allowed to increase the HB
11 cost of service from the amount applicable at the
date of their incentive regulation election.
SWB is not allowed to take advantage of this provision
because their rates are and have been frozen. |
Expanded Local Calling Service (ELCS) Surcharge
| None |
Yes |
None
given. |
No
exemption.
It's a rate element. |
Extended Area Service (EAS)
| None |
Yes |
None
given. |
No
exemption.
It's a rate element. |
Rural Zone Mileage
| None |
|
None
given. |
No
exemption.
It's a rate element. |
Texas Rate Group Reclassification Surcharge
| None |
Yes, except TEX-AN Customers
|
None
given. |
SBC
customers will see this surcharge appear on bills for
the first time in October 2003. |
Federal Universal Service Fund (FUSF) Charge
Appearing on the Local Service Bill.
| Universal
Connectivity Fee (AT&T) |
Yes-
Effective September 1, 2001
|
FCC
00-193 ¶ 58, 82FCC DA 01- 1429 |
Recent
FCC orders allow LECs to pass through this fee on local
bills.
It should be paid absent a contrary contractual agreement.
Balances which may have been due prior to 09/01/01
are to be negotiated with the carrier. |
Local Number Portability Charge
Appearing on the Local Service Bill.
| None |
Yes-
Effective September 1, 2001
|
FCC
99-72 ¶ 32 FCC 98-82 ¶¶ 9, 139 |
The
Number Portability charge is not federally mandated;
however it is allowed to be a company specific tariffed
charge.
It should be paid absent a contrary contractual
agreement.
Balances which may have been due prior to 09/01/01
are to be negotiated with the carrier. |
Federal Excise Tax
| Federal
Tax |
No -
State, Pol. Subs. & non-profit schools are tax-exempt
|
26
U.S.C § 4253 (i) & (j). |
The
State, Pol. Subs. & non-profit schools are exempt
from paying federal excise tax. |
State Sales Tax
| None |
No -
State, Pol. Subs. & non-profit schools are tax-exempt
|
TEXAS
TAX Code § § 151.309 % 151.310 |
State
agencies, Pol. Subs. & non-profit schools are exempt
from paying state sales tax. |
County Sales Tax
| None |
|
Maverick
County WCI Dist. No. 1 v. State, 456 S.W. 2d 204; and
Tex. Atty. Gen. Op. MW-551 |
State
agencies are exempt from paying county taxes or "special
assessments." |
Local/City Sales Tax
| None |
No -
State, Pol. Subs. & non-profit schools are tax-exempt
|
Maverick
County WCI Dist. No. 1 v. State, 456 S.W. 2d 204; and
Tex. Atty. Gen. Op. MW-551 |
State
agencies are exempt from paying local or city taxes
or "special assessments." |
Metro Transit Authority (MTA) Tax
| None |
No
-
State is exempt. |
Maverick
County WCI Dist. No. 1 v. State, 456 S.W. 2d 204; and
Tex. Atty. Gen. Op. MW-551. |
State
agencies are exempt from paying county taxes or "special
assessments". |
Property Tax
| Federal
Regulatory Fee (AT&T)
|
No -
State is exempt from payment of property tax and is
prohibited from paying non-mandatory fees.
|
Would
be a term of contract |
This
is a surcharge created by the providers to recover property
taxes paid to various state and local taxing authorities.
This charge should no be paid absent a contractural
obligation to do so. |
Federal Universal Service Fund (FUSF) Charge,
that appears on the long distance bill
| Universal
Connectivity Fee (AT&T)
|
Depends on terms of contract.
If a contract allows or requires the payment
of these charges, they should be paid.
A contractual agreement to pay the charge
is not considered illegal.
|
FCC 97-420 ¶ 284 FCC 97-157 ¶¶ 800, 855
FCC 98-67 ¶ 138 (CC Docket No. 96-45)
FCC 99-72 ¶ 32 (CC Docket No. 98-170)
|
None |
Texas Universal Service Fund (TUSF) Charge
|
None |
No -
State, Pol. Subs. & non-profit schools are tax-exempt.
|
PUC
Subst. R. 26.401 PUC Docket No. 20616, Declaratory Order,
April 6, 1999 |
The
TUSF is assessed against telecommunications providers
based on "taxable telecommunications receipts."
PUC ruled in Docket 20616 that LECs cannot recover
any portion of the TUSF assessment from tax-exempt entities. |
Texas Infrastructure Fund (TIF) Assessment
| Sprint
PCS - Texas State Special Fee or Special Tax |
No
-
State, Pol. Subs. & non-profit schools are tax-exempt.
No-
If purchasing on the current state contract or any other
contract that precludes rate changes or TIF assessment
as part of contract. |
34
Tex. Admin. Code § 3.110 Tex. Util Code Ann. §57.043
Tex. Tax Code § 151.309 Tex. Att'y Gen. Op. H-1265
(1977) |
The
TIF is assessed against telecom utilities and wireless
providers based on taxable telecommunication receipts.
Since State, pol. subs. & non-profit schools are
exempt from sales tax, they need not pay the TIF fee. |
Presubscribed Interexchange Carrier Charge (PICC)
| Carrier
Access Fee (MCI)
Carrier Line Charge (AT&T)
Pre-Subscribed Line Charge (Sprint)
Regulatory Related Charge (Sprint Long
Distance)
Federal Line Fee
Easy Access Dialing |
Depends on terms of contract.
If a contract allows or requires the payment
of these charges, they should be paid.
A contractual agreement to pay the charge is not
considered illegal.
|
FCC
99-72 ¶ 32 FCC 97-158 ¶¶ 55, 90 FCC Form
No. CCB-FS012 |
This
surcharge has been phased out for most customers. |
Local Number Portability Charge
Appearing on a Long Distance Bill
| None |
Depends on terms of contract.
If a contract allows or requires the payment of these
charges, they should be paid.
A contractual agreement to pay the charge is not
considered illegal.
|
FCC
99-72 ¶ 32 FCC 98-82 ¶¶ 9, 139 |
None |
Number Pooling
|
None |
Depends on terms of contract.
If a contract allows or requires the payment of these
charges, they should be paid.
A contractual agreement to pay the charge is not
considered illegal.
|
None
given. |
None |
Administrative Expense Fee
| AT&T
Administrative Expense Fee |
|
None
given. |
AT&T
has agreed that the state agency accounts will not pay
this fee. |
800 Calls from Payphones
| None |
|
Fixed
price contract |
FCC established
a rate of $0.24 as default per-call compensation to payphone
providers for 800 subscriber calls made from payphones,
but DIR has extended fixed price contract with AT&T
for 800 service. |
9-1-1 Emergency Service Fee
| USA
Regulatory Obligation & Fees (Verizon) |
No -
State is exempt.
Yes -
Pol. Subs. not exempt
No-
for Chapter 771 fees (e.g., 50 cents).
|
Tex.
Health & Safety Code § 771.074 |
The
law prohibits the imposition of fee on any state agency
or university, but specifically excludes junior
and community colleges from the prohibition.
May not be imposed on or collected from the state.
Exemption does not apply to lines in use by students
at dormitories, as they are not lines in official state
use |
9-1-1 Equalization Surcharge
| Texas
Equalization Surcharge (AT&T) |
No -
State is exempt
Yes -
Pol. Subs. not exempt
|
Tex.
Health & Safety Code § 771.074
Exemption |
The
law prohibits the imposition of fee on any state agency
or university, but specifically excludes junior
and community colleges from the prohibition.
May not be imposed on or collected from the state.
Exemption does not apply to lines in use by students
at dormitories, as they are not lines in official state
use. |
Poison Control Surcharge
| Telephone
Tax (AT&T) |
No -
State is exempt.
Yes -
Pol. Subs. not exempt
|
Tex.
Health & Safety Code § 771.074 Exemption |
The law
prohibits the imposition of fee on any state agency or
university, but specifically excludes junior and
community colleges from the prohibition. |
Late Charges
| None |
No
-
State is exempt.
Yes -
Pol. Subs. not exempt, but should turn to Prompt Payment
Act |
PURA
§55.010, Tex. Util. Code Ann. (Vernon 1998) TEX.
GOV’T CODE § 2251.001 et. seq. PUC
Subst. R. 26.27 Tex. Rev. Civ. Stat. Ann.art. |
A
"telecommunications utility" may not impose
a fee, penalty, interest, or any other charge for delinquent
payment of a bill for services to the "state,"
including any state agency.
Definition of "telecommunications utility"
does not include wireless providers.
Pol. Subs. should turn to Prompt Payment Act for calculation
of interest on overdue payment. |
Minimum Usage Charge
| None |
|
Term
of Contract. |
Governmental
entities should take long-distance service from
TEX-AN |
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