Sirch
join:2012-06-14
Portland, OR | Question about Taxes with SIP accounts, is this right? Howdy! I just discovered this forum yesterday, wish I had found it a few months ago when I was looking for a SIP Provider!
We recently switched from 8x8 hosted service with about 30 individual lines, to our own Asterisk based PBX with service from voip.ms.
So far, so good. My question is regarding Taxes. Not that I'm for them mind you, but I just want to make sure I'm not putting myself or my company at risk of some kind of tax fraud.
With 8x8, almost 40% of our bill was in taxes and other fees. It is still a VoIP service, and I understand the e911 fees, but the majority was for "regulatory recovery fee" and "Universal Service Surcharge" which accounted for about 60% of the taxes & fees section.
Now, we have no such fees with Voip.ms. We have about 10 DID's, but everyone now has their own extension (about 56 employees).
We have routing for e911 through a primary line as well as a backup line, reducing the e911 fees to only 2 lines.
Am I doing this right? Do I have to pay some other kind of taxes for the service? A business use tax or anything? It just seems awfully inexpensive. At the per minute rate, we are saving about 88% comparatively while giving everyone their own extension, which would have cost us at least $8 a user with 8x8.
Not sure if it makes a difference, but I'm in Oregon which doesn't have a sales tax.
Thanks for the clarification! You know what they say, if it seems too good to be true, it probably is. I'm waiting patiently for the "gotcha". |
|
Reviews:
 ·Cablemas
| Hello Sirch
We are pleased the service is up to your needs.
Since Swiftvox / VoIP.ms is a Canadian company, we do not collect taxes from USA customers. We only collect the appropriate taxes from Canadian accounts.
Thank you
--
Peter Sahui - VoIP.ms |
|
Reviews:
·RoadRunner Cable
 ·AT&T Midwest
 ·voip.ms
| said by suppafly:Since Swiftvox / VoIP.ms is a Canadian company, we do not collect taxes from USA customers.
Which doesn't help the OP much.
He will most likely best be served by consulting an experienced tax accountant or attorney.
As with sales taxes, just because a merchant does not collect taxes does not mean the customer is absolved from paying those taxes.
--
USNG:
16TDN2870
Find your USNG coordinates:
USNGWeb |
|
Reviews:
·Cablemas
| I think it is reasonable to assume that any local business must be aware of laws to be compliant of the local taxes they must pay.
I think your suggestion to visit a experienced tax accountant or attorney is a very wise one.
We answered the question in the sense of whether or not us (VoIP.ms) collected those taxes directly from them at the time of payment.
Thank you
--
Peter Sahui - VoIP.ms |
|
|
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| reply to Sirch
said by Sirch:I understand the e911 fees, but the majority was for "regulatory recovery fee" and "Universal Service Surcharge" which accounted for about 60% of the taxes & fees section.
"Regulatory Recovery Fee" is a crap term probably first originated by Don Draper of Mad Men.
It's like the last state college I attended. If you lived in the dorms, but did not take the meal plan, you had to pay a "Cooking Fee". They said that would compensate the state for the added electricity that you were using by doing your own cooking, and they said they'd save the money to buy stoves for future students. (This is pre-microwave, folks).
There is a Federal Universal Service Fund (USF) but that is the worry of the VoIP provider and/or the CLEC, not you. Some companies (such as FlowRoute) add this to your bill. Others (such as CallCentric) absorb the cost. The smallest providers are exempt. Some states have their own USF programs (Oregon does) but presumably that falls on the CLEC and/or termination carriers that the VoIP provider is using, certainly not you.
Some providers do charge sales taxes in various jurisdictions, as I believe that VoIP.MS does in parts of Canada. VoicePulse charges NJ sales tax to NJ residents only. CallCentric charges NY sales tax to NY residents only.
In other states, it is possible that a customer would owe "Use Tax". For example, if you are in New York, and ordered a book online but did not pay NYS sales tax on it, you are subject to an equivalent NYS "use tax".
But "use tax" won't apply in a state such as Oregon if there is no sales tax. So you should be OK.
Some states or counties/cities are imposing 911 taxes on VoIP providers. Again, that is the provider's worry, not yours.
But as was said, surely you have an accountant. So check with him/her, and if need be they will suggest a tax advisor.
cf:
»technews.tmcnet.com/voip-phone-s···axes.htm |
|
mikefxu
join:2004-10-05
Titusville, FL | reply to Sirch
The company I work for pays sales tax to the state even if the vendor does not charge it. |
|
| reply to PX Eliezer
said by PX Eliezer:Some providers do charge sales taxes in various jurisdictions,
PX, This is not nitpicking, I hope, but it is my understanding that Merchants/Vendors do NOT charge Tax. They only collect it for the States/Municipalities/Province, at their expense. Am I wrong? |
|
 jjoshuaPremium
join:2001-06-01
Scotch Plains, NJ
kudos:3 | reply to Sirch
You pay taxes on your internet connection. You're not obligated to pay taxes that aren't being collected by a voip provider.
If you want to consult with a tax advisor, then take their advice - not ours. |
|
Reviews:
·RoadRunner Cable
·AT&T Midwest
·voip.ms
| reply to dJON
said by dJON:said by PX Eliezer:Some providers do charge sales taxes in various jurisdictions,
PX, This is not nitpicking, I hope, but it is my understanding that Merchants/Vendors do NOT charge Tax. They only collect it for the States/Municipalities/Province, at their expense. Am I wrong? We start getting into semantics, but the reason words are important is that they determine our understanding of the underlying actions.
I would say you are correct. The average joe will assume that if the merchant is not collecting the tax, they're done. But as we all would like to forget, and as PX pointed out using the proper term, there's a line on many state income tax forms for Use Tax, which in Wisconsin is (not coincidentally) assessed at the same rate as Sales Tax.
There is a huge jurisdictional issue in interstate and international commerce in that the merchant is beyond the reach of local tax authorities, whereas the customer is bound by the laws of whatever jurisdiction they live in. The average joe does not think too much about this, but even if he does, he will feign ignorance and if caught, beg forgiveness.
Any company subject to audit (i.e. any company!) would be wise to assume online purchases are going to be reviewed by auditors to see if the appropriate use tax was paid.
As has been pointed out many times, we can't expect the average online merchant to know the tax liability in each of the thousands of taxing jurisdictions where they might deliver their products.
--
USNG:
16TDN2870
Find your USNG coordinates:
USNGWeb |
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| reply to dJON
said by dJON:said by PX Eliezer:Some providers do charge sales taxes in various jurisdictions,
PX, This is not nitpicking, I hope, but it is my understanding that Merchants/Vendors do NOT charge Tax. They only collect it for the States/Municipalities/Province, at their expense. Am I wrong? You are somewhat right, although it is a common expression.
An IDIOM in other words. 
One one hand, it technically is more correct to say "collect sales tax" rather than "charge sales tax".
OTOH:
Amazon:
The amount of tax charged depends upon many factors....
TigerDirect.com or one of its affiliates has locations in Florida, Idaho, Texas, North Carolina, South Dakota,Georgia and Illinois the appropriate tax rate is charged for any order shipping to these four states.
Although no actual nits are involved.
You have handed me a real hot potato.
But I hope that we can see eye to eye on this.
You are really on the ball.
Perhaps I was cutting corners in my post.
Well, even with taxes, VoIP is a good value. It does not cost an arm and a leg.
Of course, you should always take what I say with a grain of salt.
A penny for your thoughts. |
|
| Ok, Got it.
Amazon & TigerDirect says it wrong, now that makes it right.
»www.northjersey.com/news/opinion···412.html
THE AGREEMENT brokered last week between Governor Christie and Amazon -- one that will require the online retailer to begin to collect sales tax on purchases made in New Jersey starting in July 2013 could not have come at a better time.
Politicians surely love this. They impose the tax. We say and believe the Merchants charge it.  |
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| said by dJON:Ok, Got it.
Amazon & TigerDirect says it wrong, now that makes it right....
I'm sorry that you think that Amazon doesn't cut the Mustard, dJON. |
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| reply to dJON
"If you have a question about when to charge sales tax, contact us."
----Minnesota Department of Revenue.
"Suppliers that sell to building contractors must charge sales tax on the purchase price of the items."
----Iowa Department of Revenue.
The use of the term "charge" is just common usage....
Everyone understands that the tax is going to a state/province or to a local government.... |
|
Sirch
join:2012-06-14
Portland, OR | reply to Sirch
I've been doing a lot of research with the different government offices in my state and city.
We don't have a sales tax so we don't have a Use tax.
Above posters are correct, if we had a sales, we would be obligated to pay it even if the merchant / vendor did not collect it. It's the constant issue most states are facing, the end user pays the difference in tax if the merchant doesn't collect it or enough.
IE, if I lived in Washington with an 8% sales tax and purchased an item in Oregon, I should still pay the 8% WA sales tax on the item when I file my taxes (most people don't). Further, if I lived in Washington and purchased an item in another state that had 6% sales tax, I would be obligated to pay the 2% difference.
Throw in the fact that sales / use tax varies by county / zip code, and it's really almost impossible for the average Joe to really know what he should be paying in sales tax.
Regardless, my main concern is / was the taxes on telecommunications companies, as they are supposed to charge 5% in my city. Since we are not a telecommunications company, and I could not find a clear definition of what a telecommunications company was according to the state, I don't think we fall under any tax requirements for a telecommunications company.
To top it off, since we are using SIP, and SIP itself isn't taxed in any way that I can find, I don't believe we are obligated to pay any tax on the service.
I've raised it up with the 'higher ups' in the company and they said to drop the issue and would decide what to do (likely nothing).
Thanks for all the input, it's been a big help! |
|
| reply to suppafly
said by suppafly:Hello Sirch
We are pleased the service is up to your needs.
Since Swiftvox / VoIP.ms is a Canadian company, we do not collect taxes from USA customers. We only collect the appropriate taxes from Canadian accounts.
Thank you
Bullshit. voip.ms is operating in the United States, has facilities in the United States and needs to comply with United States law. The fact that a voip.ms representative says that voip.ms will not comply with local laws makes voip.ms look very bad. |
|
 Arne BolenHappy Anveo customerPremium
join:2009-06-21
Planet Earth
kudos:4
·Anveo
·callwithus
·Callcentric
·voip.ms
| said by drivel :Bullshit. voip.ms is operating in the United States, has facilities in the United States and needs to comply with United States law. The fact that a voip.ms representative says that voip.ms will not comply with local laws makes voip.ms look very bad. VoIP.ms has a server in the UK. Does that mean VoIP.ms is a UK company?
--
Voip News and Tech Forum |
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| Many years ago, in an Abbott and Costello routine, Bud Abbott wondered:
When a fat man leans over the bar, does his belly now belong to the bartender?
The CRTC did not accept Link2Voip's reasoning that because they were incorporated in Panama, they were not bound by Canadian law.
Now, Voip.MS does not own its far-flung servers (AFAIK) but rather contracts with 3rd parties.
So does operating a server in London subject them to UK law? Does operating a server in Tampa make them subject to Florida law?
Perhaps....
In any event, a retail provider like Voip.MS must operate through CLEC's for inbound origination, and through termination providers for outbound calls, and those companies (especially CLEC's) are certainly licensed and regulated.... |
|
Arne BolenHappy Anveo customerPremium
join:2009-06-21
Planet Earth
kudos:4 Reviews:
·Anveo
·callwithus
·Callcentric
·voip.ms
| said by PX Eliezer:The CRTC did not accept Link2Voip's reasoning that because they were incorporated in Panama, they were not bound by Canadian law. Link2Voip's office and staff were in Canada. That could be the reason why CRTC meant they were bound by Canadian law.
AFAIK Voip.ms don't have offices or staff in the USA or the UK.
--
Voip News and Tech Forum |
|
PX EliezerPremium
join:2008-08-09
Hutt River
kudos:13 Reviews:
·callwithus
·voip.ms
·Optimum Voice
·Vitelity VOIP
·Gizmo5
| True.
It's an emerging area: The regulatory and tax obligations of companies that have an electronic presence only.
This is why I say that while everyone says what a smart judge King Solomon was, he'd not find it so easy today!
|
|
 crazyk4952Premium
join:2002-02-04
united state
kudos:1
·Charter
·Callcentric
·Vitelity VOIP
·voip.ms
| reply to jjoshua
said by jjoshua:You pay taxes on your internet connection.
Actually, if you live in the U.S., there are no taxes assessed on internet connections (at least until 2014).
»arstechnica.com/tech-policy/2007···tension/ |
|
