Merry Christmas! The FCC Just dropped a massive tax bill on your lap and your phone and Internet bill is about to go through the roof…
I’m Max Clark, CEO of ITBroker.com, and in the United States we pay a ton of taxes on our communication services: this encompasses phone, cell phones, Internet, network services, etc. and these taxes break down in the form of municipality, county, state and federal taxes. Historically the Federal Universal Service Fund has been the highest percentage of taxes been assigned or attached to our bills. And this usually floats, changes, quarterly. This tax has floated usually between 16 and 19% as a contribution factor. For instance, in the high tax areas, like Los Angeles or New York, you could expect to see somewhere between 25 and 27% of taxes on your phone bill or your Internet bill or your network circuit bills.
Well, the FCC just announced they are raising the contribution rate for the Federal Universal Service Fund to almost 32%.
This means if you’re a Los Angeles based business, or a Los Angeles based consumer, this affects you! Your cell phone bill, or your Internet and your cable service at your house! So in Los Angeles city now you’re going to pay the city 4.5% in utility users taxes, you’re going to pay the state another almost 6% in various state taxes, and you’re going to pay 31.8% to the federal governments FCC federal universal service fund in taxes! That’s a tax load of 44% on your bill! And by the way we haven’t even talked about other surcharges that are normal here which are E911 service fees, PUC administration fees, property tax capture fees, so it’s realistic that in some parts of the United States you’re going to see tax bills that almost 50% of your service!
So if you’ve got if you got $100 phone bill, well that phone bill is now almost $150. Or if you’ve got a $70,000 –we’ll make it easier- if you’ve got a $100,000 network bill, you’re now going to have a $150,000 network bill.
The FCC has absolutely just dropped a bomb on all of us. This kicks in next quarter, you’re going to see it on your bills. Alert your finance departments now! It is going to be a shocker, update your budget information, your cash flow just took a huge hit going into next year on how your network is going to be charged and what you’re going to have to pay out.
If you’re evaluating whether or not your network and your communications infrastructure makes sense or if there is a better way for you to approach these things, give us a call at ITBroker.com. We’re going to run a personal evaluation of your business, of your spend, and tell you ways that you can optimize your cash flow and how you can mitigate this as much as possible now before it hits.