Telecommunications taxes are very challenging and perplexing and you need someone with vast experience in the area to make sense of it all. We are extremely knowledgeable with all areas of federal, state, and local taxation along with the numerous fees assessed at every jurisdictional level. Whether you are traditional or plain old telephone service (POTS) provider, a Voice Over Internet Protocol (VoIP) company, reseller, CLEC or provide cellular services, we can help you navigate all aspects of the labrynthical federal, state and local tax laws and help you understand whether you have any tax filing responsibilities in a jurisdiction and how to plan for your compliance burden as your company expands and grows.
Further, even if you have to file an income tax return in a jurisdiction, you may not have to source your revenues where your customers are located. Service provider sourcing rules are complex, and we help you navigate this intricate area, and get your tax filings in order.
We can also review your current billing and taxing system to ensure that your properly assessing tax, and if you are a reseller, or utilizing someone else’s network, we can examine your provider’s bills to ensure that you are maximizing your exemptions, and that you are not overpaying taxes yourself.
Where do I have to file tax returns? As a telecommunications provider this is quite a vexing question. The Telco industry is mired in over-taxation and regulation and as a result, you have numerous levels of federal, state, and local taxation. Telecoms often file income, sales, and gross receipts (telecommunication) returns everywhere they have customers, or they will just file only these returns in their home state, and unfortunately usually neither treatment is proper.
The nexus rules are different for sales tax, gross receipts tax, and income tax. We can assist you with a nexus review to make sure you are filing in the proper jurisdiction for sales and gross receipts tax purposes, as well as entity income tax purposes. If you have filed in too many jurisdictions we can assist you with seeking refunds, and if you have any unmet tax filing obligations we can help you mitigate the back year exposures, and cure these issues on a go forward basis.
The sourcing of your receipts for income tax purposes is not always as simple as just sourcing to customer location. States have different sourcing rules and we can help you navigate this complicated landscape and see if we can find any tax overpayments, and seek refunds on your behalf. Further, if there any exposures, we can help assist you with handling the matter and minimize any future exposures.
Income tax compliance is an unfortunate necessary evil, and we can take this burden off your hands, at minimal cost. Our decades of tax preparation experience coupled with our telecommunications expertise can help make this process less costly and relatively painless.
Tax Calculation and Compliance Reviews
Properly taxing your customers is truly easier said than done. The taxation function is often outsourced, and with the layering of sales tax with gross receipts taxes and regulatory fees, and the often misunderstood “tax on tax” this function is often times rife with problems. Unfortunately many times your tax calculation company has telecommunications expertise and not tax expertise, which results in improper taxation. We review the tax calculation and make sure it’s being done properly and applied against the proper accounts on your general ledger.
In addition, many telecommunication providers outsource the sales and gross receipts tax compliance function as well, and since this compliance function is so significant and nuanced, things are often missed or just plain overlooked. We review the entire process with a jaundiced eye to ensure that your company is in full compliance and that nothing is being overlooked.
Bad Debt Refunds
If you have churn at any material level, you can generally get a deduction or refund for taxes remitted but never collected. However, many telecommunications providers don’t take advantage of these deductions or refunds. With razor thin margins, any monies recovered money is always welcome. We help you manage your bad debt and turn it into found money, and come up with a strategy to recover these taxes/fees, with minimal cost.