| reply to vonsen
Re: [Lingo] Complain here about 18% in new fees/tax!! The FET does not need to be charged currently. Or wait maybe it does. It hasn't yet been tried so nobody really knows if it needs to be charged or not. The issue at hand is that currenlty a VOIP provider can "voluntarily" charge and submit to the government the FET taxes. If they do this they are "safe" (FET wise) "no matter what". If a VOIP provider chooses not to charge this fee (or submit it to the government), and the courts say that VOIP is required to pay the FET then it may well be retro-active.
That means that if today Lingo doesn't charge this fee and the courts decide they must it will likely be they will have to back pay it! If they don't start chargning now and the courts rule that way they will be out of the FET tax they have to submit to the government.
So no, they can't claim it is reguired. On the other hand you can't claim it isn't required. The FET you can be sure their attorney's have advised them to collect and that is what they are doing. The RRF is a B.S. fee, I say this because they aren't submiting it to anyone currently. It is currenlty padding their wallets. It is true later taxes could be imposed even potentially retroactively, but for the time being that fee is not a tax. If they simply came out and said (and Vonage, and BV should do this as well), this currently is a "extra" fee for our service that is not government related, but we are collecting it to ensure that we are covered should we be required to retroactively pay taxes in the future. I wouldn't object so much (I would simply add it to the cost of the service). It might be reasonable to collect it, and state if it turns out it isn't needed in some reasonable period of time all that money will be donated to a charity. My objection to the RRF is it sound like a tax but it isn't. |
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| Re: [Lingo] Complain here about 18% in new fees/ta nsumner,
Thank you for the thorough reply! |
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1 edit | reply to nsumner
Re: [Lingo] Complain here about 18% in new fees/tax!! This is essentially correct, nsumner. The tax depends on statutory definitions of "local telephone service" and "toll telephone service" that were enacted in 1965. The IRS regulations relating to this tax pre-date these definitions, so there is a real lack of clarity about whether and how the tax should be imposed on VoIP providers (a pretty good analysis can be found at »www.techlawjournal.com/topstorie···0702.asp ). It is not necessarily retroactive to apply this tax to VoIP providers, because the IRS could claim that they have always met the statutory definitions.
What I'd like to know is whether Lingo intends to pay these funds over to the federal government. If they do, then I have less objection to their collecting them. But somehow I doubt it.
The regulatory recovery fee is another story. That is a concept borrowed from the world of regulated utilities, which often seek and obtain approval to pass on added costs to ratepayers (e.g., a fuel cost adjustment) in between general rate cases. But those utilities at least have to justify the increase to a regulatory commission that has staff to investigate and challenge it. We have no such protection here, but we do have the ability to vote with our feet. |
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| Re: [Lingo] Complain here about 18% in new fees/ta My key objection is to the regulatory recovery fee on virtual (aka secondary) numbers. Those numbers aren't lines but just place holders for incoming calls. To tax them at 33% of what one pays for a domestic one is outrageous. And, the international ones don't fall under the purview of any american taxation.
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| reply to nsumner
Re: [Lingo] Complain here about 18% in new fees/tax!! said by nsumner:If a VOIP provider chooses not to charge this fee (or submit it to the government), and the courts say that VOIP is required to pay the FET then it may well be retro-active. I'm not an expert, but I do know a few things about taxes. First, courts are not the ones to decide if it is retroactive. *When* the law is written to include VoIP service (there is no such law at this time!) that is when it will be decided if it is retroactive or not.
HOWEVER...I cannot recal, ever, ANY tax law being established, and it being made retroactive. This notion is ridiculous. It is like saying "OK, we made a law today requiring you to collect these taxes, but we really meant to apply it to you 4 months ago, so why don't you go ahead and pay us what you owe."
If anyone can find a tax law that was made retroactive, it could change everything. Otherwise, I'm highly suspicious of what Lingo will be doing with these additional funds they will be collecting. |
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| said by Gericurlswrl: *When* the law is written to include VoIP service (there is no such law at this time!) that is when it will be decided if it is retroactive or not. HOWEVER...I cannot recal, ever, ANY tax law being established, and it being made retroactive. It's not that simple. Section 4251 of the Internal Revenue Code imposes a 3% tax on "communications services." This provision has been in place in one form or another for over 100 years -- since the Spanish American War. "Communications services" includes "local telephone service" and "toll telephone service." "Local telephone service" is defined in section 4252 as:
"(1) the access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radio telephone stations constituting a part of such local telephone system, and
(2) any facility or service provided in connection with a service described in paragraph (1). "
A reasonable argument could certainly be made that, by connecting its customers to the local telephone system, Lingo is providing communications services within the meaning of section 4252. Section 4252 was enacted in 1965, and therefore the IRS could claim Lingo should have been collecting this tax from the time it first sold VoIP service.
There are, of course, lots of arguments against the applicability of this tax to VoIP service, and against any obligation of Lingo to collect it. But it would not necessarily be retroactive to charge Lingo with this responsibility now.
Finally, I should add that there are many instances in which tax laws have in fact been adopted which apply retroactively. Usually these are given wide publicity before their final passage (to give people a chance to adjust their affairs accordingly), but unlike criminal statutes, there is no constitutional bar to retroactive taxation. |
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| (in response that; you have to pay tax for communication that connects to a pots network)
who has to pay the taxes the subscriber or the VoIP provider?
pots you have phone service from your bell. (a bell you have a wire that is connected from your home to then bells phone switch) wear as is a communication service like email. VoIP you pay communication tax to your isp after that every communication service is like email or IM that is tax free.
in short i pay a VoIP provider for service like you can pay for AOL fore there LAN connection service then the VoIP like Vonage should pays level3 to connect to the post network so level3 should pay the tax. |
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| said by Enonymous:
(in response that; you have to pay tax for communication that connects to a pots network)
who has to pay the taxes the subscriber or the VoIP provider?
pots you have phone service from your bell. (a bell you have a wire that is connected from your home to then bells phone switch) wear as is a communication service like email. VoIP you pay communication tax to your isp after that every communication service is like email or IM that is tax free.
in short i pay a VoIP provider for service like you can pay for AOL fore there LAN connection service then the VoIP like Vonage should pays level3 to connect to the post network so level3 should pay the tax.
Enonymous, I don't quite understand what you are saying. If the federal communications excise tax applies to VoIP, then the subscriber has the responsibility to pay it and the VoIP provider has the responsibility to collect it. I don't happen to pay any taxes in connection with my internet service, but it wouldn't matter even if I did. Nor would it matter what taxes are paid by Lingo or Level3. The IRS could claim the tax applies to the service I purchase from Lingo because Lingo provides me with "access to a local telephone system, and the privilege of telephonic quality communication with substantially all persons having telephone or radio telephone stations constitution a part of such local telephone system." |
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