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FAQs on computation of Tax

  • Understanding Taxes, Surcharges, and Fees

    In addition to the monthly service charges billed for Plivo services, surcharges, taxes, fees, and other charges may be applied to your monthly invoice based on the type of service you have and your geographical location, among other factors.  Certain taxes, fees, or surcharges may show up as separate line items on your invoice.  Examples include, but are not limited to the following

    Federal Communications Program Fees

    Carrier Cost Recovery Fee (CCRF)

    A Carrier Cost Recovery Fee (“CCRF”) equal to a fixed % of invoiced charges for voice usage and direct inward dialing numbers (excluding taxes) will apply to all customer invoices.  This is neither government-mandated nor a tax, but is a permissible pass-through charge to recover our costs associated with certain federal regulatory requirements. It includes contributions Plivo is obligated to make to federal funds that support communications services for individuals in high-cost areas, individuals in low-income areas, and disabled individuals.  For more information on programs supported by the CCRF, please see below.

    Federal Telecommunications Relay Services (TRS) Fund. The TRS Fund was established by the FCC in 1993 to reimburse TRS providers for the cost of providing interstate TRS services.  TRS services are telephone transmission services that provide hearing or speech challenged individuals with the ability to use a traditional telephone.

    Under the FCC’s rules, Plivo must contribute a percentage of its interstate and international end-user communications revenues to the TRS Fund. The contribution percentage varies annually.  The FCC recently announced that TRS contribution obligations will be extended to intrastate revenue as well. As set forth above, Plivo recovers this cost through the CCRF. 

    State & Local Taxes and Surcharges

    State & Local Sales and Use Taxes

    All states, with limited exceptions, impose some form of state-level sales and use tax.  The sales and use tax is generally imposed on the sale or use of the tangible personal property and certain services.  These taxes are intended to be passed on to the end-user/consumer. 

    In many states, local jurisdictions also impose a sales or use tax.  In some instances, the local sales and use tax is administered by the local jurisdiction.  In other instances, the state administers the local sales and use tax.

    Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.). 

    Plivo collects applicable sales and/or use taxes as required by state and/or local law.

    Communications Services Tax

    Some state and local jurisdictions impose communications specific taxes on communications services in addition to or in lieu of sales or use tax.  The communications services tax is intended to be passed on to the end-user/consumer. The rates for communications services taxes are usually different from the sales and use tax rates and vary by jurisdiction.

    Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.). 

    Plivo collects applicable communications services taxes as required by applicable state and/or local law. 

    Gross Receipts Taxes

    A number of states impose a gross receipts tax on communications service providers.  In some states, gross receipts taxes are intended to be passed on to the end user/consumer.  In other states, the gross receipts tax is the responsibility of the seller, and there is no pass-through to the end user.

    Certain exemptions may exist for gross receipts taxes that are intended to be passed on to the customer, based on the type of entity making the purchase (e.g., the federal government, state and local governments, non-profit entities, etc.). 

    Plivo pays gross receipts taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

    Local Utility Taxes

    Local utility taxes are imposed by cities and counties in a select number of states.  Certain exemptions may apply for sales for resale and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.). 

    Plivo pays local utility taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

    Local License Taxes

    Local license taxes are imposed by cities and counties in a limited number of states.

    Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.). 

    Plivo pays local license taxes and collects them from customers when required (or permitted) by applicable state and/or local law.

     

  • Charging and collection of taxes for your account

    1. Why is Plivo including sales and telecommunication taxes on my invoice?

    Where Plivo is determined to have sufficient presence in a state, locality, or foreign jurisdiction, we are required to remit applicable state & local sales taxes, telecommunication taxes, and other taxes and fees on the sale of our services based on the service address of a customer.  Such taxes are imposed on a variety of communications services providers.

     Historically, these taxes were absorbed by Plivo, and not passed through to our customers. However, in order to align with industry standards, we will calculate and include these taxes on customer invoices starting September 1st, 2020.

    2. What are sales and transaction taxes and how are they calculated?

    Sales tax is an indirect tax that is levied at the time and at point of sale, payable by the seller, as assessed at various jurisdictional level(s) (state or local). This is an indirect form of taxation as the ultimate burden is passed on to the purchaser, although the tax is being paid by the seller.

    Plivo uses third-party tax calculation software to ensure that all taxes and fees listed on customer invoices are properly calculated.  Plivo relies on your billing address as your service address for tax calculation purposes. You can update your billing address on the Plivo Console.

    3. What is the Carrier Cost Recovery Fee and how is it calculated?

    A Carrier Cost Recovery Fee (“CCRF”) equal to a fixed % of invoiced charges for voice usage and direct inward dialing numbers (excluding taxes) will apply to all customer invoices.  This is neither government-mandated nor a tax but is a permissible pass-through charge to recover our costs associated with certain federal regulatory requirements. It includes contributions Plivo is obligated to make to federal funds that support communications services for individuals in high-cost areas, individuals in low-income areas, and disabled individuals. 

    4. How can I claim exemption from taxes and/or regulatory fees if I am a reseller or am otherwise exempt from these taxes and fees?

    If you believe you are exempt from specific taxes or regulatory fees, are a reseller, a 501(c)3 organization, or are  in possession of a state-specific tax exemption certificate(s), you can provide a copy of the applicable exemption certification via email to finance@plivo.com.  In your email, please identify the specific taxes from which you feel you are exempt and list the accounts number(s) for which you believe the exemption(s) should apply.  Once we are able to verify your exemption status, we will update our account records accordingly.  Otherwise, we will contact you with any questions we have. Please note that even if you have a reseller or exemption certificate, you may not be exempt from all taxes in every jurisdiction.

    5. In which US states does Plivo charge taxes?

    Plivo is obligated to collect and pay taxes in following US states:

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    6. Can you provide an estimation of applicable taxes and fees for my account in advance?

    Unfortunately, Plivo cannot provide an estimation of applicable taxes and fees in advance.  Specifically, the applicable taxes and fees are subject to change depending on the nature of the services you subscribe to and your place of the primary use of the services.  Further, the applicable tax rates and laws in various taxing jurisdictions are subject to change.  

    If you have questions regarding the incidence of a particular tax or fee listed on your invoice, you can contact us at finance@plivo.com to obtain additional information.  

    7. Can I update my address and ask for previous invoices with that address?

    Customers can update addresses using the Plivo console at any time. However, we do not support tax computation related requests corresponding to address changes for closed billing cycles..

    8. When is the tax amount charged?

    Taxes are calculated at the end of each month and are assessed on the first day of the following month.You will find two new line items on your invoice, for “State and Local Taxes” and “Carrier Cost Recovery Fee” which will reflect the appropriate charges.

    These additional charges may affect your balance. To avoid any service disruption, we recommend recharging the account in advance or setting up auto-recharge.

    9. How can I update my address?

    Customers can update their billing address using the billing section of Plivo console.

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