In an attempt to make sense out of those fees and taxes on your phone bill, we’ve started comparing bills from various companies. If you think you can help clear up any errors or holes in our explanation… let us know.
In addition to regular (plan) charges, each phone bill should have at least two more sections. One of these is for surcharges; the other for taxes and fees. The difference between a surcharge and a tax / fee is simple: your phone company is required to charge you taxes and fees, while surcharges are passed on to you at their discretion.
Universal Service Charges [Surcharge]: Telecommunications companies must pay a percentage of their interstate user revenues to the Universal Service Fund. This percentage is called the contribution factor, and changes quarterly depending on Universal Service needs.
The Q4 2012 USC rate for long distance calls was 17.4% [PDF]. These rates can be found via the Quarterly Filings page. According to Sprint customer service, the Q4 2012 USC rate for domestic calls was 4.3%. More information about these charges can be found on the FCC’s Universal Service Support Mechanisms page.
Universal Services Charges appear on your bill as follows (as of December 2012):
- AT&T: Federal Universal Service Charge
- Sprint: Federal-Univ Serv Assess LD or Federal-Univ Serv Assess Non-LD
- Verizon: Fed Universal Service Charge
According to a conversation with Sprint customer service, the USC fee does not apply to data usage and charges. Many monthly plan charges include a mix of both voice and data, so you will not be able to calculate your USC fee by multiplying your monthly charge by the current rate.
That said, the amount of your monthly charge that is subject to the USC is the same amount that is also subject to the Telephone Utility Tax, so you should be able to find comfort in the amounts you’re being billed by comparing those two rates. As of 18 December 2012, your USC fee should be roughly 70% of your Telephone Utility Tax.
Telephone Utility Tax [Surcharge]: See this document.
Administrative & Regulatory Charges [Surcharge]: Sprint and Verizon include Administrative Charges in their bills. AT&T, Sprint and Verizon all include Regulatory Charges. We are unsure, at this time, what these charges are for.
911 Taxes: See this document.
Sales Taxes: A portion of your phone bill is subject to sales tax by the State of Washington, Pierce County, and the City of DuPont. Unfortunately, there does not appear to be a direct correlation between the monthly service charges, as determined by the plan you choose, and the sales taxes as shown on your bill.
As of 18 December 2012, the sales tax rates for each were as follows:
- State of Washington: 6.5%
- Pierce County: 1.4%
- City of DuPont: 0.9%
Each phone company lists these sales taxes differently.
- State of Washington: WA State Sales Tax – Telecom
- Pierce County: City Sales Tax – Telecom
- City of DuPont: City District Sales Tax – Telecom
- State of Washington: Washington State-Sales Tax
- Pierce County & City of DuPont: Combined under DuPont City-Sales Tax. To get the Pierce County portion, multiple your stated tax by 61%; 39% for the portion collected by the City of DuPont.
- State of Washington: WA State Sales Tax
- Pierce County: Pierce Cnty Rta Tax
- City of DuPont: DuPont City Sales Tax