- Telecommunications service providers often want to expand their service offering and become “stickier” with their clients.
- Purchasing telecommunications services on an exempt basis for resale purposes can help service providers avoid taxes and fees.
- The standard sales tax resale exemption is not enough to achieve the exemption, as different taxes and fees need to be exempted.
- State and local taxes and fees can be exempted by providing a valid tax ID number.
- Exempting regulatory charges and the USF fee can be more challenging.
- Once a service provider’s USF contributions exceed $10,000 in a 12-month period, they must contribute directly to the fund and can apply for a USF exemption with the carrier.
- Large carriers often issue an exemption package to their resellers, which can be a lengthy document requiring completion of different forms.
- Despite the paperwork and potential cost, there is a significant savings opportunity due to high tax rates on telecommunications services.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.