Depending on your billing address, your invoice can show taxes, which the law sets, and two CloudTalk fees: the Universal Service Fund (USF) fee, which recovers what CloudTalk must pay into the federal fund, and the Compliance and Administrative Cost Recovery Fee. In this guide, you’ll learn what these fees mean and how they are calculated.
Compliance Fees and Taxes FAQ
What is the Universal Service Fund (USF) fee?
The Federal Communications Commission (FCC) established the Universal Service Fund (USF) to ensure that all Americans have access to essential telecommunications services. By supporting these critical programs, the fees help bridge the digital divide, ensuring that all Americans, regardless of their geographic location or economic status, have access to vital telecommunications services. You can find more information about the Universal Service Fund at: www.fcc.gov/general/universal-service.What is the Compliance and Administrative Cost Recovery Fee?
CloudTalk’s list prices are the same for customers worldwide. Serving customers in the United States brings costs that apply only there, and like many cloud phone providers in the United States, CloudTalk recovers part of them with a separate fee instead of raising prices for every customer. The fee is 11% of the software part of your subscription and shows as its own line on your invoice. It is a CloudTalk fee: it is not a tax, and no government requires it. It helps CloudTalk recover the costs of complying with federal, state, local and other regulations, as well as intellectual property and administrative expenses. Specifically, it includes:- Fees assigned by the Federal Communications Commission and other regulatory bodies.
- Costs of meeting regulatory requirements (e.g., accessibility, numbering, privacy, anti-fraud).
- Expenses for tax filings and compliance with jurisdictional regulations.
- Surcharges paid to third-party telecommunications providers.
- Costs for managing intellectual property, including patents and trademarks.
How does USF affect my CloudTalk invoice?
All customers operating in the United States based on their billing address will be subject to a USF fee and a Compliance and Administrative Cost Recovery Fee. Both fees will be separately displayed at the ending part of an invoice.Why are you passing USF fees through to me?
Telecommunications providers are legally required to contribute to the Federal Universal Service Fund (FUSF). Each provider decides whether and how to recover these costs from customers. At CloudTalk, USF fees are calculated as a percentage of your telecommunications services and displayed on your invoice. CloudTalk adheres strictly to compliance regulations and does not collect more than what it contributes to the USF. The Federal Communications Commission (FCC) determines the applicable USF rate quarterly, and it may change over time.Will I also be charged for state and local taxes and fees?
Depending on your billing address, your invoice may include state, county and local taxes and fees, such as sales, communications, gross receipts and E-911 taxes. They depend on local law and the services you use, and show as separate lines on your invoice. We email you before they first apply.Is my organization tax exempt?
Not automatically. Send a valid exemption certificate for your billing state to [email protected] and we apply it.Is CloudTalk pricing tax inclusive?
No. CloudTalk’s prices are the same for customers worldwide and exclude taxes and fees. Taxes follow the law where you are billed; the USF fee and the Compliance and Administrative Cost Recovery Fee are added as described above.How will my taxes and fees be calculated?
We use a combination of:- Your billing address
- State, county, and local tax regulations.
- The types of products and services you use.
- Your tax status in a given jurisdiction.
How does CloudTalk know how much to charge for taxes?
CloudTalk is committed to ensuring full compliance with all tax regulations. We continuously monitor changes in federal, state, county, and local tax laws to stay up to date with the latest requirements. To ensure accuracy and compliance with these regulations, we consult external tax experts and use a specialized tax engine for precise calculations. This comprehensive approach helps us maintain compliance and apply the appropriate taxes as required by law. Customers billed in Canada: see Canadian taxes, charges and fees.Need help or have a question? Just reach out through our Support portal — we’re here for you.