Practice Areas

COMMUNICATIONS TAXES AND FEES

Our Communications Taxes & Fees practice group provides clients with experienced counsel on a wide-variety of federal, state and local taxes, including sales, use, excise and transaction taxes, 911/E911 fees, and other “tax-like” regulatory fees applicable to communications services and products. We represent communications service providers in the landline, wireless, long distance, VoIP, enhanced services, and conferencing and call bridging markets, as well as the suppliers and manufacturers serving these entities. Our experience covers assistance with tax planning, conducting compliance reviews, providing alerts of proposed and adopted changes in tax laws by the states and the Multistate Tax Commission, advocacy before taxing and regulatory bodies, interpretation of statutory provisions and administrative rulings, assisting clients with the different aspects of audits - ranging from developing audit avoidance strategies, conducting risk analysis and mitigation techniques, providing audit defense, and assisting with reverse audits and appeals, and litigation - both prosecution of claims and defense of assessments.

Our firm’s Communications Taxes & Fees practice group helps guide clients to reach optimal solutions and offers professional assistance with regard to a wide variety of complex tax and regulatory fee issues, including:

  • Sales, Use and Telecom transaction taxes; excise taxes – federal and state
  • 911/E-911 for VoIP, wireless and switched telecommunications
  • Universal Service Administrative Company (“USAC”) audits and FCC investigations
  • Universal Service Funds, telecom relay services funds, regulatory fees—federal and state
  • Supply chain enforcement and tax exemptions – strategies, planning, development and implementation of compliance programs
  • Strategic advice on apportionment methodologies
  • Dispute resolution – carrier-to-carrier and governmental
  • Billing audits to verify accuracy of pass-through taxes and fees, to establish eligibility for refunds and credits, and to reduce or avoid certain taxes and fees
  • Audit defense before state Departments of Revenue, State Utility Commissions, USAC, FCC and other federal and state tax or regulatory authorities
  • Guidance on initiatives by States and the Multistate Tax Commission to tax out-of-state retailers and proposed Streamlined Sales and Use Tax Agreement
  • Tax Amnesty programs
  • Taxation of software, Internet access, web-based and value-added services, sales and transactions

Resource Material

Analysis & Strategic Planning

As a result of deregulation, convergence and a variety of technological, regulatory and economic factors, federal, state and local taxes and other impositions are growing and often represent an unrecoverable burden on a company’s profitability. However, these taxes and impositions can be reduced or, in some instances, eliminated by adjusting the way in which business is conducted.

Our tax analysis and planning services can be used by clients to adjust existing business relationships and/or operations, marketing, sales, billing and accounting practices, and organizational structures in order to minimize or eliminate federal, state and local tax and regulatory impositions without adversely affecting the client’s core business goals and plans.


Audit Defense

We are able to comprehensively manage the audit process from beginning to end, or provide focused assistance with any aspect of an audit’s different phases, such as the process of producing records, identifying the information required to establish a best-case position, advocating and negotiating with authorities to accept that position and build a solid record should an appeal be warranted, and assisting with settlement and payment plan negotiations. We will control and manage the day-to-day information flow between our client and the taxing or regulatory authority ensuring timely, complete, and accurate responses. When possible, we will invoke accelerated dispute resolution processes that are available to reduce the costs and time burdens associated with resolving complicated tax and fee assessments, audits, or alleged deficiencies.

We represent our clients’ interests during audits to ensure they pay only their lawfully required share. Our audit representation provides a comprehensive range of services, including:

  • Audit coordination
  • Audit review and opportunity assessment
  • Controversies and appeals
  • Responses for information and document requests
  • Risk assessments
  • Tax, PUC or USAC audit representation
  • Compliance and reporting evaluation
  • Taxability determinations
  • Voluntary disclosure and registration (in association with our affiliates)
  • Negotiated settlements

TO FIND OUT WHY YOU MIGHT NEED A COMMUNICATIONS TAX ATTORNEY, CLICK HERE.

Throughout much of the 20th century, traditional switch-based "telecommunications services” proved to be a vital source of tax revenue for federal, state and local tax authorities. During this same period, communications through "enhanced" or "information" services (such as the Internet and other database-centric and IP offerings), on the other hand, largely developed in a relatively tax-free environment. As we progress into the new millennium, modern day communications services are increasingly becoming hybrid in nature, involving a mix of basic "telecommunications" components and "enhanced/information" services and products.

The convergence of these two worlds of taxable and tax-exempt services into unified products has caused a great deal of confusion and uncertainty for companies seeking to ensure compliance with applicable tax laws, regulations and rulings. For large consumers of communications services, the uncertainty results in unnecessary and avoidable expense.

Why might you need Communications Tax lawyers?
It is likely you’ve noticed an increase in federal, state and local regulatory fees, surcharges and taxes levied on your company recently. Either that or perhaps you’ve been contacted by a town, city, or state asking questions about the nature of your business in their jurisdiction, often the first step in establishing nexus before taxes are sought. It would be hard not to notice the uptick in activity pertaining to communications taxes in recent months.

The unfortunate trend has been for federal, state and local authorities to target the telecommunications, Voice over Internet Protocol (“VoIP”), and enhanced communications industry and subject providers to a host of complicated and burdensome fees and taxes. What makes these tax and fee assessments so frustrating is the ambiguity surrounding what providers are actually required to pay.

Non-compliance can be costly.
Despite the ambiguity surrounding many of the taxing statutes, regulators are quick to seek back taxes, impose interest, assess penalties and take other actions which sap resources, time and money. This makes knowing your tax responsibilities and options essential to your company’s long-term success. The CommLaw Group can help you plan ahead with tax planning and mitigation strategies, and if you’re already in the cross-hairs, our lawyers can help negotiate more favorable outcomes by raising arguments and identifying legal ambiguities caused by the convergence of switched and enhanced communications networks.

We can’t eliminate your tax liability, but we can make your life easier by advising you on solutions that best fit your company’s short and long-term objectives.
It is more important than ever for you to take steps to ensure you are complying with the applicable laws and tax regulations while at the same time minimizing your liability. Whether you are a traditional telecom or VoIP provider, broadband service provider, prepaid provider, wholesale service provider or reseller, we can advise you on your tax and regulatory fee obligations. Let The CommLaw Group evaluate your exposure and help you establish a short-term and long-term compliance strategy that identifies each fee, surcharge and tax applicable to the services and products you sell.

Success and Experience Count and You Can Count on The CommLaw Group.
Our lawyers have decades of experience and are familiar with the federal, state and local tax laws & regulations applicable to the communications industry. This allows us to offer targeted tax guidance tailored to each individual client -- a model that has proven quite successful over the years.

  • We have secured countless refunds for communications-related taxes, successfully defended against the assessment of penalties and fines, obtained abatements and dismissals of collection actions.
  • Our professionals have institutional knowledge of various tax authorities and understand their proclivities. Click here to view the firm’s white paper regarding the unique tax and regulatory fee issues facing providers of converged communications services today.

The CommLaw Group is a One-Stop-Shop Offering Efficient, Comprehensive Solutions for the Most Complex Tax Matters
As your regulatory counsel we already understand your business, the services you provide and the regulatory obstacles you face. Our established affiliation makes us well-equipped to provide you with the most efficient and tailored:

  • Guidance on federal, state and local communications, sales, use and gross receipt/excise taxes;
  • Assistance with tax-like regulatory fees, including federal and state Universal Service Fund assessments and 911/E911 fees;
  • Tax planning, including advice on document retention, reporting and defense strategies; and
  • Transactional tax guidance, inclusive of restructuring, mergers, acquisitions, and complex contractual relationships.

We also specialize in general tax consultative services, supplier invoice audits, carrier and customer bill audits and tax litigation support.