Answers to common tax questions are provided in this article. Other FAQs are available for specific countries if you’re interested in more information about your country’s taxes.
The VAT charge for each service you purchase on Zoom will appear directly on your invoice if you are in a foreign country where EU VAT is charged, and further summarized at the end of your invoice if you have not provided Zoom with your VAT ID number.
Zoom services are subject to taxation in the United States. If you live in the United States and Zoom services are taxed, you can identify the tax directly associated with each service on your invoice, and you can also see a summary of all tax types at the bottom of the invoice. Taxes that have not been previously charged may be included in this figure. U.S. Customers of Zoom Phone will now be able to see that federal and state telecommunications taxes and fees are being added to the purchase price. In this context, Universal Service Funds (USFs) at the Federal level are included, and possibly, USFs at the state level and/or other telecommunications taxes at the local level. At the end of the invoice, you will find a summary of the details about all Zoom Phone taxes and fees relating to telecommunications.
Note: If you are interested in obtaining Tax Residency Certificates, please contact our Sales team or your Account Executive for more information.
Why am I being charged state taxes at all?
As part of our service agreements, Zoom must charge and collect state taxes (e.g., sales taxes, gross receipts taxes, and certain telecommunications taxes) based on the amount of revenue collected from clients in certain states where Zoom maintains a presence (e.g., employees, offices, etc.) or where Zoom a significant market based on the value of the customer services that it provides (subject to state regulations).
If Zoom’s services are not subject to state or local taxes where its customers reside and the customer resides in a state where Zoom’s services operate, Zoom is not required to collect the tax, regardless of Zoom’s physical presence or its sales and transaction volume in that state. It is important to keep in mind, however, that Zoom customers may still be required to self-report and remit use tax (on purchases) in certain state and local jurisdictions that require Zoom to collect and remit sales tax on certain transactions regardless of whether Zoom is obliged to charge and collect it.
We remit the entire amount that Zoom collects from our customers on behalf of the state taxing authorities, when Zoom collects these state taxes from our customers. In addition to the amount of and type of tax collected, the specific rules of each state and local jurisdiction will also have an effect on the amount and type of tax collected.
What are these new taxes on my invoice?
Zoom constantly evaluates the products and services it sells, as well as the scope and nature of its activities worldwide. Zoom will implement tax changes as needed to stay in compliance with all government regulations and tax requirements based on such reviews. In the event that we are required to collect taxes or telecom charges in the future, we will do our utmost to notify you promptly and in advance of any charges appearing on your invoice.
What are telecom taxes and fees?
A state, local, or municipal government may impose taxes on goods and services, including phone services (i.e., telecommunications). Regulatory charges may also be imposed by state, local, and even federal governments on providers of certain communications and telecommunications services, including VoIP services like Zoom Phone. The overview of state telecommunication taxes contains additional information on state telecommunication taxes.
Why do certain taxes apply only to Zoom Phone?
Due to the fact that various taxing authorities in several states treat voice services differently, Zoom Phone is generally taxed differently than other Zoom services. The Zoom Phone service is also subject to certain regulatory fees and assessments applicable to VoIP interconnections; however, those fees and assessments do not apply to the other Zoom services.
What fees should I be seeing?
There will be a Federal USF charge for all Zoom Phone customers who are located in the United States. Using this charge Zoom Phone can recoupe the amount it has been paid by the Federal United States Funds that Zoom (and other providers in a similar position) are required to pay to support the provision of communications services in rural and high-cost areas, to support the provision of communications services to income-eligible consumers, and to support the provision of communications services to schools, libraries, and rural healthcare providers. A Federal USF percentage amount is set by the Federal Communications Commission (FCC). This percentage amount can be changed by the FCC on a quarterly basis.
The Federal USF can be found on the FCC website, where you can find additional information.
There are certain Zoom Phone services that are subject to a Federal Excise Tax, and those taxes are collected on behalf of the government by Zoom Phone through a line item called “Federal Excise Tax”.
There are also charges imposed by Zoom Phone based on state and local telecommunications taxes as allowed or required by law.
My last carrier had a longer list of fees. Why are there fees missing?
Zoom Phone has decided that certain costs that are associated with providing the service are not recovered by charging additional fees. Other providers tend to recover costs by charging additional fees. Depending on the name of the fees, they may be called “regulatory recovery fees” or “cost recovery fees” or “911 recovery fees.” While Zoom Phone is also allowed to charge similar fees, we have decided to use more transparent pricing to recover these costs rather than charging separately.
Who can I talk to if I have questions about these new taxes and fees?
We will be happy to answer any additional questions you might have, as long as you mention the word “Tax”.