Frequently asked questions about taxes
This article provides answers to commonly asked, general tax questions. If you are looking for more information related to your country and its taxes, we have other FAQs available for specific countries.
If you are in a foreign country where EU VAT is assessed and you have not provided Zoom with your VAT ID number, you will see the VAT charge directly associated with each service on your invoice, and further summarized at the end of your invoice.
If you live in the United States where Zoom services are subject to taxation, you will see the taxes directly associated with each service on your invoice and a summary of all tax types at the end of your invoice. This may include local taxes that were not previously charged. U.S. Zoom Phone customers will see that federal and state telecommunications taxes and fees are now applied to the sale of the product. This includes the Federal Universal Service Fund (USF), and possibly, state level USF and/or other local telecommunications taxes. The details of all Zoom Phone telecommunications related taxes and fees are summarized at the end of the invoice.
Note: Please contact our Sales team or your account's specific Account Executive regarding Tax Residency Certificates.
Why am I being charged state taxes at all?
Zoom is required to charge and collect state taxes (e.g., sales taxes, gross receipts taxes, and certain telecommunications taxes) from customers in certain states where Zoom either has a physical presence (i.e., employees or office locations) or where Zoom maintains a significant market based on the amount of its sales and/or transactions with customers (subject to state specific rules).
Zoom is not required to collect these state taxes from customers residing in states where Zoom’s services are not subject to state or local taxes, regardless of Zoom’s physical presence or its sales/transaction volume in that particular state. However, it is important to note that customers may still be required to self-report and remit use tax (on purchases) in certain state and local jurisdictions that would subject Zoom’s services to tax, even if Zoom is not required to charge and collect sales tax on the transaction.
When Zoom collects these state taxes, we remit the entire amount to the relevant state taxing authorities on behalf of our customers. The amount and type of tax collected depends on your location, the type of products/services purchased and the particular rules of the state and local jurisdiction.
What are these new taxes on my invoice?
Zoom continues to review the products and services we sell, as well as the nature and extent of its activities in different jurisdictions. Based on such reviews, Zoom will implement tax changes from time to time to stay compliant with all government regulatory and tax requirements. As we determine the future obligations to charge and collect taxes or telecom based charges, we will make every effort to notify you promptly and in advance of any charges appearing on invoices.
What are telecom taxes and fees?
Taxes may be imposed by state, local, and municipal governments on goods and services, including phone services (i.e., telecom). In addition, federal, state, and local governments may impose regulatory charges on providers of certain communications or telecommunications services, including interconnected VoIP service like Zoom Phone. For additional information on state telecommunication taxes, please refer to the overview of state telecom taxes.
Why do certain taxes apply only to Zoom Phone?
Zoom Phone is taxed differently than other Zoom services because the voice services are generally treated differently by various state taxing authorities. Zoom Phone is also subject to certain regulatory fees and assessments that apply to an interconnected VoIP service, but do not apply to Zoom’s other services.
What fees should I be seeing?
All U.S. Zoom Phone customers will see a Federal USF charge. This is a charge that Zoom Phone uses to recover the cost of Federal USF contributions that Zoom (and other similarly situated providers) is required to make to support the provision of communications services in rural and high-cost areas, income-eligible consumers, and to support access to communications for schools, libraries, and rural health care providers. The Federal Communications Commission (FCC) sets the Federal USF percentage amount, and the FCC can change the percentage amount every quarter.
For more information on the Federal USF, refer to the FCC website.
Certain Zoom Phone services are subject to a federal excise tax and for those services Zoom Phone collects those taxes on behalf of the government using a “Federal Excise Tax” line item.
Zoom Phone also charges state and local telecommunications taxes as permitted or required by law.
My last carrier had a longer list of fees. Why are there fees missing?
Zoom Phone has chosen not to charge additional fees to recover certain costs associated with providing the service. Many other providers use additional fees to recover costs. These fees may be called “regulatory recovery fee” or “cost recovery fee” or “911 recovery fee.” While Zoom Phone is also permitted to make similar charges, we have decided to use more transparent pricing and not charge separately to recover these costs.
Who can I talk to if I have questions about these new taxes and fees?
If you have any additional questions, please chat with us mentioning “Tax”.
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